Immigrant Labor Is Crucial to Economic Growth in Massachusetts & U.S., per BU Questrom Study

Rising immigration rates help offset economic stagnation caused by decreased U.S. population growth and falling workforce participation

BOSTON--(BUSINESS WIRE)--Sustained immigration is critical to maintaining population growth, a strong labor force, and economic progress in Massachusetts and across the U.S., according to a new study from Boston University Questrom School of Business.

According to the study, “Immigration is Vital to U.S. & Massachusetts,” industries such as construction, healthcare, and agriculture are highly dependent on immigrant labor force participation, without which, Massachusetts, and the country, would face a severe labor shortage, impeding economic growth.

The U.S. economy, as well as the economies of individual states, is driven by multiple factors, including population growth, size and workforce participation rate, job creation, and the ability to fill new openings. The Demographic Shift in the last decade – including slowing population growth, falling fertility rates and increased longevity – is impacting U.S. economic outlook. Over the same period, the percentage of immigrants in the nation’s workforce has risen. Recent growth in the U.S. labor supply can mostly be attributed to immigrants and their children.

“Increased immigration not only helps fill labor shortage gaps, but also generates new jobs through entrepreneurship,” said Professor Mark Williams, a Boston University Questrom School of Business master lecturer and the study's primary researcher. “Immigrants are more likely to be entrepreneurs than native-born counterparts, and are sizable job makers.” He added: “Immigration also creates favorable conditions for future prosperity, with second-generation immigrants experiencing upward mobility through higher wages, and gaining industry specialization.”

In Massachusetts, whose population has the fifth-highest percentage of immigrants in the country, foreign-born workers form what's known as a “barbell,” in which they make up significant portions of the labor force on both ends of the wage spectrum, comprising higher-skilled STEM positions and lower-skilled construction and service.

The influx of immigrants into Massachusetts is also helping to counteract the state's rising outmigration trend. More than 51,000 immigrants entered Massachusetts in 2023, making up for the nearly 40,000 people who moved out of the state. Immigrants comprise 1-in-5 workers in Massachusetts, including 26% of the state’s entrepreneurs, 29% of STEM workers, and 16% of nurses. Recent growth in the U.S. labor market can be primarily attributed to immigrants and their children

“Immigrants make up an important demographic when it comes to Massachusetts’ future economic success, including immigration targeting unfilled jobs should be one of the state’s major priorities,” said Professor Williams. “Facing increased outmigration, the state’s economy is directly tied to its ability to drive population growth, strengthen labor force, and improve workforce participation.”

Read the full study, “Immigration is Vital to U.S. & Massachusetts,” here.

About Mark Williams

Mark Williams is a faculty member in the Finance Department at Boston University’s Questrom School of Business and the former President of the Boston Economic Club.

About Boston University

Founded in 1839, Boston University is an internationally recognized institution of higher education and research. With nearly 37,000 students, it is one of the largest private residential universities in the United States. BU consists of 17 schools and colleges, along with the Faculty of Computing & Data Sciences and a number of multi-disciplinary centers and institutes integral to the University’s research and teaching mission. In 2012, BU joined the Association of American Universities (AAU), a consortium of leading research universities in the United States and Canada.

About Boston University Questrom School of Business

Founded in 1913, the Boston University Questrom School of Business is a global top-tier academic research business school. Led by Allen Questrom Professor and Dean, Susan Fournier, Questrom develops business leaders who create value for the world. Questrom redefines transformational business programs, strengthens partnerships with the business community, advances the impact of research on business, and manages the school as a high-performing enterprise committed to excellence with a service mindset. Comprising a renowned full-time faculty of 165 researchers, teaching faculty, and accomplished practitioners, Questrom generates insights to address today’s business challenges and prepares students with the tools they need to succeed from Day 1 in their professional lives. Questrom’s portfolio of academic programs is robust and includes a Top 20 undergraduate program of over 2,200 students; distinctive MBA offerings including 900 students in a full- and part-time MBA, the affordable Online MBA and specialty MBAs in social impact, health, and digital technology; several thriving specialized masters programs in areas including business analytics, mathematical finance, and management studies; and a rigorous PhD program. More than 50,000 Questrom alumni form a powerful global network of leaders driving value creation that changes the world.

QUESTROM MEANS BUSINESS. For more information, visit bu.edu/questrom.