Kathmandu— Immigrants are a vital component of the American economy, contributing a cumulative $14.5 trillion fiscal surplus to the US government from 1994 to 2023, according to research from the Brookings Institution and Cato Institute. Despite this significant economic impact, recent data indicates a decline in the immigrant population – the first in over 50 years – raising concerns about future economic growth and stability as America’s native-born population ages and birth rates fall. Multiple studies demonstrate that reducing immigration negatively impacts the labor force, increases consumer prices, and hinders overall economic output, while also revealing immigrants are less likely to be incarcerated than native-born Americans.

Significant Fiscal Contributions

Immigrants consistently pay more in taxes at all levels of government than they receive in public benefits. A report released by the Cato Institute updated a model created by the National Academies of Sciences, Engineering, and Medicine to examine these impacts, confirming this long-held economic principle. The Council on Foreign Relations also found that immigrants generated approximately $1.7 trillion in economic activity in 2023, paying roughly $652 billion in taxes, with undocumented immigrants contributing nearly $90 billion of that total.

Labor Force and Economic Growth

The Congressional Budget Office (CBO) has affirmed that restricting immigration slows down the national economy and drives up prices. Conversely, increased immigration expands the labor pool, boosts tax revenues, and increases economic output. A recent analysis by the Center for American Progress highlighted that immigration accounts for about half of America’s labor force growth each year, a crucial factor given the country's aging population and declining birth rates. The research found that reductions in immigration could lead to negative job growth becoming the new normal.

Entrepreneurial Impact

Immigrants are driving forces behind innovation and entrepreneurship in the United States. Research indicates they have founded or cofounded 59% of America’s privately held startup companies valued at $1 billion or more, a contribution often overlooked in media coverage. However, recent policy changes by the U.S. Small Business Administration (SBA) – which halted loan approvals to firms not fully owned by U.S. citizens – threaten to stifle this entrepreneurial spirit.

Recent Policy Shifts and Economic Consequences

In 2025, the nation’s immigrant population began to decline after more than 50 years of growth, a trend that negatively impacts the US economy according to Brookings Institute studies. President Trump’s actions to reduce immigration resulted in net international migration dropping from 2.7 million in July 2024 to 1.3 million in June 2025. Mass deportations would further contract GDP and drive up consumer prices, particularly in labor-intensive sectors like agriculture, construction, and caregiving.

Crime Rates Among Immigrants

Contrary to popular perception, immigrants are less likely to be incarcerated than native-born Americans. A recent report by the Cato Institute found that undocumented immigrants are incarcerated at a rate 44% lower than native-born citizens, while legal immigrants have an incarceration rate 75% lower.

The decline in immigration presents a significant challenge to America’s economic future, and reversing this trend will be crucial for maintaining growth and stability as the population ages.

(With inputs from CounterPunch)

Originally published on abcnews.com.np.