Canada Benefits Economically from Immigration Gains, While Immigration to U.S. Declines

As noted here, net immigration to the U.S. declined last year, contributing to the nation’s lowest rate of population growth, only 0.48%,  in decades.

An analysis from the Brookings Institution indicates that in fact, that is the lowest rate of U.S. population growth since 1918.  Looking at the rate of population growth for the past decade, Brookings found that

The 2010s was a decade of fewer births, more deaths, and uneven immigration…. The 2018-19 period had an exceptionally low growth rate of 0.48%, with immigration declining to 595,000 people—the lowest level since the 1980s—and a drop in natural increase to below 1,000,000….While immigration may have been unusually low due to recent federal restrictions which led to a decline in the noncitizen foreign-born, relatively low natural increase levels are likely to persist due to the aging of the population.

One symptom of the aging population is the decade-wide loss in young people under age 18. Between 2010 and 2019, the nation sustained an absolute decline of 1.14 million youth.

Canada faces similar challenges due to declining fertility rates and an aging population.  However, in contrast to U.S. policy in recent years which has constricted legal immigration, Canada has put policies in place to aggressively boost immigration.

As a result, in 2019, Canada, with its population of approximately 37.8 million, added a net 437,000 immigrants, or 1.16% of its population, “its fastest population increase in 30 years, even with declines in fertility” according to a report in Bloomberg.

Canada’s immigration-driven population boom has been one of the few bright spots for the economy, credited with supporting the labor force and the housing market. Without the population increases, the country would be tracking much slower growth given productivity gains have remained weak for years.

The article notes that while U.S. economic growth in 2020 is forecast to exceed that of Canada’s, one economist surveyed speculated that Canada’s robust immigration growth may help it surpass expectations.

As the Brookings analysis indicates, with the natural decrease in U.S. population due to declining birth rates and an aging population,

immigration will become an increasingly important contributor to America’s health moving forward. As the country faces continued population stagnation, the 2020s will become a crucial period for understanding the role of immigrants in our economy and society.

It will be interesting to see what the future reveals about which approach, Canada’s or the U.S.’s, to immigration best leads to positive economic outcomes.