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New Findings on the Fiscal Impact of Immigration in the United States

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Abstract

The National Academies of Sciences, Engineering, and Medicine (2016) report on the economic and fiscal effects of immigration included the first set of comprehensive fiscal impacts published in twenty years. The estimates highlight the pivotal role of the public goods assumption. If immigrants are assigned the average cost of public goods, such as national defense and interest on the debt, then immigration?s fiscal impact is negative in both the short and long run. If, instead, immigrants are assigned the marginal cost of public goods, then the long-run fiscal impact is positive and the short-run effect is negative but very small (less negative than that of natives). Highly educated immigrants confer large positive fiscal impacts, contributing far more in taxes than they consume in public benefits. To the extent that immigrants impose net costs, these are concentrated at the state and local level and are largely due to the costs of public schooling.

Suggested Citation

  • Pia M. Orrenius, 2017. "New Findings on the Fiscal Impact of Immigration in the United States," Working Papers 1704, Federal Reserve Bank of Dallas.
    • Handle: RePEc:fip:feddwp:1704
    DOI: 10.24149/wp1704
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    Cited by:

    1. Alberto Alesina & Marco Tabellini, 2024. "The Political Effects of Immigration: Culture or Economics?," Journal of Economic Literature, American Economic Association, vol. 62(1), pages 5-46, March.
    2. Moriconi, Simone & Peri, Giovanni & Turati, Riccardo, 2022. "Skill of the immigrants and vote of the natives: Immigration and nationalism in European elections 2007–2016," European Economic Review, Elsevier, vol. 141(C).
    3. Kim, Sunha & Faith, Myles S., 2020. "Cyberbullying and ICT use by immigrant youths: A serial multiple-mediator SEM analysis," Children and Youth Services Review, Elsevier, vol. 110(C).
    4. Sunha Kim, 2018. "ICT and the UN’s Sustainable Development Goal for Education: Using ICT to Boost the Math Performance of Immigrant Youths in the US," Sustainability, MDPI, vol. 10(12), pages 1-19, December.
    5. Fremerey, Melinda & Hörnig, Lukas & Schaffner, Sandra, 2024. "Becoming neighbors with refugees and voting for the far-right? The impact of refugee inflows at the small-scale level," Labour Economics, Elsevier, vol. 86(C).
    6. Moriconi, Simone & Peri, Giovanni & Turati, Riccardo, 2019. "Immigration and voting for redistribution: Evidence from European elections," Labour Economics, Elsevier, vol. 61(C).

    More about this item

    Keywords

    Immigration; fiscal impact; public goods;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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