In a recent note, Goldman Sachs economists have delved into the potential impacts of U.S. immigration policies before and after the upcoming election, examining scenarios under both a continued Biden administration and a potential second Trump administration.
Net immigration to the U.S. surged to approximately 2.5 million last year, significantly boosting labor force and GDP growth while helping to alleviate wage pressures. For 2024, Goldman Sachs estimates net immigration will total around 2 million, which is double the pre-pandemic trend rate.
The outlook, however, hinges on several pre- and post-election policy decisions. President Biden’s recent changes, announced on June 4, aim to restrict a channel that could potentially account for 700,000 immigrants annually at current unauthorized migration rates.
“However, we think the ultimate effect would be a fraction of this as most affected immigrants would likely attempt other modes of entry,” Goldman economists wrote. “Legal challenges to the new rules might even block implementation altogether.”
Should President Biden secure a second term, the administration is expected to maintain the current immigration policies with minimal changes. The new asylum restrictions, while intended to reduce net unauthorized immigration, face legal and logistical challenges “but could lower net unauthorized immigration and limit the potential for upside immigration surprises this year,” Goldman noted.
This policy would set a daily limit of 2,500 unauthorized migrants encountered outside official ports of entry, with any excess being expelled back across the border. Given the daily rate was reported at 3,500 in May, this limit is likely to be immediately met, meaning that US authorities “would expel apprehended migrants back across the border, rather than releasing many of them into the US to await a court date.”
Goldman Sachs notes that several groups are excluded from this policy, such as unaccompanied children, victims of severe trafficking, and other vulnerable migrants. Moreover, the policy does not apply to asylum seekers at official ports of entry, where many affected by the new policy are likely to redirect their efforts.
In contrast, a second Trump administration would likely pursue more aggressive immigration restrictions. The range of outcomes under this scenario is broad due to the potential for substantial policy shifts and legal battles.
Goldman Sachs outlines two primary scenarios for net immigration under Trump:
1) High-End Scenario: If courts block major changes to asylum policies and limit the impact of deportations, net immigration could decline to around 1.5 million in 2025. This figure is still roughly double the 2017-2019 average reported by the Congressional Budget Office (CBO).
2) Low-End Scenario: If the Trump administration successfully implements substantial cuts to asylum claims and humanitarian parole, and enacts a more extensive deportation program, net immigration could fall below the 2017-2019 average of 700,000 per year and potentially approach zero temporarily.
“That said, it seems unlikely that net immigration would be negative on an annual basis even in that scenario,” economists argued.
The Trump administration’s proposed deportations face the highest uncertainty, with potential removals ranging from 300,000 to 2.1 million in 2025, according to Goldman.
