Mass immigration is not the silver bullet economists think it is

Financial Times Europe11 Jul 2026The writer is an FT con trib ut ing editor and chief eco nom ist at Amer ican Com pass Oren Cass

When enter ing debates about immig ra tion, eco nom ists have often checked theircred ib il ity at the door. This hap pens espe cially when the ques tion is immig ra tion oflarge num bers of unskilled work ers (attract ing the globe’s top tal ent is a sep ar ateissue). Com mon sense and mar ket dynam ics sug gest that this causes job qual ity forexist ing work ers to decline and pub lic ser vices to suf fer. Yet argu ments to the con -trary have poured forth from eco nom ists, con veni ently coin cid ing with the self-interest of employ ers depend ent on large pools of cheap labour and pro gress iveseager to square their oppos i tion to restric tions on immig ra tion with their sup portfor worker power.

The cur rent is now revers ing. On both sides of the Atlantic, left-of-centre polit icalparties are dis cov er ing that unchecked immig ra tion poses an exist en tial threat totheir elect oral pro spects. Enfor cing the law and lim it ing the influx are sud denly onthe agenda. And lo and behold, the eco nomic argu ments are now trick ling in, con -firm ing that this may indeed be wise.

In March, eco nom ists at the Fed eral Reserve Banks in Dal las and San Fran ciscoattrib uted 30 per cent of the rapid increase in US hous ing prices from 2021 to 2024to the surge in illegal immig ra tion. When JD Vance made that point in the 2024 vice-pres id en tial debate, call ing illegal immig ra tion “one of the most sig ni fic ant driversof home prices”, eco nom ists fell over them selves to chas tise him for sup posed over -state ment. But he seems to have been right.

Switzer land’s June ref er en dum on a pop u la tion cap provided another occa sion forrethink ing. Immig ra tion is not a solu tion to an age ing pop u la tion, accord ing to eco -nom ics pro fessor Alan Man ning, and spend ing on it can reduce pro ductiv ity. OneSwiss busi ness leader called address ing labour short ages through immig ra tion the“lazy solu tion” while another lamen ted that “pres sure to improve pro ductiv ity inindus tries and the ser vice sec tors has dis ap peared”.

This last point is espe cially import ant. If employ ers believe they will always haveaccess to a large pool of read ily exploit able labour, why would they shift their busi -ness mod els and oper a tions towards bet ter jobs or invest in higher pro ductiv ity? A“job Amer ic ans won’t do” exists only if employ ers know they will be given someoneelse to do it.

A new paper by 2024 Nobel Prizewin ner Daron Acemo glu, fel low MIT eco nom istsDavid Autor and Keelan Beirne, and the Lon don Busi ness School’s Andrew Scottprovides another line of evid ence. While they stud ied birth rates, not immig ra tion,their find ings bear dir ectly on the lat ter.Eco nom ists gen er ally assume that a decline in avail able work ers will mean stag na -tion and con trac tion and make the case for high levels of immig ra tion on thosegrounds. Acemo glu and col leagues found the oppos ite: “In con trast to the pre vail ingwis dom, we find that lower birth rates so far have led to higher growth in GDP perworker across coun tries and higher wage growth across local labour mar kets in theUS.”

Their explan a tion? “The endo gen ous, labour-sav ing response of tech no logy to thescarcity of younger work ers.” Simply put, less avail able labour led to tech no lo gicalinnov a tion and invest ment, leav ing the eco nomy intact and, by boost ing pro ductiv -ity and wages, improv ing out comes for work ers.

These argu ments still war rant fur ther research. But they alter the default in thedebate. The idea that mass immig ra tion alle vi ates hous ing short ages by provid ingmore con struc tion work ers is now much harder to take ser i ously. The 1,470 eco -nom ists who signed a let ter in 2017 arguing that “immig ra tion brings young work -ers who help off set the large-scale retire ment of baby boomers” now need to prof -fer actual evid ence to sup port their case.

The most telling line in that let ter was the asser tion that “on some issues there isnear-uni ver sal agree ment. One such issue con cerns the broad eco nomic bene fitthat immig rants to this coun try bring.” This claim of unan im ity recalls the sim ilarshow of force on free trade dur ing the debate in 2000 over China’s entry to theWTO. Among eco nom ists, test i fied then Treas ury sec ret ary Lawrence Sum mers,“there has been only one answer. That wel com ing China into the global eco nomicsys tem is right for the Amer ican eco nomy.”

Hav ing to walk that judg ment back has been humi li at ing for the eco nom ics pro fes -sion. Just last month Nobel laur eate Paul Krug man admit ted that he had got itwrong. He had pre vi ously asser ted that “a coun try serves its own interests by pur -su ing free trade regard less of what other coun tries may do.” But now Krug man con -fesses that he has “been shocked not only by my own change of mind, but by someof my col leagues’, people who are long time advoc ates of glob al isa tion.”

We are not there yet on the immig ra tion debate. The situ ation more closelyresembles the state of free trade dis course in the mid-2010s, when research on the“China shock” by Autor and oth ers first appeared. But his tory sug gests that any dog -matic con sensus can hold back real ity only for so long. The next few years areunlikely to be kind to pro ponents of mass immig ra tion as eco nomic policy