and future earnings of domestic workers (discussed in Chapter 5) to determine whether they will be net economic contributors to society.

Second, because our system of public finance is a federal system and new immigrants tend to concentrate in particular regions of the country, they may create taxpayer inequities. Regions that receive a high concentration of new immigrants may bear relatively higher fiscal burdens in the short run if new immigrants contribute less in revenues—inclusive of federal and, for local governments, state aid—than they receive in additional public services. If so, residents in these regions shoulder a disproportionate share of the nation's annual fiscal burden of immigration. Apart from these tax inequities for native residents, a disproportionate allocation of immigration's fiscal burdens may also induce an inefficient allocation of labor. Facing relatively high tax burdens because of concentrated immigration, workers may leave productive employment in the fiscally disadvantaged region for less productive jobs elsewhere.

Third, although estimates of the annual fiscal impacts are important for understanding the economic consequences of immigration for the current year, estimates of how an immigrant family consumes public services and pays taxes over time are also important in order to know the full consequences of admitting additional immigrants into the United States. Almost no family stays just one-year. On one hand, new immigrants, even those receiving a net fiscal transfer from residents in the annual accounting (those with children in school, for example), may ultimately be net contributors to the public-sector over their lifetimes, as they pass into years of productive labor force participation. In the dynamic fiscal accounting, native residents will then be net fiscal beneficiaries. On the other hand, new immigrants who help solve our "annual" funding problem for Social Security and Medicare by increasing the population of payroll taxpayers (young adults, for example), are likely to become recipients of those programs later in life. In that case, an annual fiscal gain for native residents may eventually become a long-run fiscal burden. Furthermore, the long-run burdens or contributions of new immigrants can be reallocated among native residents through the choice of tax and debt policies. Today's burdens can be shifted onto future native residents (and immigrants) through increased government borrowing. Only a dynamic fiscal accounting can reveal these redistributions of fiscal burdens or benefits across generations and the true long-run consequences on native residents of new immigration. Finally, only dynamic fiscal accounting allows us to calculate the effects of new immigrants on the long-run economic sustainability of current fiscal policies.

Both annual and dynamic estimates of the fiscal effects of immigration will require decisions along five dimensions. The first four decisions must be made for both annual and dynamic accounting, the fifth for dynamic accounting only.

First, what is the appropriate demographic unit of analysis? The choice will depend on whether the study seeks to provide static or dynamic estimates of fiscal burdens. Since the household is the primary unit through which public services