National Academies Press: OpenBook
Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

The New Americans

Economic, Demographic, and Fiscal Effects of Immigration

James P. Smith and Barry Edmonston, Editors

Panel on the Demographic and Economic Impacts of Immigration

Committee on Population and

Committee on National Statistics

Commission on Behavioral and Social Sciences and Education

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C.
1997

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

NATIONAL ACADEMY PRESS
2101 Constitution Ave., N.W. Washington, D.C. 20418

NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine.

This study was supported by Order No. 95-55 between the National Academy of Sciences and the U.S. Commission on Immigration Reform. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project.

Library of Congress Cataloging-in-Publication Data

The new Americans : economic, demographic, and fiscal effects of immigration / Panel on the Demographic and Economic Impacts of Immigration, National Research Council ; James P. Smith and Barry Edmonston, editors.

p. cm.

Includes bibliographical references and index.

ISBN 0-309-06356-6 (cloth)

1. United States—Emigration and immigration—Economic aspects. 2. United States—Emigration and immigration—Government policy. 3. Alien labor—United States. I. Smith, James P. II. Edmonston, Barry. III. National Research Council (U.S.). Panel on the Demographic and Economic Impacts of Immigration.

JV6471.N43 1997

330.973—dc21 97-21182

CIP

Additional copies of this report are available from:

National Academy Press
2101 Constitution Avenue N.W. Washington, D.C. 20418 Call 800-624-6242 or 202-334-3313 (in the Washington Metropolitan Area). This report is also available on line at http://www.nap.edu

Printed in the United States of America

Copyright 1997 by the National Academy of Sciences. All rights reserved.

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

PANEL ON THE DEMOGRAPHIC AND ECONOMIC IMPACTS OF IMMIGRATION

JAMES P. SMITH (Chair),

RAND, Santa Monica, California

ALAN J. AUERBACH,

Department of Economics, University of California, Berkeley

GEORGE J. BORJAS,

John F. Kennedy School of Government, Harvard University

J. THOMAS ESPENSHADE,

Office of Population Research, Princeton University

RICHARD B. FREEMAN,

Department of Economics, Harvard University, and Labor Studies, National Bureau of Economic Research

JOHN F. GEWEKE,

Department of Economics, University of Minnesota

CHARLES HIRSCHMAN,

Department of Sociology, University of Washington

ROBERT P. INMAN,

Department of Finance, Wharton School of Business, University of Pennsylvania

GUILLERMINA JASSO,

Department of Sociology, New York University

RONALD D. LEE,

Departments of Demography and Economics, University of California, Berkeley

MARY C. WATERS,

Department of Sociology, Harvard University

FINIS R. WELCH,

Department of Economics, Texas A&M University

BARRY EDMONSTON, Study Director

KRISTIN McCUE, Research Associate

JOEL A. ROSENQUIST, Senior Project Assistant

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

COMMITTEE ON POPULATION

RONALD D. LEE (Chair),

Departments of Demography and Economics, University of California, Berkeley

CAROLINE H. BLEDSOE,

Department of Anthropology, Northwestern University

JOHN BONGAARTS,

The Population Council, New York

JOHN B. CASTERLINE,

The Population Council, New York

LINDA G. MARTIN,

RAND, Santa Monica, California

JANE MENKEN,

Population Studies Center, University of Pennsylvania

ROBERT A. MOFFITT,

Department of Economics, Johns Hopkins University

MARK R. MONTGOMERY,

The Population Council, New York

W. HENRY MOSLEY,

Department of Population Dynamics, Johns Hopkins University School of Hygiene and Public Health

ALBERTO PALLONI,

Department of Sociology, University of Wisconsin, Madison

JAMES P. SMITH,

RAND, Santa Monica, California

BETH J. SOLDO,

Department of Demography, Georgetown University

MARTA TIENDA,

Population Research Center, University of Chicago

AMY O. TSUI,

Carolina Population Center, University of North Carolina, Chapel Hill

JOHN HAAGA, Director

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

COMMITTEE ON NATIONAL STATISTICS

NORMAN M. BRADBURN (Chair),

National Opinion Research Center, University of Chicago

JULIE DAVANZO,

RAND, Santa Monica, California

QWILLIAM F. EDDY,

Department of Statistics, Carnegie Mellon University

JOHN F. GEWEKE,

Department of Economics, University of Minnesota, Minneapolis

JOEL B. GREENHOUSE,

Department of Statistics, Carnegie Mellon University

ERIC A. HANUSHEK,

W. Allen Wallis Institute of Political Economy and Department of Economics, University of Rochester

RODERICK J.A. LITTLE,

Department of Biostatistics, University of Michigan

CHARLES F. MANSKI,

Department of Economics, University of Wisconsin

WILLIAM D. NORDHAUS,

Department of Economics, Yale University

JANET L. NORWOOD,

The Urban Institute, Washington, D.C.

