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Home | Events Archive | The Indirect Fiscal Benefits of Low-Skilled Immigration
Seminar

The Indirect Fiscal Benefits of Low-Skilled Immigration


  • Series
  • Speaker(s)
    Dominik Sachs (University of Munich, Germany)
  • Field
    Organizations and Markets
  • Location
    Online
  • Date and time

    December 07, 2020
    12:00 - 13:00

Low-skilled immigrants indirectly affect public finances through their effect on native

wages & labor supply. We operationalize this general-equilibrium effect in the workhorse labor market model with heterogeneous workers and intensive and extensive labor supply margins. We derive a closed-form expression for this effect in terms of estimable statistics. We extend the analysis to various alternative specifications of the labor market and production that have been emphasized in the immigration literature. Empirical quantifications for the U.S. reveal that the indirect fiscal benefit of one low-skilled immigrant lies between $770 and $2,100 annually. The indirect fiscal benefit may outweigh the negative direct fiscal effect that has previously been documented. This challenges the perception of low-skilled immigration as a fiscal burden.