CHAPTER 8
IMMIGRATION AND ILLEGAL ALIENS ARE MORE
A BLESSING THAN A BURDEN

ARCHIVES OF RUDOLPH W. GIULIANI,
KENNEDY SCHOOL OF GOVERNMENT,
CAMBRIDGE, MASSACHUSETTS, THURSDAY,
OCTOBER 10, 1996

… I'm pleased to be with you this evening to talk about the anti-immigrant movement in America.… And why I believe this movement endangers the single most important reason for American greatness, namely, the renewal, reformation and reawakening that's provided by the continuous flow of immigrants who are seeking to create better lives for themselves and their families … and who succeed in doing so.

… I believe the anti-immigration movement in America is one of our most serious public problems. And Washington is only making the problem worse. The anti-immigration movement can be seen in legislation passed by Congress and the President. It can be seen in the negative attitudes being expressed by many of the politicians in America today.… And it can be seen in a growing sense of unease in the American workforce that somehow there aren't enough jobs to go around.

But the immigration issue is not being discussed in places where it really should be most visible. For example, immigration was not mentioned in last Sunday's Presidential debate. And that's unfortunate.… America needs an open and frank discussion about immigration. This critical issue should be decided in public debate, not behind closed doors in Washington.

I am speaking out because I believe that a threat to immigration can be a threat to the future of our country. Just as they did in years past, immigrants today revitalize and reinvigorate the culture and economy of our cities and states. But history also shows that America goes through periods—like the one we're in today—where people become fearful of immigration.

In 1923, an anti-immigration song was published in New York called "Close the Gates!" The lyrics went like this:

Close the gates of our nation,

Lock them firm and strong!

Before this mob from Europe,

Shall drag our colors down.

Unfortunately, this kind of fear mongering often works. One year later, in 1924, Congress passed new immigration quotas, severely restricting the flow of new arrivals, especially from Italy, Greece, and eastern Europe. Immigration from China and Japan was effectively banned altogether. Commenting on the 1924 quota law, the New York Times said, "America the melting pot comes to an end."

Today, about 100 million Americans are descended from the immigrants who passed through Ellis Island between 1892 and 1954. And millions more are descended from the immigrants who disembarked in Boston, beginning with the Puritans in 1630. Between 1880 and 1930, over 500,000 Italians entered America through Boston. Between 1830 and 1930, over 700,000 Irish arrived in Boston.

A member of my staff, Clark Whelton, has special reason to be grateful to Boston's historic role as a haven for new Americans. In 1848, his great-grandparents escaped the potato famine in Ireland and found new homes in Boston. Although they worked hard, they never had much money. But their only son, Daniel A. Whelton, became Mayor of Boston in 1905.

That's the magic of immigration.… That's the magic of America. That same magic has worked for many of us.

My grandfather, Rodolfo Giuliani, arrived in New York City without much money in his pocket, but with a dream in his heart. And his dream of freedom and success became my dream. His dream of opportunity and achievement was shared by millions of immigrants from every part of the world. Their dreams transformed New York City, and Boston, and Los Angeles. Their dreams became the American dream.

Each one of us owes so much to immigration. That's why anti-immigration movements eventually die out. In the past we have always returned to the recognition that new Americans are good for our country. We realize that any effort to eliminate immigration or unfairly burden immigrants could destroy the very process that is the key to American success.

America became the most successful nation in history because of our constant process of re-evaluation, reform and revitalization, a process that is driven by immigrants who come here to create better lives for themselves and their children. We are constantly being reinvented, not just by the free flow of ideas but by the free flow of people. This process has really defined the United States. It makes us what we are.

Abraham Lincoln said that Americans are not bound together by a common race, religion, or ethnicity, but by their agreement on a set of principles centered on a strong belief in equality, democracy and opportunity. But sometimes our belief in those principles weakens. Today America is once again going through a period where it doubts that we need new people. In periods like this, fear prevails over optimism. Self-doubt prevails over confidence. Americans begin to think that our country is too crowded. When they see new people, they see problems.

I don't share that pessimism. When I see new people, I see new opportunities. I would like to take you to Kennedy Airport—which in many ways is the Ellis Island of today—and show you people coming to America from many different parts of the world.

In some ways they may look different and speak differently than the millions who came through Ellis Island. But the look in their eyes is the same. You can see in their eyes the same determination. You can see that they are looking for a chance to build new lives in a country that provides freedom and opportunity. And they are exactly what America needs today.

