her descendants. It will also vary depending on the education of the immigrant, since this strongly influences earnings and therefore tax payments and the need for public transfers of various kinds. The NPV combines the effect of an immigrant during his own lifetime with the effects of all generations of his descendants born in the United States (children born before coming to the United States are treated as immigrants in their own right, with their own descendants). We consider these two components of the NPV separately for some purposes. We also compare the NPVs of immigrants for various ages at arrival with the NPVs of second and later generations, although in reality the native-born groups can be augmented only at birth, that is, at age zero.

As discussed below, we assign educational categories to children, including infants. There are two ways to do this: (1) according to the ultimate educational attainment of the children, so that the children we show are those who will eventually attain the educational category in which they are plotted or (2) according to the educational attainment of their parents. When the first method is used, the NPV age profiles are smooth with no discontinuities. However, the ultimate educational outcome must be assigned by a complicated procedure, based on the likely family origins of children who eventually attain the educational statuses indicated.22 We instead plot the results of the second method in our figures, a method that results in sharp discontinuities because the children of parents with low education have a good chance of attaining higher education than their parents, and therefore come to have much higher NPVs than their parents, who are assumed to remain in the low-education category for life. Both methods are valid and will give the same result if used appropriately.

Results

Figure 7.10 presents the NPVs by age and by education for immigrants, which are the core results of this project, indicating the total impact of an immigrant on the combined federal, state, and local budgets, now and in the future. In reading these figures, it should be kept in mind that their meaning is very different from that of the figures depicting cross-sectional age profiles. Here, each single point on the curve summarizes the entire future years for an immigrant arriving at the corresponding age. One cannot trace a given immigrant's impact across the life cycle by moving along the curves. Other points on the curve summarize the entire future years for other immigrants.

Panel A shows the total NPV, and Panels B and C show the NPV for the immigrant's own lifetime and for the immigrant's descendants, respectively.

22  

This is done by using intergenerational educational transition matrices to determine the probability distribution of the education of the parents of the children who achieve varying degrees of education.



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