Updates From The Immigration Literature in 2025

Academic literature is not static. There are new papers published all the time, and some of those papers meaningfully update what we know (or think we know) about a subject. Since this is a living literature review, it too updates as events happen.

Below, I discuss what we’ve learned in the past year about topics previously covered in this living lit review.

US Immigration Updates

Updating Undocumented People In The United States

2025 and 2026 have seen increased immigration enforcement, with many more ICE arrests and interior deportations increasing 4.6x. This has resulted in a significant slowdown of migration to the United States, including of legal migration. Brookings estimates that for the first time in at least half a century, more people left the United States in 2025 than entered it.

Perhaps unsurprisingly, this does not look great for the American economy. The Dallas Fed estimates that declining immigration will knock a point off GDP growth, and the Penn Wharton Budget Model has produced a model of the effects of deporting 10% of undocumented people per year.

Over four years, Penn estimates this will increase the deficit by $350 billion and decrease overall GDP. The effects on GDP/capita are more ambiguous; there is a short-term increase (particularly for the remaining undocumented workers who manage not to be deported), followed by a longer-term decline.

They find that most of the high-skill population will net lose out under mass deportations. This includes both authorized immigrants and the native-born. Older high-skill workers are the exception, as their working lifetimes will not include the longer-term decline. The picture for low-skill authorized immigrants is more mixed, with most having net gains (particularly older workers or those with high wages), but younger workers ending up worse off.

Updating H-1B Visas and the American Economy

In September 2025, the US introduced a new $100,000 fee on H-1B visas. I wrote at the time that I did not think this was a good idea.

This fee was the brainchild of George Borjas, who served in the Trump administration. In a 2026 paper, he argued that H-1B visa holders earn 16% less than similarly credentialed Americans, suggesting firms might be willing to pay an additional fee to continue hiring these low-wage workers. He calculated the revenue-maximizing fee would be between $118,000 and $264,000, and would have no impact on the number of H-1B visas issued.

The Economic Innovation Group argues that Borjas’ paper has data errors, and the actual wage gap is much smaller, at around 5%. In this case, a $100,000 fee would be far more than an employer would be willing to pay for a H-1B visa.

Michael Clemens also argues that Borjas has made data errors, but he finds that H-1B visa recipients actually command a small wage premium relative to the native-born. In this case, it is extremely unlikely that an employer would wish to pay an additional fee.

I have not gone through the data in these papers in enough detail to litigate who is correct, though Ozimek and Clemens’ point that Borjas uses 2020-2023 salary data for immigrants and only 2023 for the native-born seems hard to argue with. Revealed preference also seems to suggest that the revenue-maximizing fee is considerably less than $100,000, because overall fees collected on H-1B visa applications have decreased substantially since the fee was introduced.

Brain Drain and Brain Gain Updates

Updating What happens when you send Ugandan students to Germany?

Malengo is a program that provides a loan for Ugandan students to attend university in Germany. The expectation is that many students will then get jobs in Germany, and earn perhaps 20-50x what they would in Uganda. Students that stay will also pay back some or all of that loan.

Last year, they updated their model. They now estimate that the program produces 28x the returns of a cash transfer program. The positive update largely comes from moving consumption gains forward in time - even while attending university, consumption is some 7x what it would be in Uganda.

That being said, I think the cost-effectiveness of Malengo remains fairly uncertain until their first couple of cohorts of students graduate. Since the goal is to increase income largely through students choosing to stay in Germany after graduation, we still need to know what their labor market placements will look like.

Updating Migration of Doctors and Nurses

I have previously posited that there are significantly diminishing returns to additional medical personnel in places that already have a reasonable supply of medical personnel. I still think this is true, but I was surprised to see that the effect of adding or subtracting physicians is still detectable even in high income countries.

For instance, Dodini, Lundborg, Løken and Willén 2025 estimates that losing a doctor in Sweden results in 0.21 deaths per year.¹ Grabowski, Gruber and McGarry 2026 estimates that each additional immigrant health worker in the US prevents 0.07 deaths per year,² though this may be higher than in other contexts because immigrant health workers appear to be of higher quality than US-trained physicians.³

There does not appear to be a saturation level at which point additional physicians are not helpful. This would seem to suggest that expanding the supply of health workers is important in almost all contexts.