EDWARD B. PERRIN,

School of Public Health and Community Medicine, University of Washington

PAUL R. ROSENBAUM,

Department of Statistics, Wharton School of Business, University of Pennsylvania

KEITH F. RUST,

Westat, Inc., Rockville, Maryland

FRANCISCO J. SAMANIEGO,

Division of Statistics, University of California, Davis

MIRON L. STRAF, Director

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering.

The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine.

The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

Acknowledgments

This report reflects the efforts of many people. The panel was established under the auspices of the Committee on Population, directed by John Haaga, and the Committee on National Statistics, directed by Miron Straf—both of whom were instrumental in developing the study and provided guidance and support to the staff. At a number of critical times, John Haaga offered useful advice and always found a way to help us meet our obligations in a timely fashion.

The panel gratefully acknowledges the funding received from the U.S. Commission on Immigration Reform. Commission staff, including Susan Forbes Martin, Lindsay Lowell, and David Howell, were helpful to the panel throughout the study.

The panel benefited greatly from a set of papers we commissioned: by Susan Carter and Richard Sutch on long-term population and economic effects of immigration on the United States; by Kevin Murphy and Gary Becker on the role of immigration in economic growth; by John Haaga and Alberto Palloni on immigration and crime; by Edward Funkhouser and Stephen Trejo on the economic effects of immigration on women; by Thomas MaCurdy, Thomas Nechyba, and Jay Bhattacharya on a conceptual framework considering fiscal effects of immigration; and by Daniel Trefler on economic models of immigration and trade. In addition, William Frey and Kao-Lee Liaw prepared a paper that analyzed the effect of immigration on internal migration and state distribution of the U.S. resident population. The National Academy Press expects to publish a volume containing revised versions of some of these papers.

The panel did considerable new research, with the aid of some expert consultants. Peter Brandon prepared fiscal estimates from the Survey on Income and Program Participation. Michael Clune conducted the panel's case study of the

Page viii Cite
Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

fiscal effect of immigration in California. Deborah Garvey worked with panel member Thomas Espenshade on the panel's use of their ongoing study of the fiscal effect of immigration in New Jersey. Tim Miller collaborated with panel member Ron Lee on lifetime estimates of the fiscal effect of immigration. And Michel Vanderhart assisted panel member Finis Welch in estimating price effects of immigration.

I also acknowledge the contribution of Mendelle T. Woodley's superb editing skills in the preparation of the report. Mendy was there from the beginning and helped us translate our thoughts into clear English sentences. Our report also benefited from a final copy editing by Christine McShane, of the National Research Council staff.

No panel with a task as complex and challenging as ours could perform its duties without an excellent, well-managed staff. In particular, the overall report would not have been possible without the dedicated efforts of four staff members. The panel is indebted to Karen Foote, program officer, who handled administrative matters for the first year of the panel's work. We appreciate very much the work of Joel Rosenquist, senior project assistant, who skillfully guided the report through numerous rounds of editing in preparation for publication and ably and cheerfully handled the large number of administrative tasks presented by the panel. Kristin McCue, senior staff officer, made major contributions to the panel's work. Working with the panel's chair, she coordinated much of the work for the study of labor markets and directed the preparation of considerable data analysis for Chapter 5. More than this, she also worked with the study director on revising and reviewing drafts of the report, offering constructive advice on the panel's work and helping to bring the report to publication. Finally, we are indebted to Barry Edmonston, study director, who managed the overall work of the panel, organized and managed a complex set of activities, and helped us to meet our deadlines. Barry worked on all aspects of the project and was always dedicated, responsible, and in good humor.

I close by expressing my appreciation to fellow panel members for their willingness to devote long hours to this project. They worked together well and patiently, a critical element in such a far-reaching project. A number of panel members prepared drafts for the panel's use. Some of their contributions have greatly assisted the preparation of chapters; others appear in the appendices. Although the work was difficult and the requests I made of their time bordered on the unconscionable, all panel members responded in an extremely helpful way. This project has been one of the most intellectually stimulating experiences of my life. The reasons are simple—an important public issue and a group of intelligent, and highly motivated panel members. I am in their debt.

