IIF Study: Trump-Era Immigration Policies Created Economic Ripples Across U.S.and Latin America
New research from the Institute of International Finance (IIF) details the significant economic consequences of the Trump administration’s restrictive immigration policies, impacting both the U.S. and remittance-dependent economies in Latin America. The study, authored by Marcello Estevao, Valentina Bonifacio, Martin Castellano, Maria Paola Figueroa, and Nikita Raman, finds a strong correlation between reduced migration flows and macroeconomic instability on both sides of the border. The findings are set to be published September 10,2025.
The IIF analysis documents how the sharp decrease in net migration under the previous administration affected U.S. labor supply, wages, and overall GDP growth. Together, the reduction in remittances constrained external balances and threatened financial stability in Latin American countries heavily reliant on these funds. utilizing panel econometric analysis, researchers quantified a “strong and persistent link” between migration patterns and remittance volumes.
The study highlights a critical trade-off for policymakers: the pursuit of stricter immigration enforcement can have unintended macroeconomic consequences. Reduced migration impacted the availability of labor in the U.S., perhaps influencing wage levels and economic expansion. For Latin America, the decline in remittances-funds sent home by migrants-created challenges for maintaining economic equilibrium and financial health. the IIF’s work underscores the interconnectedness of migration and economic stability in a globalized world.