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The implication of this diversity is that we must be comprehensive in our examination of program use to obtain an accurate assessment of the fiscal impacts of immigration. We find that the pattern of per capita overall program use at each age is very similar for immigrants and others, with immigrants and their children imposing somewhat higher costs at the young ages, and lower costs above age 50. The cost of benefits used by immigrants and their young children is actually 8 percent less per capita than the costs of benefits used by the rest of the population, in part because their age distributions differ.
On average, immigrants pay considerably lower taxes at each age than do others, and overall they and their native-born children under the age of 20 pay about one-third less than does the rest of the population, again due in part because of their age distribution.
In assessing the long-term fiscal impact of immigrants, it is important to take into account the likely descendants of the immigrants, and the likely educational attainment of these descendants.
The long-term (net present value) fiscal impact of an immigrant varies greatly across different types of immigrants. Some groups of immigrants bring net fiscal benefits to natives, and others impose net fiscal costs. Among other things, these fiscal effects depend heavily on the characteristics of immigrants, including age at arrival in the United States, educational attainment, and time spent in the United States. The net present value typically peaks for ages at arrival of 10 to 25, and then declines to a trough for those arriving in their late sixties. This curve is higher, the higher the education. Under our baseline assumptions, the average fiscal impact (net present value) of an immigrant with less than a high school education is -$13,000, and that for an immigrant with more than a high school education is +$198,000. Similarly, older immigrants impose significant fiscal burdens, and younger immigrants produce fiscal surpluses.
Averaging across these characteristics, immigrants under our baseline scenario have a negative fiscal impact at the state and local level, but a larger, positive impact at the federal level, resulting in an overall positive impact for the United States.
Under most scenarios, the long-run fiscal impact is strongly positive at the federal level, but substantially negative at the state and local level. The federal impact is shared evenly across the population, but these negative state and local impacts are concentrated in the few states that receive most of the immigrants.
The average fiscal impact of immigrants under the baseline assumptions is positive in part because they tend to arrive at young working ages, in part because their descendants are expected to have higher skills and incomes, in part because they pay taxes for some items, such as national defense and interest on the federal debt, for which they do not impose costs, and in part because they will help to pay the public costs of the aging baby-boom generations.