The Indirect Fiscal Benefits of Low-Skilled Immigration

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Continuing resourcePublication details: American Economic Journal: Economic Policy; 2024Description: 515-550ISSN:

1945-7731

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Summary: Low-skilled immigrants indirectly affect public finances through their effect on resident wages and labor supply. We operationalize this indirect fiscal effect in a model of immigration and the labor market. We derive closed-form expressions for this effect in terms of estimable statistics. An empirical quantification for the United States reveals an indirect fiscal benefit for one average low-skilled immigrant of roughly

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Item type	Current library	Vol info	Status	Barcode
Article Index	Dr VKRV Rao Library	Vol. 16, No. 2	Not for loan	AI92

Low-skilled immigrants indirectly affect public finances through their effect on resident wages and labor supply. We operationalize this indirect fiscal effect in a model of immigration and the labor market. We derive closed-form expressions for this effect in terms of estimable statistics. An empirical quantification for the United States reveals an indirect fiscal benefit for one average low-skilled immigrant of roughly 50 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.

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