They help our country tremendously. They help us with the work they do; they challenge us with new ideas, and with new perspectives. They remind us how lucky we are, and that America is something special. Basically, new immigrants to America are no different than the old immigrants to America. And the anti-immigration movement now sweeping America is no different than earlier anti-immigration movements.

We need only look back at the "Know-Nothing" movement that swept America in the mid-nineteenth century. The "Know-Nothings" encouraged Americans to fear foreigners and stop immigration. No part of our country was immune from this hysteria. Even Massachusetts—birthplace of the American revolution—was gripped by a fear of foreigners.

In 1855, a young Irish immigrant named Mary Williams and her infant daughter Bridget were charged with the crime of poverty, and forcibly returned to Ireland. Even though she was not a pauper, and had never been a public charge, her passage back to Ireland—which cost $12—was paid by the Commonwealth of Massachusetts. With her on the boat—also against their will—went thirty-five other immigrants. A reporter for the Boston Daily Advertiser called Mary Williams "a victim of know-nothing intolerance."

But it was also in 1855 that one of America's greatest leaders had the courage to stand up and oppose the "Know-Nothings." He was Abraham Lincoln. Lincoln lamented the state of a nation that began with the phrase "all men are created equal."

"When the know-nothings get control," Lincoln wrote, "it will read: all men are created equal, except Negroes, and foreigners, and Catholics. If the Know-Nothings come to power," continued Lincoln, "I should prefer emigrating to some country where they make no pretense of loving liberty—to Russia, for instance, where despotism can be taken pure and without the base alloy of hypocrisy."

Abraham Lincoln was not solely a romantic about the value of immigration, and neither am I. The fact is, immigration makes economic sense. Immigrants work hard. In New York City, foreign-born males are 10% more likely to be employed than native-born males. Foreign-born women are employed at the same rate as native-born women.

In New York City, immigrants own businesses in higher percentages than other Americans. And immigrants in New York City are 10% less likely than native-born Americans to be on public assistance. The fact is, immigrants are achievers. Nationwide, immigrants account for 50% of all professors of engineering. Immigrants account for 21% of all U.S. physicians. Immigrants are net contributors to our economy. They are creators of wealth. They pay their own way.

STATEMENT OF SENATOR EDWARD
M. KENNEDY BEFORE THE 105th CONGRESS,
APRIL 15, 1997

As tax day is here, it is worth considering the contributions of legal immigrants to Uncle Sam.

A new study by the Library of Congress highlights the extraordinary level of Federal taxes paid by legal immigrants. Recent immigrants—including both those who have not yet naturalized and those who have become citizens—paid an estimated $55 billion in Federal income taxes in 1995. Without immigration, the Government would have had $55 billion less to pay for key services or deficit reduction.

We have long known of the major contributions of immigrants in developing innovative technologies, creating jobs for American workers, vitalizing our inner cities, serving in our Armed Forces, and in many other ways. But this report also shows that immigrants pay their way in Federal taxes.

The $55 billion that recent immigrants contributed is almost three times what the Federal Government will spend this year on law enforcement to deal with crime. It is twice what the Federal Government will invest in education. It is nine times the budget of the Environmental Protection Agency.

Often in recent years, Congress has been too quick to engage in immigrant-bashing, or too slow to recognize the immense contributions of immigrants to the Nation's heritage and history. Studies like this help to redress the balance, by demonstrating the continuing important role of immigration in our modern society.

STATEMENT OF SENATOR PATRICK LEAHY,
RANKING MEMBER, SENATE JUDICIARY
COMMITTEE IMMIGRATION SUBCOMMITTEE
HEARING ON "IMMIGRANT CONTRIBUTIONS
TO THE U.S. ARMED FORCES," MAY 26, 1999

… It has become fashionable for Congress over the last several years to use immigrants as scapegoats and blame them for society's problems. So I am pleased when we focus attention on the many ways in which immigrants have contributed to our country and serve our nation.

According to the Cato Institute, immigrants account for more than 20% of all recipients of the Congressional Medal of Honor—the country's highest award for battlefield valor. That is more than 700 immigrants who served this country in time of war and displayed heroism "beyond the call of duty." Many lost their lives or were seriously injured.

