Immigration is surging, with big economic consequences

The rich world is in the midst of an unprecedented migration boom. Last year 3.3m more people moved to America than left, almost four times typical levels in the 2010s. Canada took in 1.9m immigrants. Britain welcomed 1.2m people and Australia 740,000. In each country the number was greater than ever before. For Australia and Canada net migration is more than double pre-covid levels. In Britain the intake is 3.5 times that of 2019.

Big movements of people have big economic consequences. According to the IMF, the foreign-born labour force in America is 9% higher than at the start of 2019. In Britain, Canada and the euro zone it is around a fifth higher. America’s immigration surge means that its economy will be 2% larger over the next decade than had been forecast. The influx of workers also helps explain the country’s strong economic growth. But immigration’s impact goes well beyond an arithmetical effect on GDP—it extends to inflation, living standards and government budgets. And recent arrivals differ from previous ones in an important way: more are low-skilled.