Abstract
Low-skilled immigrants indirectly affect public finances through their effect on resident wages & 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 U.S. reveals an indirect fiscal benefit for one average low-skilled immigrant of roughly $750 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.
| Item Type: | Paper |
|---|---|
| Keywords: | immigration; fiscal impact; general equilibrium |
| Faculties: | Economics > Collaborative Research Center Transregio "Rationality and Competition" |
| Subjects: | 300 Social sciences > 330 Economics |
| JEL Classification: | H20, J31, J61 |
| URN: | urn:nbn:de:bvb:19-epub-93967-5 |
| Language: | English |
| Item ID: | 93967 |
| Date Deposited: | 04. Jan 2023 08:42 |
| Last Modified: | 04. Jan 2023 08:43 |
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