Today's witnesses provide further evidence—if evidence is needed—that immigrants share a commitment to defending this nation and are willing, if necessary, to give what Abraham Lincoln called "the last full measure of devotion" in support of America's interests.

As we pay tribute today to our immigrant veterans, we should ask ourselves why we are often so quick to turn our backs on them. Under the immigration "reform" legislation enacted in 1996, Congress passed and the President endorsed a broad expansion of the definition of what makes a legal resident deportable. In the rush to be tough on illegal immigration, the bill also vastly limited relief from deportation and imposed mandatory detention for thousands of permanent residents in deportation proceedings. These harsh new measures have now snared immigrants who spilled their blood for our country. As the INS prepares to deport these American veterans, we have not even been kind enough to thank them for their service with a hearing to listen to their story and consider whether, just possibly, their military service or other life circumstances outweigh the government's interest in deporting them.

Here is the cold and ugly side of our "tough" immigration policies. Here are the human consequences of legislating by thirty-second political ad. Unfortunately the checks and balances of our government have failed these veterans because Congress and this Administration were determined not to be outdone by each other. "Tough" in this case meant blinding the INS to the personal consequences of these people. It meant substituting discretion with a cold rubber stamp that can only say "no."

Just last month, a fifty-two-year-old Vietnam veteran named Gabriel Delgadillo was deported for a crime he committed in 1988. The crime, burglary, was reclassified as a mandatory deportation offense under the 1996 law. Delgadillo left behind a wife and seven children, all U.S. citizens.

Ralph Hesselbach enlisted in the U.S. Army in the summer of 1967, when he was seventeen years old, and fought in active combat in Vietnam. As a scout dog handler with the 33rd Scout Dog Platoon of the 4th Infantry Division, Specialist Hesselbach served as a permanent point man and led scouting missions to uncover mines, trip wires and intercept ambushes. In late 1968, he was severely injured and permanently disabled in an explosion at base camp. He was honorably discharged to medical retirement and was awarded the National Defense Service Medal, the Combat Infantry Badge, the Vietnam Service Medal, the Vietnam Campaign Medal and the Good Conduct Medal. Hesselbach challenged the retroactive application of the 1996 law, but was ordered deported by an immigration judge. His service and sacrifice got him no consideration whatever.

Rafael Ramirez is a thirty-five-year-old New Yorker who emigrated from the Dominican Republic at the age of seven and who, nine years after his honorable discharge from the Army as a sergeant, faced deportation. His offense: in 1990, just months after leaving the Army, he pled guilty to possessing marijuana.

I brought Sergeant Ramirez's case to the attention of INS Commissioner Meissner, and I was pleased that some semblance of justice was eventually achieved. But in too many cases, the INS maintains that the 1996 law stripped it of any discretion to consider whether military service or other life circumstances may outweigh the government's interest in deportation. We need to ensure that every veteran's case is carefully reviewed by an immigration judge empowered to do justice.

Our national policy on deportation of veterans is particularly disgraceful at a time when we are sending tens of thousands of U.S. servicemen and women, including untold numbers of non-naturalized immigrants, into harm's way in the Balkans. Why on earth has Congress asked the INS to devote its limited resources to hunting down immigrants who previously answered this country's call to duty, some of whom were permanently disabled in the course of their service?

A few weeks ago, I introduced the Fairness to Immigrant Veterans Act of 1999, S.871. This bill would restore for veterans the opportunity to go before an immigration judge to present the equities of their case and to have a federal court review any deportation decision. It would also restore for veterans the opportunity to be released from detention and at home with their families while their case is under consideration.

The injustice addressed by this legislation is just one egregious example of how recent immigration "reform" has resulted in the break-up of American families and the deportation of people who have made significant contributions to our country. This Congress needs to address the broader injustices that the prior one-upmanship caused. In the meantime, as Memorial Day approaches, the Senate should take an important step in the right direction by passing the Fairness to Immigrant Veterans Act.

"IMMIGRANTS AND THE U.S. ECONOMY,"
TESTIMONY OF STEPHEN MOORE, SENIOR
FELLOW IN ECONOMICS, CATO INSTITUTE,
BEFORE THE SENATE JUDICIARY COMMITTEE
SUBCOMMITTEE ON IMMIGRATION, APRIL 4, 2001

… [A] consensus seems to have emerged in the Congress that immigrants are—as they have been throughout most of our history—beneficial to our economy and assets to our society in other ways as well. This favorable attitude regarding immigration on Capitol Hill is evidenced by the pro-immigrant legislation that has passed the House and Senate in recent years and the wise rejection of many anti-immigration measures.

