Arbeitspapier

The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates

Immigration policy can have important net fiscal effects that vary by immigrants' skill level. But mainstream methods to estimate these effects are problematic. Methods based on cashflow accounting offer precision at the cost of bias; methods based on general equilibrium modeling address bias with limited precision and transparency. A simple adjustment greatly reduces bias in the most influential and precise estimates: conservatively accounting for capital taxes paid by the employers of immigrant labor. The adjustment is required by firms' profit-maximizing behavior, unconnected to general equilibrium effects. Adjusted estimates of the positive net fiscal impact of average recent U.S. immigrants rise by a factor of 3.2, with a much shallower education gradient. They are positive even for an average recent immigrant with less than high school education, whose presence causes a present-value subsidy of at least $128,000 to all other taxpayers collectively.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 15592

Klassifikation
Wirtschaft
International Migration
Forecasts of Budgets, Deficits, and Debt
Geographic Labor Mobility; Immigrant Workers
Thema
immigration
fiscal
tax
revenue
budget
deficit
surplus
capital
cost
benefit
dividend
subsidy
burden
social security
welfare
outlays
balance
foreign
skill
government
public

Ereignis
Geistige Schöpfung
(wer)
Clemens, Michael A.
Ereignis
Veröffentlichung
(wer)
Institute of Labor Economics (IZA)
(wo)
Bonn
(wann)
2022

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Clemens, Michael A.
  • Institute of Labor Economics (IZA)

Entstanden

  • 2022

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