arriving in the United States in the past few years.24 This provides a convenient summary of the implications of the estimates. This idea is appealing, but it suffers from one complication. Children who arrive have not yet completed their education. For those under 20, we have projected the distribution of their completed educations based on the education of their parents, using our estimated probabilities of the upward educational mobility in later generations.

Immigration policy could be varied in terms of the characteristics of the immigrants admitted, or in terms of the numbers admitted, holding characteristics constant. These two different kinds of policy options are informed by different kinds of calculations of the net fiscal impact. We first consider the effects of varying the characteristics of immigrants, and then compare them with the effects of varying their numbers. Before doing so, let us assume for the moment that the only concern of immigration policy is to maximize the net fiscal surplus that immigrants provide to the native-born. To meet that goal we should accept all prospective immigrants who yield a positive fiscal surplus and reject those who impose a fiscal cost. The last immigrant we admit (the marginal immigrant) would cost as much in benefits received as she paid in taxes. In this case, the average fiscal surplus across all immigrants admitted would be a large positive number, since all of them would yield positive fiscal benefits, many of which would be quite large. Our estimates in this chapter show how net fiscal impacts vary with the characteristics of immigrants, but because our simulations contain no feedbacks through the general economy (as explained in the introduction), they do not reflect diminishing returns to immigrants as a result of their hypothetically increasing numbers, and so could not be used to identify the point at which the net fiscal contribution of an incremental immigrant becomes zero. We can, however, identify those immigrants whose characteristics yield a net fiscal impact of zero in the neighborhood of the current volume of immigration.

With this as background, we begin by considering the differences in average NPV by level of education, as shown in the first row of Table 7.5. We see that the average fiscal impact over the life of the immigrants and his descendants is slightly negative for those with less than a high school education; substantial and positive for those with a high school education, and strongly positive, at nearly $200,000 per immigrant, for those with more than a high school education. If the only policy goal were the maximization of the positive fiscal impact of immigrants, the way to accomplish it would be to admit only those with the highest education.25

24  

That is, we report the weighted average NPV across all age-education combinations, with the relative frequencies of these combinations among recent arrivals supplying the weights.

25  

Given the large amount of net taxes that more highly educated immigrants and their descendants are estimated to pay, one might wonder whether such potential immigrants would continue to select the United States as a destination. Keep in mind, first, that the value of the services that immigrants receive from the government exceeds the costs that we have taken into account because public goods



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