The writer is an FT contributing editor and chief economist at American Compass

When entering debates about immigration, economists have often checked their credibility at the door. This happens especially when the question is immigration of large numbers of unskilled workers (attracting the globe’s top talent is a separate issue). Both common sense and market dynamics suggest that this causes job quality for existing workers to decline and public services to suffer. Yet arguments to the contrary have poured forth from economists, conveniently coinciding with the self-interest of employers dependent on large pools of cheap labour and progressives eager to square their opposition to restrictions on immigration with their support for worker power.

The current is now reversing. On both sides of the Atlantic, left-of-centre political parties are discovering that unchecked immigration poses an existential threat to their electoral prospects. Enforcing the law and limiting the influx are suddenly on the agenda. And lo and behold, the economic arguments are now trickling in, confirming that this may indeed be wise.

In March, economists at the Federal Reserve Banks in Dallas and San Francisco attributed 30 per cent of the rapid increase in US housing prices from 2021 to 2024 to the surge in illegal immigration. When JD Vance made that point in the 2024 vice-presidential debate, calling illegal immigration “one of the most significant drivers of home prices”, economists fell over themselves to chastise him for supposed overstatement. But he seems to have been right.

Switzerland’s June referendum on a population cap provided another occasion for rethinking. Immigration is not a solution to an ageing population, according to economics professor Alan Manning, and spending on it can reduce productivity. One Swiss business leader called addressing labour shortages through immigration the “lazy solution” while another lamented that “pressure to improve productivity in industries and the service sectors has disappeared”.

This last point is especially important. If employers believe they will always have access to a large pool of readily exploitable labour, why would they shift their business models and operations towards better jobs or invest in higher productivity? A “job Americans won’t do” exists only if employers know they will be given someone else to do it instead.

A new paper by 2024 Nobel Prize-winner Daron Acemoglu, fellow MIT economists David Autor and Keelan Beirne, and the London Business School’s Andrew Scott provides another line of evidence. While they studied birth rates, not immigration, their findings bear directly on the latter.

Economists generally assume that a decline in available workers will mean stagnation and contraction and make the case for high levels of immigration on those grounds. Acemoglu and colleagues found the opposite: “In contrast to the prevailing wisdom, we find that lower birth rates so far have led to higher growth in GDP per worker across countries and higher wage growth across local labour markets in the US.”

Their explanation? “The endogenous, labour-saving response of technology to the scarcity of younger workers.” Simply put, less available labour led to technological innovation and investment, leaving the economy intact and, by boosting productivity and wages, improving outcomes for workers.

These arguments still warrant further research. But they alter the default in the debate. The idea that mass immigration alleviates housing shortages by providing more construction workers is now much harder to take seriously. The 1,470 economists who signed a letter in 2017 arguing that “immigration brings young workers who help offset the large-scale retirement of baby boomers” now need to proffer actual evidence to support their case.

The most telling line in that letter was the assertion that “on some issues there is near-universal agreement. One such issue concerns the broad economic benefit that immigrants to this country bring.” This claim of unanimity recalls the similar show of force on free trade during the debate in 2000 over China’s entry to the WTO. Among economists, testified then Treasury secretary Lawrence Summers, “there has been only one answer. That welcoming China into the global economic system is right for the American economy.”

Having to walk that judgment back has been humiliating for the economics profession. Just last month Nobel laureate Paul Krugman admitted that he had got it wrong. He had previously asserted that “a country serves its own interests by pursuing free trade regardless of what other countries may do.” But now Krugman confesses that he has “been shocked not only by my own change of mind, but by some of my colleagues’, people who are longtime advocates of globalisation.”

We are not there yet on the immigration debate. The situation more closely resembles the state of free trade discourse in the mid-2010s, when research on the “China shock” by Autor and others first appeared. But history suggests that any dogmatic consensus can hold back reality only for so long. The next few years are unlikely to be kind to proponents of mass immigration as economic policy.