Saturday, January 21, 2023

Has the drop in immigration contributed to inflation?


Inflation has been on all of our minds in recent weeks and months.  As previously discussed on ImmigrationProf posts (and here), a tight labor market has contributed some to increasing  prices.  Marketplace offers thoughts on the issue of immigration and inflation:

"A shortage of workers has been one of many economic trends that’s emerged during the pandemic. One contributing factor was a drop in immigration. Immigrants have accounted for a major share of labor force growth for many years, and some experts say their absence contributed to the inflation the country has been grappling with. 

Half the growth in the labor force since the year 2000 has come from immigrants, according to Mark Regets, a senior fellow at the National Foundation for American Policy. 

“They actually became more important during the pandemic,” he said. “They have been all of the labor force growth over the last three years.”

But that labor force has stalled. Early retirement among Americans generally was one big cause; a fall in immigration was another."


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