The United States is home to the largest immigration population in the world making immigration policy the most widely debated topic amongst US citizens and policy makers. In spite of heavy debate, the best immigration policy, supported by economic and empirical evidence, is to allow the natural rate of immigration to continue without any restrictions. Using empirical data from 1850 to 2013, the foreign-born population of the United States rose from five percent in 1970 to thirteen percent in 2013 (U.S Census Bureau, 2013). A one hundred and sixty percent change in population that has lead to positive changes in the American labor market. The positive changes, evidenced by economic research, show that the increase in population lead to an increase in labor-force participation, or increase in labor supply, and an increase in investment by firms. The overall net effect of these conditions, suggested by economic theory, is the absence of a long-run reduction in jobs or wages for natural-born American citizens. Economic research supports the claim that the increase in foreign-born population has not led to lower wages for natural-born American citizens. When immigrants enter the U.S. labor force they are considered imperfect substitutes for American laborers, meaning they are competing for different jobs and put little to no downward pressure on American’s wages. New immigrants only create competition for jobs for older immigrants and those Americans without a high school degree. Established immigrants are the population that experiences reduction in wages from new immigration. A recent study has actually found that high-skilled immigrants are complementary with natives; with human capital spillovers stemming from interactions among workers (Blau and Mackie, 2017). A high number of innovative immigrants submit new patents, graduate with upper-level science and technology degrees, and hold influential positions at venture capital firms. Highly skilled immigrants work with natural-born Americans to increase productivity in the American labor force; resulting in an increase in the average wage rate for American laborers. A more in-depth look at the job sectors skilled and unskilled immigrants are entering in the American labor market further proves that immigrants are complements to American laborers and do not threaten to replace them. The language skills required by many jobs are often lacking for immigrant workers, educated and not. Less-educated immigrants are more likely to be employed in manual labor-intensive jobs such as agriculture and construction. Americans lacking higher education, working in construction and agriculture, face ambiguous competition from immigrants in these industries because they posses language skills the immigrant workers lack, making them eligible for different jobs where communication skills are valuable such as sales and service sector jobs (Peri and Sarber, 2009). Immigrants with higher education also face similar language barriers making them better candidates for scientific and technical jobs where high-level communication skills are not required. Highly educated American laborers face little competition from similarly educated immigrants in management, media, and communication-dependent jobs. The natural rate of immigration channels foreign-born laborers into concentrated job sectors where immigrants are already employed. Illustrating once more that earlier immigrants are the laborers forced to compete with new immigrants, not natural-born Americans.Immigrantlaborers are increasing productivity for firms, and the overall labor market,by not only bringing new talent and innovative ideas to the table but also byworking with Americans. Highly educated, foreign workers are more likely tohold a degree in science or mathematics, often a signifier of ingenuity andprofessional aspiration. Economic theory shows a correlation between a skilledlabor force and rapid GDP growth. Over the last 150 years, three quarters ofthe U.S. GDP growth can be linked to improvements in education and a greateremphasis on research-based innovation (Fernald and Jones, 2014). Areascontaining greater concentration of educated people, immigrant and native,experience faster productivity growth (Peri, 2012). The less educated Americansmentioned earlier, who leave manual labor for communication-based jobs leads toefficiently allocated labor. Immigrants, who work with Americans, not onlyincrease average productivity but also their average wages, all due to naturalimmigration.Themedia and some policy makers like to paint the picture that immigrant laborersare taking American jobs. Immigrants do increase labor supply but they puttheir wages directly back into the economy by purchasing goods and services inthe domestic economy. Their demand for U.S. goods and services increases firms’demand for labor to be able to meet their production needs, causing the labormarket to expand naturally to meet our domestic needs. Basic economic theoryproves that an increase in the supply of labor, caused by immigration, maydeflate wages at first, but over time firms react by increasing theirinvestment to outweigh any changes in capital per