This pro-immigration environment that has emerged on Capitol Hill reflects the growing consensus within the economics profession that immigrants are on balance economic assets, not liabilities. To be sure, economists still argue about the size of the benefit of immigration to the U.S. economy, but almost all of the best research indicates that the direction of the impact is on balance positive. There is also lively debate about whether some groups of Americans—the lowest skilled Americans, blacks, earlier arriving immigrants, for example—are adversely impacted by immigration. But even here, I am pleased to report that more and more of the research findings seems to suggest that the extent to which low income Americans are hurt by the presence of immigrants has been exaggerated.

Let us start with the big picture. The past twenty years has been a period of fairly high levels of immigration, particularly in absolute numbers.… Over the past twenty years, the United States has legally admitted roughly fifteen million immigrants and refugees. We now admit almost four new immigrants per year for every 1,000 Americans, which is higher than in the past fifty years, but about half the historical average.… Still, the percentage of Americans that are foreign born has risen from about 6% in the 1970s to almost 10% today.…

At earlier times in our nation's history, as many as 15% of Americans were foreign born. So although our current levels of immigration are by no means unprecedented, it is true, nonetheless, that for the past twenty-five years, the U.S. has been quite generous in immigrant admissions and that we are now in the midst of a new great wave of immigration to these shores not experienced since the great wave of Europeans who arrived through Ellis Island at the turn of the last century.

If immigrants were economically harmful, we would certainly expect to see visible signs of the damage to the economy by now. In fact, twenty years ago, many advocates of a lower level of immigration, or even in some extreme cases, a moratorium on immigration, argued that continued high levels of immigration would lead to such economic problems as:

1. increased unemployment for native-born workers
2. higher poverty rates of native-born Americans
3. lower incomes for American workers
4. increased economic problems for minority workers
5. a huge surge in welfare dependency, and
6. lower overall rates of economic growth.

But it didn't happen. None of these claims have been evidenced in the U.S economy.

Now it is undeniable that when immigrants come to the United States, the labor force competition may very well cause some American-born workers to lose their jobs (in the short term) through displacement; they may cause some wage rates to fall or not rise as fast as they might have otherwise, and some immigrants do take advantage of the welfare system. The relevant policy question is whether we have observed these impacts on an economy-wide level. And here there is little debate. High levels of immigration have corresponded with improvement in each of these areas, not with the problems getting worse. For example:

Unemployment —In the period 1978–82 the U.S. unemployment rate was between 6 and 8%. Today, the U.S. unemployment rate is between 4 and 5%. The U.S. economy has shown a remarkable ability to absorb new workers into the economy—both natives and immigrants—without causing job losses. Between 1980 and 2000 the U.S. became a job creation machine, with some thirty-five million more Americans employed today than twenty years ago. The U.S. has created more new jobs in the past twenty years than all of Japan and Europe combined since 1980. In fact, despite the fact that the U.S. takes in nearly as many immigrants in a year as does all of Japan and Europe combined, it is the U.S.—the nation of immigrants—that now has the lowest unemployment rate in the industrialized world.

Poverty —The poverty rate for Americans has fallen over the past twenty years for all races. The latest poverty rate statistics indicate that poverty is lower than at anytime since the mid 1970s.… A recent study by the Center for Immigration Studies reports that since 1980 the rate of poverty among immigrants has risen. Of course, if the overall level of poverty has fallen during this period, it means that the reduction in poverty for native-born Americans has been all the more impressive. In sum, there is no evidence that immigrants increase poverty among natives, in fact the evidence suggests the opposite effect.

Incomes —Median family income in the U.S. has risen over the period 1981–1998 from $39,000 to $45,800 or by roughly 16%, according to recent Census Bureau data. With inflation properly measured, median family income has risen since 1981 by closer to 25%. Again, wage suppression does not appear to have occurred in this period of high immigration.

Economic Advancement of Minorities —There is still in America far too wide an income gap between the races. But over the past twenty years of high levels of immigration, the income gap has actually shrunk, not widened.… For example, since the early 1980s, the growth of incomes for black families has exceeded the growth for white families. The black unemployment rate has fallen much faster than the white unemployment rate, as has the black poverty rate.

