Mark Colas, Dominik Sachs, 07 October 2020

There is a widespread perception that low-skilled immigration is a fiscal burden for society. This column incorporates indirect fiscal effects of immigration that arise in general equilibrium into various models that have been emphasised in the empirical immigration literature. It finds that the indirect fiscal effect is in fact positive, with one low-skilled immigrant in the US adding between $700 to $2,100 to the public finances through this channel each year.

CEPR Policy Research