natives when they arrive, so immigrants initially participate less in age-related entitlements.

The annual or cross-sectional estimates of fiscal impacts were done for state and local governments as well as at the federal level. However, it does not make sense to do the longitudinal estimates for individual states or localities, because there is so much mobility from locality to locality and from state to state. Each year, 17 percent of the U.S. population changes residence, 6 percent changes county, and 3 percent changes state. For this reason, it does not make sense to do calculations that are based on the assumption that people remain in the same state over their lifetimes, and that their descendants do the same. When we do these calculations at the national level, we can simply group together all the state and local expenditures. One drawback, however, is that we can easily lose sight of the fact that immigrants and their state and local fiscal impacts are very heavily concentrated in a few states, rather than evenly spread across the nation.

Recall from the introduction that we do not take into account indirect fiscal effects of immigrants arising from any consequences of immigration for the earnings or employment of the existing labor force. This means that we will not consider the possibility that immigrants impose fiscal costs indirectly, by causing native workers to become unemployed or to drop into poverty due to reduced wages. The earlier chapters on the labor market effects of immigration suggested that any such negative effects on native workers are likely to be quite small, and the effects could even be positive. However, the possibility remains that immigration into a particular state may cause some out-migration of workers to other states, resulting in fiscal effects for high-immigration states that we have not taken into account. For the nation as a whole, such effects should average out to zero.

A Word on the Demographic Unit of Account

Many studies of the fiscal impact of immigrants use the immigrant-headed household as the unit of account. Here we use the individual as the unit of account. We do so because it is necessary for longitudinal calculations. If we were to use households, we would have to deal with changing household structure over time through marriage, divorce, widowhood, the departure of growing children, the arrival of additional family members from abroad, death of elderly members, and so on. We would also have to deal with nonimmigrant household members. Using the individual is much simpler in all these respects. Note that our calculations can subsequently be used as the basis of constituting families or households of immigrants when needed for interpreting the results, or for comparing them to results of studies that use the household framework.5


The age profiles reflect the average payments of taxes and receipt of benefits for all immigrants at the age in question. Thus attempts to reconstitute specific family configurations by combining the individual profiles at particular ages will also yield families that were implicitly assumed to pay

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