JAMES P. SMITH, CHAIR

PANEL ON THE DEMOGRAPHIC AND ECONOMIC IMPACTS OF IMMIGRATION

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×
Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

3
The Face of the U.S. Population in 2050

 

76

 

 

Background to Population Change

 

78

 

 

A Projection Model

 

81

 

 

National Population Growth

 

93

 

 

Implications of the Size of the Population

 

98

 

 

Age and Sex Composition

 

99

 

 

Immigrants and Their Children

 

110

 

 

Racial and Ethnic Composition

 

113

 

 

Conclusions

 

122

 

 

References

 

123

 

Appendix 3.A: Population Projection Model

 

124

 

Appendix 3.B: Population Projection Assumptions

 

131

 

Appendix 3.C: Sensitivity of Population Projection Results

 

133

4
Immigration's Effects on Jobs and Wages: First Principles

 

135

 

 

First Principles: Labor Market Effects of Immigration

 

136

 

 

Growth and Immigration

 

153

 

 

Conclusions

 

164

 

 

References

 

165

 

Appendix 4.A: Immigration in the Two-Good, Two-Factor Model

 

166

 

Appendix 4.B: Assessing the Labor Market Benefits and Costs of Immigration

 

170

5
Immigration's Effects on Jobs and Wages: Empirical Evidence

 

173

 

 

The Economic Gain to Immigrants

 

174

 

 

Trends in Immigrant Skills

 

181

 

 

Differentials Across National Origins and the Decline in Immigrant Skills

 

185

 

 

Who Are the Immigrants?

 

190

 

 

Economic Assimilation

 

196

 

 

Emigration

 

204

 

 

Trends in Employment

 

205

 

 

Occupations and Jobs

 

209

 

 

Impact of Immigrants on Native Earnings and Employment

 

219

 

 

Immigration and Native Migration

 

228

 

 

Price Effects of Immigration

 

230

 

 

Conclusions

 

235

 

 

References

 

237

 

Appendix 5.A: Observed Wage Growth of Men and Women

 

240

 

Appendix 5.B: Calculation of Shares of Expenditures Attributable to Immigrant Labor

 

251

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
×

6
Do Immigrants Impose A Net Fiscal Burden? Annual Estimates

 

254

 

 

Introduction

 

254

 

 

Estimating the Annual Fiscal Impact of New Immigrants

 

257

 

 

Estimates of the Annual Fiscal Impact of Immigrant-Headed Households

 

270

 

 

Conclusions

 

292

 

 

References

 

294

7
The Future Fiscal Impacts of Current Immigrants

 

297

 

 

Introduction

 

297

 

 

Dynamic Incidence

 

298

 

 

Kinds of Impacts

 

302

 

 

The Heterogeneity of Immigrants and Intra- and Intergenerational Mobility

 

306

 

 

The Age Profiles of Taxes and Benefits

 

308

 

 

Aggregate Cross-Sectional Fiscal Impacts of Immigrants and Their Children

 

316

 

 

Constructing Longitudinal Age Profiles

 

323

 

 

Baseline Results

 

325

 

 

The Average Impact of an Incremental Immigrant

 

331

 

 

Alternative Scenarios

 

336

 

 

The Timing of Fiscal Impacts

 

341

 

 

Interpreting the Results

 

344

 

 

Summary

 

349

 

 

Key Conclusions

 

352

 

 

References

 

354

 

Appendix 7.A: Intergenerational Educational Mobility

 

355

 

Appendix 7.B: Net Present Values for Immigrants and Natives, by Scenario

 

358

 

Appendix 7.C: Discussion of Data Sets for the Study of Fiscal Impacts

 

362

8
The Social Dimensions of Immigration

 

363

 

 

Integration of Immigrants into American Society

 

365

 

 

Effect of Immigrants on American Institutions

 

382

 

 

Attitudes Toward Immigration and Interethnic Relations

 

389

 

 

Immigration and Interethnic Tensions

 

393

 

 

Conclusions

 

395

 

 

References

 

397

 

Appendix 8.A: Analysis of Polling Data

 

402

Biographical Sketches

 

407

Index

 

413

Suggested Citation:"Front Matter." National Research Council. 1997. The New Americans: Economic, Demographic, and Fiscal Effects of Immigration. Washington, DC: The National Academies Press. doi: 10.17226/5779.
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This book sheds light on one of the most controversial issues of the decade. It identifies the economic gains and losses from immigration--for the nation, states, and local areas--and provides a foundation for public discussion and policymaking. Three key questions are explored:

  • What is the influence of immigration on the overall economy, especially national and regional labor markets?
  • What are the overall effects of immigration on federal, state, and local government budgets?
  • What effects will immigration have on the future size and makeup of the nation's population over the next 50 years? The New Americans examines what immigrants gain by coming to the United States and what they contribute to the country, the skills of immigrants and those of native-born Americans, the experiences of immigrant women and other groups, and much more. It offers examples of how to measure the impact of immigration on government revenues and expenditures--estimating one year's fiscal impact in California, New Jersey, and the United States and projecting the long-run fiscal effects on government revenues and expenditures. Also included is background information on immigration policies and practices and data on where immigrants come from, what they do in America, and how they will change the nation's social fabric in the decades to come.
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