Biden's Immigration Policies Boost Economic Growth, Fed Study Finds

New research shows Biden's open border policy increased the labor force, especially in industries facing worker shortages.

Published on Feb. 22, 2026

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A new study from the Federal Reserve Bank of San Francisco found that the influx of unauthorized immigrants under President Biden's open border policy had the beneficial effect of increasing the labor force, especially in fields where the U.S. needed workers, such as manufacturing and construction. The study concludes that the crackdown on immigration under the Trump administration reduced employment in those industries facing labor shortages, potentially slowing the pace of residential construction and driving up home prices.

Why it matters

The findings of this study are significant because the future growth of the U.S. economy is highly dependent on the expansion of the labor force. With the country's aging population, the slow growth of the native-born workforce will do little to replace retiring workers, making immigration a crucial factor in fueling economic growth.

The details

The study, conducted by researchers at the Federal Reserve Bank of San Francisco and the Dallas Fed, analyzed data on the arrivals and departures of unauthorized, working-age immigrants to all 3,100 U.S. counties. They found that an increase in the unauthorized local workforce equal to 1% of local employment raises local employment by 0.92%, effectively creating new jobs by providing workers in industries that needed to expand. The researchers were able to isolate the impact of immigration on employment by noting that immigrants tend to settle in areas where people from their home countries are already living.

  • The study focused on two main periods: the Biden era of extremely high entries from March 2021 to March 2024, and the Trump crackdown period lasting from March 2024 to March of last year.
  • The authors estimate that around 3.5 million unauthorized immigrants settled in the U.S. from 2021 to 2023.

The players

Daniel Wilson

A vice president in the economic research department at the Federal Reserve Bank of San Francisco and co-author of the study.

Xiaoquing Zhao

A researcher at the Federal Reserve Bank of Dallas and co-author of the study.

Milton Friedman

A legendary economist who extolled the benefits of immigration, arguing that unauthorized immigrants provide employers with workers they cannot otherwise obtain.

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What they’re saying

“The results suggest that U.S. employment growth is likely to continued downward pressure as long as declines in unauthorized immigrant worker flows continue.”

— Daniel Wilson, Vice President, Federal Reserve Bank of San Francisco (Economic Letter*, Federal Reserve Bank of San Francisco)

“The immigrants take jobs that residents of this country are unwilling to take. They're willing to provide employer with workers of the kind they cannot otherwise get.”

— Milton Friedman (YouTube podcasts)

What’s next

The Congressional Budget Office has acknowledged the power of immigration in driving economic growth, predicting that the reduction in net migration will slow the growth of the labor force and put downward pressure on GDP growth.

The takeaway

This study highlights the crucial role that immigration, including unauthorized immigration, plays in fueling economic growth and providing workers for industries facing labor shortages. As the U.S. population ages, immigration will become an increasingly important factor in sustaining the country's economic dynamism.