Lawler: Observations on the Recent Surge in Net International Migration
NOTE: Housing economist Tom Lawler has written extensively on demographics and the impact on household growth and housing demand. Last November, Lawler reviewed the most recent Census projections: Lawler on Existing Home Sales, Population Projections and Household Slowdown. Today he discusses the recent surge in Net International Migration.
From Tom Lawler:
One of the biggest demographic stories of the past two years has been the recent surge in net international migration (NIM). While this surge is not reflected in the latest Census Bureau’s “official” population estimates and one-year-ahead forecasts (so-called “Vintage 2023), that is because these estimates did not account for the rapid increase in “unauthorized” immigration over the past two years.
Estimates of NIM over the past few years vary considerably. For example, in its January 2024 demographic forecast update the CBO estimated that NIM was 3.267 million in 2023, up from 2.674 million in 2022 and 1.171 million in 2021. (These are calendar-year estimates). This contrasts markedly with Census’ Vintage 2023 NIM estimates of 1.139 million in the 12 months ending June 2023, 999 thousand in the 12 months ending June 2022, and 376 thousand in the 12 months ending June 2021.
Goldman Sachs, also incorporating data on unauthorized immigration, estimates that NIM in 2023 was 2.5 million, a bit below the CBO estimate but well above official Census estimates from the Population Division.
While I don’t rightly know what the “best” estimate is, it is clear based on data from the Department of Homeland Security (US Customs and Border Protection (CBP) that the official Census estimates of NIM are way too low.
Below are some data from the CPB on CPB encounters and CPB repatriations, as well as Southwest Border USBP releases and OFO Paroles. Note that encounters do include some “double-counting” of people “encountered” more than once. USBP releases include individuals processed by USBP with a Notice to Appear (NTA) released on their Own Recognizance (OR), Notice to Report (NTR), Prosecutorial Discretion (PD), Paroles enrolled in Alternative to Detention (ATD), or Parole with Conditions, while OFO Paroles include individuals processed at a POE and released from custody with a disposition of deferred inspection, NTA, or Parole.
As the table shows, with the exception of 2019 releases/paroles of unauthorized immigrants at the Southwest border used to be fairly small but have surged over the last few years. These data clearly indicate that NIM over the last two years has been a lot higher than assumed in Census’ Vintage 2023 population estimates.
Below is a table from the Executive Office for Immigration Review of the Department of Justice showing initial immigration case receipts by fiscal year. (Initial receipts equals removal, deportation, exclusions, asylum-only, and withholding only cases.)
In terms of employment, an unauthorized immigrant who files an asylum application must wait 150 days before applying for an I-765 work permit and must wait an additional 30 days to receive work authorization. As such, the lag between when someone applies for asylum and when that person can get a work permit is at least 6 months, and it sometimes takes longer because of processing delays.
Below is a table from the USCIS showing approved initial I-765 applications by selected categories, by fiscal year. Note that a significant number of I-765 applications are not by people awaiting asylum.
More updated reports from USCIS indicate that total approved I-765 applications in the five-month period ending February 2024 were up by about 82% from the comparable period of a year earlier. However, these data are for total approved applications (including renewals/replacements) and not just initial applications.
Obviously, there was a huge increase in the number of initial approved I-765 EAD applications in FY 2023, and the astute reader will note that the increase in these applications lagged the jump in asylum cases/CPB releases/paroles. However, I don’t rightly know how to translate these data into actual foreign-born job growth.
In terms of reported employment figures, it is likely that most, though probably not all, of the increase in foreign-born job growth is captured in the establishment survey. That is not the case, however, for the household survey, which is “controlled” to Census population estimates and one-year ahead forecasts. If in fact population growth has been substantially higher than Census estimates/projections suggest because of much higher NIM, then it is extremely likely that the household survey has significantly understated job growth. And, in fact, several analysts have suggested that much of the relative weak growth in the household employment measure compared to the establishment survey measure is attributable to the Census population estimate undercount.
It should be noted that the financial wherewithal of most folks who have crossed the border and been released pending asylum cases is extremely limited. In addition, as noted above, most cannot work for at least six months, and many find the paperwork needed to file for asylum and then file for work authorization challenging. In many cases these people at first end up either in shelters or other temporary local government housing. And finding jobs after receiving work authorization can often be challenging. And, of course, asylum applicants still have a future court case looming, though given the current case backload it is often years before a case is heard.
As such, “traditional” methods of translating population growth to labor force growth, job growth, and (especially) household growth and housing demand may not be appropriate in the current environment.
Note: This is important for the demand side for housing. For some additional thoughts, from a few weeks ago, see: Immigration and Household Formation