worker. Thus, restoringwages. Increases in the capital-to-labor ratio prevent decreases in thelong-term average wage. This can be demonstrated by a comparison of thecapital-to-labor ratio in 1980 to the ratio in 2013. In 1980, the ratio was4.94, increasing to 5.75 in 2013 (Bureau of Labor Statistics, 2014). Theextrapolation of the capital-to-labor ratio occurs at the same time as theincrease in foreign-born population from the U.S. Census numbers. The naturalinflux of immigrants increases investment by American firms. Documentedand undocumented immigrants create net positive effects for the federal budget.The characteristics of the immigrant population (age, education, and skill)determine how much their fiscal impact varies at the state and local level.Immigrants do not generate any additional costs for the U.S. military and theirtaxes pay for defense spending. This results in a reduction of the federal taxburden on natural-born American citizens because most immigrants are notdrawing social security or other non-defense related spending. Immigrants willpay fewer taxes and require less assistance from the government than nativetaxpayers, the exception being the Medicare program. When immigrants do requiregovernment assistance, the use of Medicare, the average costs of the assistancethey receive is below the overall average cost for the program. Naturalimmigration creates a smaller net cost for the government (Ku and Bruen, 2013).Thedrawback to this natural immigration plan is the cost immigrants create toAmericans at the state and local level. Generally, less educated immigrantshave larger families and, therefore, more children using the public schoolsystem. The K-12 public education system is the largest piece of state andlocal budgets. The cost per child of an immigrant will also be higher if thechild is not fluent in English (Congressional Budget Office, 2007). Thiscreates short-term costs by the immigrants to their state and local government.Economic mobility and future tax payments of second-generation immigrants morethan covers their initial financial burden in the long-run. The socioeconomiccomposition of immigrant populations in each state determines their fiscalimpact. This holds because an immigrant’s total cost to their state and localgovernment is directly proportional to their education and income levels. Anatural immigration policy without restrictions would still benefit theAmerican labor market because immigrants are more than paying back their publiceducation costs over the long-run. Immigration’seffects on the United States economy and labor market are broadly positive(Chicago Booth IGM Forum, 2013). It does not matter if immigrants are educated,illegal or legal, they will not replace American laborers or reduce theirlong-term wages. Immigrants may cause dislocations in the labor market in theshort-run, but the positive net effect of their labor-force participationcompensates for the short-term hiccup. Immigrants increase productivity in thelabor market, pushing Americans to work higher-paying jobs and increasing thepace of research, innovation, and overall growth. Immigrants help to keep thelabor force in America young and kicking as baby boomers retire. Immigrantsalso shoulder the tax burden that finances retirement for the elderlypopulation, helping natural-born Americans take care of their elderlyrelatives. Americans, especially at the state and local level, may have toabsorb the initial costs of public education for immigrant families but they areinvesting in our country. Their investment will yield a net-positive return forour country for years to come.Works CitedBlau, Francine and Mackie, Christopher, National Academies of Sciences, Engineering, and Medicine. 2017. The Economic and Fiscal Consequences of Immigration. Washington, DC: The National Academies Press. https://doi.org/10.17226/23550.Borjas, George, “The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market,” Quarterly Journal of Economics 118, no. 4 (2003): 1335–1374.Bureau of Labor Statistics (2014). U.S. Log Capital-Labor Ratio, 1948-2013.Card, David, “Immigration and Inequality,” American Economic Review 99, no. 2 (2009): 1-21.Chicago Booth IGM Forum, “Low-Skilled Immigrants,” and “High-Skilled Immigrants,” 2013.Congressional Budget Office, “The Impact of Unauthorized Immigrants on the Budgets of State and Local Governments,” December 2007.Fernald, John and Jones, Charles, “The Future of US Economic Growth,” American Economic Review 104, no. 5 (2014): 44-49.Ku, Leighton and Bruen, Brian, “The Use of Public Assistance Benefits by Citizens and Non-citizen Immigrants in the United States,” Cato Working Paper No. 13, February 2013.Peri, Giovanni, “The Effect of Immigration on Productivity: Evidence from U.S. States,” Review of Economics and Statistics 94, no. 1 (February 2012): 348–358.Peri, Giovanni and Sparber, Chad, “Task Specialization, Immigration, and Wages,” American Economic Journal: Applied Economics 1, no. 3 (July 2009): 35–169.U.S. Census Bureau (2013). Foreign-Born Share of U.S. Population, 1850-2013.Get Help With Your AssignmentIf you need assistance with writing your assignment, our professional assignment writing service is here to help!Find out more