Deep Dive: The Economic Impact of Refugee Resettlement

There is a common misconception that welcoming newcomers harms the United States economy — and politicians have used such claims to justify policy proposals that are harmful to refugees and immigrants. 

The problem is that it simply isn’t true.  

The question of whether this country should welcome refugees is not an economic one: It is a moral responsibility, and a recognition of the humanity and dignity of others. However, generations of immigrants and refugees have undeniably shaped the U.S. economy, and it is worth considering their effect on the country’s economic prosperity.

The answer here is clear: Studies show that refugees contribute more to the U.S. economy than they consume in government services, are likelier than members of the general population to launch businesses, and fill labor gaps in crucial industries. Curtailing the number of refugees in the U.S. would inarguably have a negative effect on the national economy. 

In the latest edition of HIAS’ Deep Dive series, we explore these points in more detail. 

Refugees contribute far more to the economy than they consume in government services

When refugees are resettled into the United States through the U.S. Refugee Admissions Program (USRAP), they qualify for a range of government services designed to help them manage their first months in the country and often rely on programs like Medicaid and SNAP.

But the cost of these benefits pales in comparison to what refugees give back. Between 2005 and 2019, the Department of Health and Human Services found that refugees and asylees contributed nearly $124 billion more to the U.S. economy in tax receipts than they withdrew in government services. 

In addition to taxes, refugees fuel economic growth through consumer spending: In 2022, refugees possessed a spending power of some $82 billion. By the time they have been in the United States for 20 years, they earn an average of $4,300 more per year than native-born citizens.  

The government services refugees receive in their first months in the United States aren’t a good example of wasteful spending. If anything, it’s the opposite. 

Refugees are more likely to be entrepreneurs and job-creators

Thirteen percent of refugees to the United States create businesses, a higher percentage than that of all immigrants (11%) or of the native-born U.S. population (9%). That refugees are so entrepreneurial is unsurprising, considering that nearly half (43%) were self-employed in their countries of origin. In 2022, the U.S. had over 190,000 refugee entrepreneurs who brought in over $6.7 billion in business income — and provide additional benefits through creating jobs and growing the economy. 

The percentage of refugee entrepreneurs would be even higher were refugees not subject to immense structural barriers, such as a lack of access to credit and capital. To address these roadblocks, HIAS established the Economic Advancement Fund (EAF), a community development financial institution that provides loans, business training, and technical assistance to refugees through the HIAS resettlement network.  

“For a lot of our clients, entrepreneurship is their primary occupation, it’s their identity, it’s who they are,” said EAF Director Phillip Bailey. “We are with them at all steps and points in their journey and really try to provide a continuum of services that are beneficial to any entrepreneur who comes to us for assistance.” 

Refugees fill labor gaps

According to the U.S. Chamber of Commerce, nearly every state in the country is facing challenges finding enough workers to fill vacant jobs. Millions of workers have left the workforce since the emergence of Covid-19, and labor force participation remains below pre-pandemic levels. Due to an aging population, observers expect this employment shortfall to persist until at least 2031.  

Welcoming refugees can partially address this problem. An American Immigration Council study found that 78.2% of refugees to the U.S. are working age (defined as between 18 and 64), compared to 61.9% of the U.S.-born population, and fewer than four percent are unemployed. 

Refugees regularly fill jobs in industries most in need of workers, such as health care — a solution to a problem that will only grow more acute as the American population ages. The need for home health aides is expected to grow by 25.3% between 2021 and 2031. Without refugees, finding enough workers willing and able to do this work would be significantly more challenging.