With thousands of people pouring into the streets of Minneapolis to protest the White House’s immigration crackdown, debate over President Donald Trump’s aggressive immigration policy has reached new heights. Identifying and deporting undocumented, so-called illegal immigrants has been a cornerstone of both of Trump’s terms in office (as it was for his predecessors, with Barack Obama earning the label “deporter in chief” from critics). Trump has argued for years that curbing net migration would protect jobs for American workers and boost domestic wages, ultimately protecting the U.S. economy, flying in the face of reams of economic research that immigration is actually a net positive instead.
Amid renewed tensions over the increased presence of Immigration and Customs Enforcement (ICE) in U.S. cities, new data offers striking counter evidence to the administration’s assertions that U.S. immigrants are sucking resources from the economy.
A white paper published on Tuesday by the Cato Institute, a libertarian think tank, found that over the last three decades from 1994 to 2023, immigrants (both documented and undocumented) have contributed more in taxes than they’ve received in local, state, or federal benefits. The fiscal surplus from immigrants totaled $14.5 trillion over this 30-year period. Moreover, according to the report, without the economic contributions of immigrants, public debt would be above 200%, or double the size, of the U.S. GDP. That’s a threshold that some analysts contend would result in a debt crisis.
The data was not fully disaggregated by undocumented or documented immigration status, but the report projected that undocumented immigrants decreased the national deficit by $1.7 trillion over the measured time period, contributing more than 11% of the total fiscal gains of immigrants to the U.S.
The ballooning national debt, which recently exceeded $38 trillion, has been a growing concern for economists, who fear the U.S. is spiraling toward a debt crisis that would spike inflation and interest rates, as well as leave the U.S. vulnerable to emergencies and national security breaches.
“For years, nativists in Congress and the administration have wrongly claimed that immigrants are behind the growth in debt and that the U.S. immigration system allowed foreigners to take advantage of Americans’ generosity,” David Bier, report coauthor and Cato Institute director of immigration studies, wrote in a Substack post about the paper. “Our data completely repudiates this view. Immigrants are subsidizing the U.S. government.”
How immigration boosts the U.S. economy
The Cato Institute’s calculations around immigrants’ relationship to the U.S. economy are based on the argument that the U.S. operates on extreme deficits, primarily through military and interest payments on past accrued debt. These factors don’t scale alongside population growth and are sunk costs that exist whether or not immigration increases.
Therefore, Bier told Fortune, a new person entering the country is unlikely to have a significant negative impact on U.S. debt because the lion’s share of the country’s deficit exists independently of them.
“That’s the kind of core way to think about what happens when we have a new person,” Bier said. “As long as they’re at average in their payment of taxes and receipt of benefits, then they’re going to reduce the deficit.”
Based on models from the National Academies of Sciences, Engineering, and Medicine (NASEM) and data from the U.S. Census Bureau’s Current Population Survey for March 1994–2023, immigrants are indeed paying taxes and require less spending on education and social services than their native-born counterparts. For example, in 2023, immigrants made up 14.7% of the U.S. population, but 17.3% of the share of taxes and 17.4% of the share of U.S. income. While immigrants often work lower-wage jobs, they work at a high rate (making up more than 18% of the U.S. share of workers in 2023), meaning they have higher per capita incomes and pay more in taxes than their share of the population.
Because immigrants work fewer government jobs than native-born Americans, they also require fewer old-age benefits like pensions. Many temporary or undocumented immigrants do not qualify for Social Security. Compared to U.S.-born individuals who cost nearly $200,000 per capita in old-age benefits, immigrants cost about $126,000 per capita.
Similarly, most U.S. immigrants enter the country in their twenties, meaning they have already completed the majority of their education and require less schooling than their U.S.-born counterparts. While U.S.-born individuals cost about $105,000 per capita for education, immigrants cost less than $50,000 per capita. There is a similar pattern of immigrants costing the government less than native-born Americans for needs-based services like welfare, as well as prisons and felonies, according to the report.
Debate over the economic impact of immigration
Experts have questioned how Trump’s policies, including around immigration, could impact the climbing debt tally. The Congressional Budget Office (CBO) forecast that should the temporary tax provisions (such as no tax on tips) in Trump’s One Big Beautiful Bill extend for the full 10 years, it could add up to $5.5 trillion to the national debt.
In a Cato Institute blog post from June 2025, Bier calculated that the spending in immigration enforcement outlined in the bill could also grow the country’s deficit by about $900 billion. Citing CBO data, he suggested the cost to remove 8.7 undocumented immigrants, asylum seekers, and parolees would be around $900 billion, taking into account the cost of federal law enforcement, deportation costs, and reconciliation amounts.
Trump’s spending bill appropriated nearly $170 billion to immigration enforcement, including tripling ICE’s annual budget with a $75 billion spending boost. In September, the CBO predicted that the immigration crackdown would result in 290,000 immigrants being removed from the country between 2026 and 2029, and said the crackdown would shrink the U.S. labor force. Economists have noted that negative net migration, which Trump has advocated for, would shrink the U.S. GDP growth by 0.4%.
Some immigration experts have argued to the contrary. In a 2024 testimony to the Immigration Integrity, Security, and Enforcement Subcommittee of the House Judiciary Committee, Steven Camarota, director of research for the Center for Immigration Studies, said undocumented immigrants have a “net fiscal drain.”
“The fundamental reason that illegal immigrants are a net drain is that they have a low average education level, which results in low average earnings and tax payments,” Camarota wrote. “It also means a large share qualify for welfare programs, often receiving benefits on behalf of their U.S.-born children.”
But even in cases where immigrants are using social services, those individuals are still likely working jobs, paying taxes, and spending money, Bier noted. This indicates that the U.S. has a better chance at paying back what it owes with those immigrants in the country than without them.
“Immigrants, just by showing up, they’re reducing the debt-to-GDP [ratio], and that’s a good thing for the country,” he said.
This story was originally featured on Fortune.com
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