The indirect fiscal benefits of low-skilled immigration

Arbeitspapier

Low-skilled immigrants indirectly affect public finances through their effect on native wages & labor supply. We operationalize this indirect fiscal effect in various models of immigration and the labor market. We derive closed-form expressions for this effect in terms of estimable statistics. Empirical quantifications for the U.S. reveal that the indirect fiscal benefit of one low-skilled immigrant lies between $770 and $2,100 annually. The indirect fiscal benefit may outweigh the negative direct fiscal effect that has previously been documented. This challenges the perception of low-skilled immigration as a fiscal burden.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 281

Classification and Topics

• Classification: Wirtschaft ; Taxation, Subsidies, and Revenue: General ; Wage Level and Structure; Wage Differentials ; Job, Occupational, and Intergenerational Mobility; Promotion ; Mobility, Unemployment, and Vacancies: Public Policy
• Subject: Immigration ; Fiscal Impact ; General Equilibrium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Colas, Mark ; Sachs, Dominik
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition
• (where): München und Berlin
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/233504
• Last update: 10.03.2025, 11:41 AM CET