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1 1 (July 2, 2025)

handle is hein.amenin/aeiaffi0001 and id is 1 raw text is: Wvendy Edelberg, Stan Veuger, and Tar Watson We assess the macroeconomic imolications of the observed anld xpected charges to immigra- tior policy during thesecond Trump administration. We project t net migration in 2Q25 will be between -525,000 and 115,000, reflecting a dramatic decrease in inflows and sornewhat higher outflows, Net rnigratiorn may be reduced even further in 2026 before rebounding in 2027 and 2028. These changes wiil reduce gross domestic. product growth y y0 3-0.4 percentage points in 2025 and put sirificant downvvard pressure on growth in the abor force and enployrent. Mon thly payroll er ployiert rowth could be near zero or negative in the neti few years. In December, we relied on our assessment of Presi- dent Donald Trump's statements on the campaign trail and the first Trump administration's actions to offer a high and a low scenario for 2025-28 immigration flows (Edelberg et al. 2024). For example, we predicted net immigration of between -650,000 and 1.3 million for calendar year 2025. We now have information about the administra- tion's actual immigration policies to date and a clearer picture of its priorities. Here we offer an updated set or scenarios and discuss their macroeconomic impli- cations. Our revised projections of net migration for 2J25 span a narrower range, from about -525,000 to 1-5,000, reflecting our expectation ofseverely curtailed inflows and sonmewhat higher outflows than in recent years. Though small positive net flows are within our projected range and certainly possible, we believe zero or net negative migration for the year is more likely 'hese changes will reduce gross domestic product (GDP) growth by 0.3-0.4 percentage points in 2025. For the remainder of 'rump's term, there is natu- rally more uncertainty. We anticipate that net micra- tion could be even lower in ,2-26 than in 2025 before starting to rebound in 2027 and 2028 as the adverse economic and political consequences of the extreme policy stance becone clear Slowing minigration will put signiicant downward pressure on growth in the labor force and employment. Potential empioymeot growth., ineaning employment growth when the labor market is operating sustain- ably at ll employment, could be berween o,ooo and 40,000 jobs a month in the second half of 2025 AMERICAN ENTERPRISE iNSTITUTE July 2025 Immigration Policy and Its Macroeconomic Effectsin the Second Trump Administration