From Orrenius et al. (2025), GDP growth is down 0.81% in 2026, 0.49% in 2027.
These estimates based on a VAR(2) using annual data, net unauthorized immigration as a percent of the previous-year U.S. population, annual growth rate of nonfarm payroll employment, the PCE annual inflation rate, and yearly GDP growth.
Source: Orrenius et al. (2025).
PCE inflation is 15 bps and 6 bps higher in 2026 and 2027 under baseline.
It’s interesting that the attributed positive effect on GDP from illegal immigration coincided with an economic rebound of pent-up domestic demand from the COVID shutdowns. I wonder how that was separated in the analysis. The old saying that correlation is not necessarily causation survives for a reason. Other voices say differently with regard to the net effect of illegal immigration.
https://budget.house.gov/imo/media/doc/the_cost_of_illegal_immigration_to_taxpayers.pdf
I accept that there may be different viewpoints and data used when attempting to estimate either the positive or negative impact of illegal immigration. Golf courses and slaughter houses love compliant, low-paid workers. Poor Americans might not like the competition for subsidized, low-income housing.
https://www.axios.com/2023/09/23/housing-crisis-migrant-immigrants-homeless
Bruce Hall It’s interesting that the attributed positive effect on GDP from illegal immigration coincided with an economic rebound of pent-up domestic demand from the COVID shutdowns
The authors used data going back to the 1950s, so the relationship is not just COVID rebound effects.
The old saying that correlation is not necessarily causation survives for a reason.
The authors used a structural VAR, so your comment really doesn’t apply.
I accept that there may be different viewpoints
The House budget stuff is garbage economics. Virtually every intellectually respectable study finds that immigration increases GDP. FYI, the non-partisan CBO found that immigrants increase GDP. The House budget “analysis” is just intended to provide people who don’t have a deep understanding of economics a kind of fig leaf to hide behind…as though there’s some kind of equivalence between MAGA economics and actual economics.
U.S. economic and weather data is going to be much more difficult to find or nonexistent under the Trump admin. One example – the Trump admin stopped collecting the economic impact from flooding – some estimates from recent Texas flooding is that it caused $15-22 billion in damages. https://www.bloomberg.com/news/articles/2025-07-10/trump-s-cuts-to-federal-government-are-making-data-disappear
Hmmm.
If I take the Orrenius data (tab Data 4), and I add up the annual net unauthorized immigration, we come out with just under 60 million in total through 2019. No estimate, even the most virulent ones, comes anywhere close to this. Through 2019, PEW Research, generally considered the gold standard of unauthorized population estimates, puts the total around 10-11 million, with really high right wing estimates around 22 million.
Further, I have no clue why Orrenius stops the data at 2019, given that we have monthlies to date, I believe.
I may have to spend more time on the matter. But there is a notably missing graph above, and that’s the unauthorized immigrant share and absolute numbers of the labor force. That should be graph 2, where the GDP growth graph sits now.
The horizontal axis is years or months? Or?
mike: years.