TC on less-skilled immigrants not being a fiscal burden

You heard from Alex on that topic recently, here is my contribution in the form of a Bloomberg column:

According to new research from economists at the University of Oregon and the University of St. Gallen in Switzerland, new low-skilled immigrants to the US are a net fiscal plus — each adding an estimated $750 a year to government coffers at the federal, state and local levels. And their contribution to the entire economy is likely larger still.

These new measures do not deny the standard assessments of the potential fiscal costs of immigrants. Rather, they consider an additional positive factor: namely, that low-skilled immigrants enable native workers to move into higher-wage jobs, and in some cases to work more hours. That may occur through a number of channels, some of them highly complex and hard to measure, but most simply recall Adam Smith’s maxim that the division of labor is limited by the extent of the market.

To view this more concretely, consider working parents who would choose more demanding and higher-paying jobs if cheaper and more convenient child care, which typically requires only a high school diploma, were available. If a new immigrant provided that care, those parents would be able to earn more money — and would pay more taxes.

That is an obvious and relatively visible story. A more indirect effect involves businesses. When cheaper labor is available, they may make bigger and more ambitious plans, which also has benefits for government revenue. In any case, the indirect fiscal effects of the immigrants will be more positive than the direct effects.

Recommended, Alex and I agree (and without consultation).