Immigrants contributed $ 2 trillion to US GDP last year : New Study

Immigrants who came from around the world contributed about $ 2 trillion to the GDP in the United States last year, making America the largest beneficiary of talented workforce in a variety of fields.

McKinsey Global Institute’s latest study ‘Global Migration’s Impact and Opportunity’ estimates that in 2015 the world’s 247 million cross-border migrants made an absolute contribution to global output of roughly $6.7 trillion.

They contributed 9.4 percent of global GDP, despite making up just 3.4 percent of the world’s population, the report that views impact of migration from diverse angels, says.

“This disproportionately high contribution can be largely explained by the fact that almost two-thirds of global migrants reside in the higher-productivity settings of developed economies,” the MGI report notes.

The United States was the largest destination for migrants at around 47 million.

The report says migration is a key feature of a more interconnected world.

“Despite significant concerns about its economic and social implications, the movement of people across the world’s borders boosts global productivity.

“The countries that prioritize integration stand to make the most of this potential—improving outcomes for their own economies and societies as well as for immigrants themselves.”

The institute estimates that migrants contributed roughly $6.7 trillion, or 9.4 percent, to global GDP in 2015—some $3 trillion more than they would have produced in their origin countries.

Among regions witnessing large entry or arrival of migrants, North America captured up to $2.5 trillion of this output, while up to $2.3 trillion went to Western Europe.

Other developed countries that benefited from migration in terms of GDP expansion included Germany ($550 billion), the United Kingdom ($390 billion), Australia ($330 billion), and Canada ($320 billion).

Significantly, the report reveals migrants originating from developing nations accounted for some $4.1 trillion (or roughly 60 percent) of the overall global impact of migration, and those from developed origins contributed some $2.2 trillion.

“Migrants of all skill levels make a positive economic contribution, whether through innovation, entrepreneurship, or freeing up natives for higher-value work.”

In addition to driving population growth, migrants make up a substantial share of the labor force in destination regions.

For example, from 2000 to 2014, they provided approximately 48 percent of labor force growth in the United Kingdom, 45 percent in Spain, 42 percent in Canada, and 37 percent in the United States.

India has the largest migrant population in the world at 15 million while more than six million Pakistanis haved moved to foreign countries.

“In general, migrants of all skill levels generate productivity gains in destination economies, even after taking into account differences between their labor force participation rates, unemployment rates, and productivity levels as measured against those of native-born workers of similar skill levels.”

The report denotes the migrants, of course, would have made an economic contribution if they had remained in their countries of origin.

“But mobility magnified their productivity, creating incremental value. MGI estimates that this incremental contribution by migrants in their new destinations vs. their predicted output in their original home countries was between $2.7 trillion and $3.2 trillion in 2015.”