Immigration Expands Labor Supply for Growth

Steps:

• Identify how labor market changes impact economic growth: growth requires more workers or productivity.
• Evaluate each option's effect on labor supply or skills.
• Assess A: unions may raise wages, reducing employment.
• Assess B: earlier retirement shrinks workforce.
• Assess C: less training lowers productivity.
• Assess D: open borders increase available workers.

Why D is correct:

• Removing immigration controls increases labor supply, raising potential output per the production function Y = F(K, L), where more L (labor) boosts GDP growth.

Why the others are wrong:

• A: Increasing union action often leads to higher wages and strikes, decreasing labor flexibility and employment.
• B: Lowering retirement age reduces the working-age population, contracting labor supply.
• C: Reducing worker training diminishes human capital, slowing productivity and long-term growth.

Final answer: D