America is an outlier. GDP per capita is much higher than any other country with a population of 10 million or more. The US GDP per capita (PPP adjusted) is $85,373, while the next nine range from Taiwan's $77,858 to the UK's $58,880. (These are all his IMF estimates for 2024.) The gap is even larger if you prefer nominal GDP measured at current exchange rates. The US again has her $85,373 and Australia her $66,589 which puts her in second place.
There is another way in which the United States is an outlier. We have experienced far more immigration than any other country. What should we think about these two facts?
Opponents of immigration often argue that immigrants make America poorer by driving down wages. Perhaps this means that if we had less immigration experience, we would be even wealthier. Imagine if our population grew from her 330 million to her 110 million, about halfway between Germany and Japan. How much richer would we be in that case?
Immigration may be driving down U.S. incomes, even though the U.S. is much wealthier than all other medium-sized and large countries and admits far more immigrants than any other country. I think. Perhaps lower levels of immigration would make us even more of an outlier.
But does that seem likely?
David Levey shared with me his recent research on this issue. Alessandro Caiumi and Giovanni Peri. Here is the summary:
This article describes the approach used in a series of influential papers written in the 2000s to estimate how changes in the supply of immigrant workers have affected native wages in the United States. Revive, expand, and improve. First, he extends his analysis from the more recent year 2000 to include 2022. In addition, we introduce three important improvements. First, we introduce an IV that uses a new skill-based shift share for immigrants and demographic evolution for natives. This passes the validity test and shows that it has quite a bit of power. Second, we provide estimates of the impact of immigration on the native-born employment-population ratio to test for crowding out at the country level. Third, we analyze the occupational advancement of natives relative to immigrants. Use these estimates to calculate immigration. Native-immigrant complementarity and immigrant university skill contenthad a positive and significant impact of +1.7 to +2.6\% on wages for native workers with low education over the period 2000 to 2019, whereas There was no significant impact. We also calculate the positive effect of employment rates on most native workers. Even simulations for the most recent period from 2019 to 2022 suggest that the positive effect on wages for non-university graduates is small and there is no significant crowding-out effect on employment. (emphasis added)
I think this is the key:
Native-immigrant complementarity and immigrant university skill content
Other countries tend to be good at just one thing, like making cars or pumping oil from the ground. America's diverse population allows us to adapt to changing global trends. We are usually at the forefront when new industries develop (smartphones, fracking, professional basketball, e-commerce, electric cars, AI, GMO food, superhero movies, high-speed trading, etc.). We have all kinds of people. , can fill all kinds of niches.
Opponents of immigration may have in mind a model in which adding labor to a given amount of land reduces per capita output. But the real world is not like that. America's greatest resource is not its land, but its people.
PS. The per capita GDP of very small countries is often distorted by factors such as multinational corporate profits, oil revenues, and tax haven status.