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Immigration And The Economy


So the U.S., Europe, China and Japan have lots of differences but one common problem - their populations are aging. Each faces a future with a shortage of young workers, but the United States has one big advantage - immigrants. And we wanted to talk about this with David Wessel. He directs the Hutchins Center at the Brookings Institution and is a contributor to The Wall Street Journal.

Hi there, David.

DAVID WESSEL: Good morning.

GREENE: All right. So the oldest baby boomers are in their early 70s now. And you know, we hear so much about the graying of America. But how does our country compare to other big countries?

WESSEL: Well, we're all getting older - that is, the share of the population over age 65 is growing - both because each woman in these societies is having fewer kids and because life expectancies are rising. We're simply living longer. But this phenomenon is more rapid outside the United States. So if you look at projections - the Population Research Bureau has some - and you look ahead to 2050 - that's 30 years from now - about 22 percent of the people in the U.S. will be over 65. But it'll be 26 percent and China, 31 percent and Germany and 36 percent in Japan.

GREENE: All right. So I mentioned, though, that the United States has a real advantage. Describe it for me.

WESSEL: Right. The reason we say it's an advantage is because economics of this are straightforward. The more working-age people you have to support each retiree, the easier it will be for working-age people to both care for old folks and enjoy rising living standards themselves. So what we have in the U.S. is, simply, even though fertility is down here over time - fewer kids per woman than it used to be - we're still significantly more fertile than the rest of the world - or at least more than Germany, Italy, Japan and China.

And second, we have, as you said earlier, a lot more immigrants. If you can't grow your own, you can import them. And the immigrants are usually younger than the people already here, more likely to be workers than retirees. And immigrant women tend to have more kids than their native counterparts. So if you look ahead to 2050, the Pew Research Center says if we had no immigrants at all, the U.S. population would stop growing. The number of people dying would equal the number of births.

GREENE: OK. So a larger population - if we talk about economics, does faster-growing population also mean a faster-growing economy?

WESSEL: Yes. I mean, the more people, the more workers, the more consumers, the bigger the economy. But what really matters is not the top line GDP growth; it's how big the economy is per person. So if you think of Nigeria - Nigeria's population is growing at 2.6 percent a year. That means, in order to give the same amount of stuff to people, its economy has to grow by 2.6 percent a year. But in the U.S., our population is growing much more slowly despite immigration, less than 1 percent a year. So we can deliver more stuff per person with a much slower economic growth rate.

But I think the important thing is, it's not only the number of people that matters; it's their age. The more working people, the easier it is to care for the large and growing number of retirees - the more people paying taxes for Social Security, Medicare and so forth - and the more workers available to care for the growing number of elderly. And that's where immigration plays a really important role.

GREENE: So can we say definitively that immigrants are a plus for the overall economy, or is it complicated?

WESSEL: Well, it's really hard to talk emotionally about immigration. I'm the son of immigrants. But if you just look at government budgets, the National Academy of Sciences panel found that it's a plus for federal government and it's a minus for many state and local governments because they have to pay for schools for so many of the immigrants' kids.

GREENE: David Wessel of The Brookings Institution. Always great to talk to you, David. Thanks a lot.

WESSEL: You're welcome. Transcript provided by NPR, Copyright NPR.