The New Americans: Economic, Demographic, and Fiscal Effects of Immigration

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TABLE 7.6 Average Fiscal Impact of an Immigrant (Net Present Value) by Scenario and Level of Government (1996 dollars)

Scenario	State/Local Fiscal Impact	Federal Fiscal Impact	Total Fiscal Impact
Baseline	-$25,000	+$105,000	+$80,000
Alternative scenarios
Budget assumptions
No budget adjustment	-25,000	+10,000	-15,000
Immediate budget adjustment	-25,000	+102,000	+77,000
Budget adjustment by taxes	-25,000	+119,000	+95,000
Budget adjustment by benefits	-25,000	+91,000	+66,000
1996 welfare reform act	-22,000	+110,000	+88,000
1996 welfare reform act and no budget adjustment	-22,000	+15,000	-7,000
Interest rates (percent)
2	-5,000	+223,000	+219,000
4	-27,000	+66,000	+39,000
6	-23,000	+38,000	+15,000
8	-19,000	+27,000	+8,000
Other assumptions
OASDHI = 0 if arrive > 55	-25,000	+110,000	+85,000
No emigration of 2nd generation	-28,000	+118,000	+90,000
Low emigration of 1st generation	-30,000	+136,000	+106,000
Immigrant taxes increase for 10+ years	-8,000	+132,000	+124,000
Lower bilingual education costs	-23,000	+105,000	+83,000
Benefits fixed with respect to natives	-20,000	+103,000	+83,000
Note: First two columns may not total to third due to rounding. OASDHI = Old-age, Survivors, Disability, and Health Insurance.

is positive except for two cases, which are viewed as highly unlikely, and its level ranges widely. A few scenarios merit separate discussion.

Starting Year for Fixing the Debt/GDP Ratio

In the baseline scenario, the budget is adjusted starting in the year 2016. Here we consider two alternative scenarios: fixing the debt/GDP ratio starting immediately (which gives very similar results to fixing it starting in 2016), and not adjusting the budget at all, but rather continuing with the status quo, in which tax payments are assumed to grow at the rate of productivity growth, 1 percent

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