The more immigrants, the merrier—and the wealthier. That’s what an August paper published by the National Bureau of Economic Research concludes.
Economists Francesc Ortega of Queens College in New York and Giovanni Peri of the University of California at Davis analyzed immigration and income data from 188 countries and found a “robust, positive effect of openness to immigration on long-run income per capita.” Their research finds that immigrants raise average incomes in their host countries mainly by increasing overall economic productivity. “The main channel by which immigration affects productivity and income is by enlarging the set of skills available for production,” report the researchers. Newcomers bring with them varied talents and insights that enhance economic growth.
The authors found that diverse immigration—immigrants arriving from a wider array of countries—boosts host-country incomes even more. They also found that more openness to immigration has a positive effect on innovation, correlating with a higher annual rate of patenting. The researchers did not find any evidence that income inequality rises with increased openness to immigration.