For a long time I have been a staunch supporter of immigration, not only for the freedom inherent in being able to live and work where you please, but for the benefits it provides to both your personal development and also to the innovative output of your host country.

The economic benefits of immigration were highlighted in a recent study that was published in the Review of Economic Studies.  It shows that counties in the United States that has historically had more immigration also had higher incomes, less poverty and lower unemployment today.

The study is important because it doesn’t look at immigration through a national lens, but rather a local one.  In both the United States and United Kingdom, politicians have fanned fears that immigration can have a negative effect on local communities.  As is the want of politicians, much of the attention has been on the short-term impact.  The study wanted to explore what happened in the long-term to those communities.

Long-term changes

The researchers analyzed the effects of immigration into the US over a 70 year period from 1850 to 1920.  This was a period of intense change, with high levels of immigration into the country.  It was also a period of significant change in terms of the source of those migrants.  At the start of the period, 90% of the migrants in the US were from Britain, Ireland or Germany, whereas by 1920 this figure had fallen to just 45%.

The analysis found that the immigrants provided a clear benefit to their communities in the immediate aftermath of their arrival, with manufacturing, agriculture and innovation all benefiting.  This is not only because they boost the supply of labor, but also they enhance the supply of knowledge and ideas that are so vital for the development of any community.

What is perhaps most interesting is that the effects are long lasting, with the analysis revealing that a 4.9% increase in migration contributes to a 13% increase in average per capita income today, and a whopping 152% increase in the number of patents per capita.  What’s more, they also found no evidence that immigration had any negative long-term social or economic costs to the host communities, with broadly identical levels of social capital, civic participation and crime rates as communities with lower immigration.

“What is fascinating is that despite the exceptionalism of this period in US history,” the authors say. “There are several important parallels that one could draw between then and now: the large influx of unskilled labor, the small but important inflow of highly skilled innovators, as well as the significant short-run social backlash against immigration. There is much to be learned from taking a longer perspective on the immigration debate.”