60% of newly-arrived migrants have found jobs and are boosting the U.S. economy, study shows

60% of newly-arrived immigrants in the U.S. have found jobs relatively quickly, providing a boost to the economy and playing a relevant role in recent GDP growth, a new study by the Dallas Federal Reserve showed.

The report detailed that foreign-born population in the country increased by 2.6 million in 2022, and that the projected figure for 2023 and 2024 is much higher at 3.3 million, although data from the Current Population Survey has slightly lower estimates.

The researchers highlighted that immigrants' employment rate is close to the overall workforce participation, which causes "minimal lag between population and employment growth."

The main takes from the Dallas Fed, which is part of the Federal Reserve System, are that the population increase "leads to a noteworthy boost to real (inflation-adjusted) GDP growth and a "small inflation increase." When explaining its impact on GDP, the study said that the equation is not lineal, as there must be an expansion of capital to match the labor force increase, and that builds over time.

"This delay creates temporary shortages of capital relative to labor, boosting real returns to capital but depressing real wages," reads a passage of the study. As households seek to boost investment, they could "temporarily reduce consumption and choose to work more hours." And as "overall demand for goods increases more than supply," prices feel upward pressure.

The magnitude of the impact can vary based on different factors, such as resistance to reduce spending below a certain level, immigrants' level of spending and their technical skills. If this is lower, the study said, "the need for capital accumulation diminishes, softening the inflationary impacts."

"Based on our model estimates, over the past year the immigration wave contributed to the higher GDP growth by adding nearly 2 million newly employed workers. Remarkably, this significant economic enhancement likely occurred with very little effect on inflation," the study concluded.

The reports is the latest sample of growing literature that has highlighted immigration's positive impact on the U.S. economy, which has grown above estimates for most of the past years.

In June, a Goldman Sachs analysis said that "recent immigrants have flowed disproportionately into the parts of the labor force that were particularly tight in 2022, contributing to labor supply in places where it was most badly needed."

Fed Chair Jerome Powell also said in his latest press conference after its interest rate decision that "we've seen labor force supply come up quite a bit, through immigration, through recovering participation."