This would seem to make the general equilibrium result found in Abarcar and Theoharides 2024 extremely important. Abarcar and Theoharides shows that you can end up with a net increase in the supply of health workers even in a country with significant emigration if the following two conditions are met:

1. High wages outside the country draw people into health professions.

2. Supply of health professionals is allowed to expand to meet demand.

Some of the newly-qualified health professionals will migrate, but not all will.

If supply is not allowed to expand, you will probably have a net brain drain effect.⁴ So: expanding supply is very important; without it, migration can be net negative.

UK Immigration

Updating Are recent immigrants a “ticking time bomb” for British public finances? / UK Immigration and Public Services

We have a couple new reports from the Migration Advisory Committee, focusing primarily on the 2022-2023 cohort of immigrant entries. (This is the peak of the “Boriswave”.)

This has an interesting analysis on the fiscal impacts of each visa type, with a deeper dive into care worker fiscal impacts here.

The average skilled worker main applicant will pay £689,000 more in taxes than they receive in benefits (in net present value terms). The average health and care worker main applicant will pay £54,000 more in taxes than they receive in benefits.⁵ Care workers are net negative (-£36,000) while higher-skilled professionals are net positive.

Dependents are somewhat less fiscally positive; the adult dependents of skilled workers (e.g. spouses) are just about break-even, while the adult dependents of health and care workers cost £67,000 more than they contribute in taxes.

People who enter on partner visas are the most fiscally negative, at NPV -£109,000. This is consistent with the low labor force participation rate for this group (<50%). It’s not overly surprising that a group that is only 50% in work is fiscally negative.⁶

However, when considering the types of visas that the MAC analyzes, the cohort as a whole (skilled workers, their dependents, health and care workers, partners) is highly fiscally positive. They estimate that the 2022-2023 cohort of these visas will contribute £44.4bn more in taxes than they receive in benefits.

This is not the overall fiscal effect of the 2022-2023 immigrants, though, as we don’t know the overall fiscal cost of those entering on humanitarian visas.⁷ 2022 was the peak of the influx from Ukraine; about 40% of immigrants that year entered on a humanitarian visa.

Given how positive those who entered on work visas are, though, these entrants can be significantly fiscally negative and the whole cohort will be positive. All other visa entrants can have a fiscal impact of -£122,781 (that is, more negative than any other visa type) and the whole cohort would still be fiscally neutral.⁸

1. 3.74 additional physicians leaving results in 17.6 additional deaths.

2. Specifically, they find that each additional 1,000 immigrants to the US produces 143 additional health workers. These health workers prevent 9.8 deaths, or 0.07 deaths per health worker.

3. Since the US has some of the highest healthcare salaries in the world, I could imagine that it draws in some of the most talented doctors from around the world.

4. Given that condition 1 - there are high wages in health professions outside of low-income countries - is unlikely to change.

5. This is, of course, ignoring any other positive impacts from increasing the number of health workers in the country, as discussed above.

6. Increasing the income threshold for sponsoring partners is intended to address this, but this seems like such an odd policy choice. Is one only allowed to fall in love with a non-Brit, marry them, and live with them in Britain if you make greater than median wage? Surely the restriction here falls on your own citizens as much as migrants. And generally, citizens are allowed to make choices that cost their government a lot of money, particularly in countries where medical costs are covered by the government. No one prevents you from smoking a pack a day, even though it will cost the government more than bringing a foreign partner to the UK.

7. I don’t think I can really use previous numbers on refugee earnings, as the Boriswave cohort was largely from Ukraine and Hong Kong - not previously countries that had sent many refugees to the UK, and with a significantly different skill distribution and likely earnings potential.

8. Note that this is the “worst case” for immigration in the UK; 2022 had significantly more dependents and refugees than any other year, so if it’s fiscally neutral, every other year definitely is.