In the early nineties, crime rate in the US began to rise. Most of these crimes were committed by the teenagers.

However, starting in the early 2000s, there was a drastic decline in the crime rate. Experts attributed the decline in crime rates to strong US economic performance during the 1990s, more policing activities, and the proliferation of gun control laws, among others.

Apart from these factors, the landmark Roe vs Wade judgment in 1973 that legalised abortion also played a key role in reducing crime rates.

Studies show that children born into a poor income households are uneducated and are more likely to take up criminal activities when they grow up. After Roe v. Wade, many women from poorer backgrounds were able to choose abortion. This significant factor led to a drastic and indirect effect on falling crime rates.

This explains a lesser crime rate in the US during early 2000s, with abortion arguably playing an important role.

Abortion and Immigration

Fast forward 2024. As the battle for the next US President intensifies, a key issue that both candidates are contending with is their stance on abortion. While Kamala Harris advocates legalisation of abortion, Donald Trump is generally seen as supporting states that have enacted abortion bans. Harris criticized Trump for his role in the Dobbs v. Jackson Women’s Health Organization ruling, which rolled back abortion rights. Trump appointed three of the Supreme Court justices who voted to overturn the landmark decision. The long-term impact of abortion curtailment, studies point out, could be the growth of an educated workforce.

A higher uneducated workforce in the long run can inhibit growth. Cross-country evidence suggests that increased investment in education is associated with higher per capita income.

In the early 1960s, China, India, and South Korea had similar levels of per capita income. The dramatic rise of South Korea to high-income status and China to upper middle-income status is largely attributed to their significant investment in primary education as a proportion of GDP (see graph).

Out of the 101 middle-income countries from the early 1970s, only 23 advanced to become developed nations by 2018. Almost all of these successful countries placed a strong emphasis on education.

While the impact of abortion on a nation’s economic well-being can be felt over a longer period, immigration is the other contentious issue among the US presidential candidates. Immigration can, however, have more immediate effects on economic and social conditions.

Trump criticized the Biden-Harris administration for being lenient on immigration, claiming that their policies have allowed “terrorists,” “criminals,” and “drug dealers” to enter the US. Additionally, a more liberal approach to immigration contradicts Trump’s own “America First” policy.

It is commonly perceived that immigrants take away local jobs. However, this may not always be the case. Whether for high-skilled or low-skilled positions, the US has historically effectively utilised foreign migrant labour without significantly displacing native workers and increasing the wage.

A recent analysis by the Brookings Institution estimated that employers could add 160,000 to 200,000 jobs per month this year without significantly leading to a rise in wage or price inflation. Without the influx of immigrants, the job growth would likely have been closer to 60,000 to 100,000 per month. In fact, the US has plenty of jobs for the migrant population.

A study at the Yale University found that without immigration, the labour force would have decreased by about 1.2 million people from 2019 to the end of 2023 due to population ageing. The nation’s ageing population is leading to labour shortages in some industries and may result in a smaller workforce paying taxes to support federal programs like Social Security and Medicare.

Take for example, the State of Maine in the East Coast. With a median age of 45.1, Maine has the oldest population of any US state. Maine is known for its abundance of lobsters and its large older population are increasingly unable or unwilling to catch, clean, and sell these crustaceans, which constitute a $1-billion industry for the state.

As a result, companies are turning to foreign-born workers to fill the gap. As the US ages, Maine provides a glimpse into the potential economic impact and highlights the crucial role that low-skilled immigrants are likely to play in filling the labour market gaps created by the retirement of native-born workers.

While the influx may present near-term challenges, it is also enhancing the American economy’s potential. Employers are able to hire more quickly, thanks in part to the influx of labour.

Immigration could help reduce the federal deficit by stimulating economic growth and expanding the working-age tax base. Data suggests that immigration has contributed to a growth of 2 million in the labour force, annually. Job growth has been strongest in leisure, hospitality and construction.

Slower growth in Japan and Europe can be attributed to an ageing population and historically a restrictive immigration policy. As populations in wealthier nations age, GDP growth tends to slow, support costs rise, and government budgets come under increased pressure.

Many empirical studies have found that GDP growth slows roughly one to one with declines in labour force and population growth. Viewed through this lens, the US’s openness to labour immigration has helped maintain the US consumption — a key component of GDP .

The writer is Professor, Mahindra University, Hyderabad