Fiscal Impacts of the Foreign-Born Population

William A. Kandel
Analyst in Immigration Policy

This report reviews estimates of fiscal impacts to the federal, state, and local governments of the foreign born who reside in the United States. It examines the academic and policy literature on fiscal impacts of two populations: all U.S. foreign born and unauthorized aliens. Computing such fiscal impacts involves numerous methodological and conceptual challenges, and resulting estimates vary considerably according to the assumptions used, including those about the time frame considered, the treatment of U.S.-born children, the unit of analysis used, and which costs and revenues are included.

For the total foreign-born population, the findings of a 1996 analysis commissioned by the National Research Council entitled The New Americans remain authoritative and relevant. The report estimated that each new immigrant at that time, with his or her descendents, would generate an average net fiscal surplus. The authors illustrated how their estimate varied according to foreign-born residents’ age composition and educational attainment. Varied assumptions about education generated substantially different impacts. For instance, immigrants with above-average education generated a considerably larger than average net fiscal surplus; those with belowaverage education levels generated a net fiscal deficit. Reducing the time frame of the analysis to fewer generations changes the average net fiscal surplus into an average net fiscal deficit.

This study and others confirm that the foreign born, like the native born, impose their largest costs on U.S. taxpayers as children, through their consumption of public education, and as the elderly, through their consumption of government-funded public health programs. Yet, the majority of the foreign born come to the United State as young adults, where they pay taxes and contribute to programs like Social Security for most of their working lives. Relatively young ages at arrival for most foreign born helps explain why many fiscal impact studies found that foreignborn residents generated net fiscal surpluses over the long term.

Findings from all of the studies reviewed in this report indicate different impacts at the state and federal levels. Many federal programs such as Social Security and Medicaid are oriented toward assisting the elderly, while many state and local level jurisdictions are responsible for services consumed by younger persons, such as public education and criminal justice administration. Foreign-born residents’ relatively young age distribution thus accentuates the degree to which states and localities incur greater fiscal costs from the foreign born than the federal government. Fiscal impact studies of unauthorized aliens reach less consensus than those of the total foreignborn population. Three national estimates evaluated in a 1995 General Accounting Office (GAO) report varied considerably and left the agency unable to definitively quantify such fiscal impacts. Subsequent state-level studies emphasized fiscal impacts of costly public services: public education, health care, and law enforcement. Many estimated tax and other fiscal contributions.

Studies estimating fiscal impacts for unauthorized aliens are more likely to yield estimated net fiscal deficits than those estimating fiscal impacts for all foreign born, because unauthorized aliens, on average, tend to be younger and less educated. Consequently, they are more likely to use public education for their children and contribute relatively less in tax revenues compared to all foreign born. Given their unauthorized status, they are also less likely themselves to receive public benefits, although their U.S. born children may be more likely to qualify for such benefits. However, deriving more specific conclusions or estimates from studies of unauthorized aliens reviewed in this report remains elusive due to variation in study design and methodology.


Date of Report: October 19, 2011
Number of Pages: 57
Order Number: R42053
Price: $29.95

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Immigration Legislation and Issues in the 112th Congress

Andorra Bruno, Coordinator
Specialist in Immigration Policy

Karma Ester
Information Research Specialist

Margaret Mikyung Lee
Legislative Attorney

Kate M. Manuel
Legislative Attorney

Marc R. Rosenblum
Specialist in Immigration Policy

Ruth Ellen Wasem
Specialist in Immigration Policy

Despite President Obama’s calls for a national conversation on immigration reform, immigration has not been a front-burner issue for the 112th Congress. The 112th Congress, however, has taken legislative action on some measures containing provisions on a range of immigration-related topics. The Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112- 10) includes a provision terminating a special refugee provision known as the Lautenberg amendment. The Department of Homeland Security (DHS) Appropriations Act, 2012 (H.R. 2017), as passed by the House and reported by the Senate Appropriations Committee, contains border security-related provisions on staffing at ports of entry and enforcement activities between ports of entry. The House has passed legislation to reauthorize the H-1C temporary worker category for nurses coming to work in medically underserved areas in the United States (H.R. 1933). It also has passed legislation concerning military service-based immigration benefits (H.R. 398).

In other legislative action, the House Judiciary Committee has reported or ordered reported bills on electronic employment eligibility verification (H.R. 2885), immigrant detention (H.R. 1932), visa security (H.R. 1741), and the diversity visa (H.R. 704). House and Senate committees and subcommittees have held hearings on these and other immigration-related issues.

This report discusses these and other immigration-related issues that have received legislative action or are of significant congressional interest in the 112th Congress. DHS appropriations are addressed in CRS Report R41982, Homeland Security Department: FY2012 Appropriations, and, for the most part, are not covered here.


Date of Report: September 30, 2011
Number of Pages: 23
Order Number: R42036
Price: $29.95

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Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.