The income gap between blacks and whites and between men and women has narrowed to its lowest level in recorded history. From 1981 to 1998, the black incomes relative to whites shrunk from 60% to 69%—the highest ever recorded. For women, the gap narrowed from 89% to 94%. In sum, we have had record immigration and we have had record economic improvements for blacks.

What can we conclude about the impact of immigration on the U.S. economy since 1980? Over the past twenty years the U.S. economy has experienced a $10 to $15 trillion increase in net wealth, according to the Federal Reserve Board data, the GDP has grown by nearly 80% (after inflation), and the inflation rate has fallen to nearly zero. The National Bureau of Economic Research recently described the past eighteen years as the longest and strongest period of sustained prosperity in the U.S. in this century. If immigrants are somehow a "cost" to the U.S. economy, that cost has been virtually invisible. The experience of the past two decades puts a huge burden on the shoulders of those who contend that immigrants are economically burdensome.

But I believe a stronger case can be made. Immigrants have contributed directly to America's unprecedented economic expansion of the past two decades. Moreover, I believe the demographic evidence suggests that it will be in America's self-interest to continue admitting immigrants over at least the next twenty years.

In 1998 I completed a study jointly published by the Cato Institute on the economic and fiscal impact of immigrants to the United States. The study was entitled "A Fiscal Portrait of the Newest Americans." … [A]llow me to now relate to you the major conclusions based on our own research findings and corroborated by several dozen prestigious economic studies published in major economic journals.

1. Immigrants and their children increase economic growth. In the most comprehensive study ever conducted on immigration, the National Research Council of the National Academy of Sciences found that immigrants inflate the incomes of U.S.-born workers by at least $10 billion each year. This estimate is highly conservative because it does not include the impact of immigrant-owned businesses or the impact of high-skilled immigrants on overall productivity. Still, the NRC estimates that the typical immigrant and his or her children pay an estimated $80,000 more in taxes than they will receive in local, state and federal benefits over their lifetimes.
2. Immigrants pay their own way when it comes to services used and taxes paid. Immigrants use many government services—particularly at the state and local levels—but they … also pay a lot in taxes. Conservatively estimated, in 1998 immigrant households paid an estimated $133 billion in direct taxes to federal, state and local governments. Adding the tax receipts paid by immigrant businesses brings the total annual tax contributions of immigrants to about $162 billion for 1998. In any given year, immigrants may use more in services than they pay in taxes, but over their lifetimes, immigrants are a fiscal bargain to native taxpayers. As their earnings rise over time, immigrant taxes exceed the benefits received.…
3. Not all immigrants make the same tax payments or impose the same costs. The best predictors of immigrant success and thus their tax payments are their skill levels, education attainment, and ability to speak English. In general, low-skilled, low-educated immigrants and non-English speaking immigrants use more government services and pay less in taxes than those with high skills.
4. Immigrants have a rapid rate of economic assimilation after they arrive in the U.S. As noted above, one of the most important economic characteristics of immigrants is that their earnings rise over time in the U.S. Hence, during their first years after arrival in the U.S. earnings are low and immigrants typically are net drains on the public coffers. But over time—usually after ten–fifteen years in the U.S—they turn into net contributors. This economic assimilation pattern varies by ethnicity and country of origin, but is still evident today as it was thirteen years ago when researchers first began to study the rate of economic success by immigrants over time.…
5. The age profile of immigrants is a huge demographic bonus to native-born Americans. Most immigrants arrive in the United States in the prime of their working years. For example, more than 70% of immigrants who come to the U.S. are above the age of eighteen upon arrival. This means that there are roughly 17.5 million immigrants in the U.S. today whose educational and rearing costs were borne by the citizens of the sending country, not American taxpayers.… The total discounted present value windfall to the United States of obtaining this human capital at no expense to American taxpayers is roughly $1.43 trillion. Immigration can be thought of as an enormous $1.4 trillion transfer of wealth from the rest of the world to the United States.
6. Immigrants are huge net contributors to the Social Security and Medicare programs. Only 3% of immigrants enter the U.S. over the age of sixty-five, whereas 12% of Americans are over sixty-five—and that percentage will grow to 15% within twenty years. Based on the calculations of the actuaries at the Social Security Administration, this study estimates the total value to the Social Security system from current levels of immigration. I find that the total net benefit (taxes paid over benefits received) to the Social Security system in 1998 dollars from continuing current levels of immigration is nearly $500 billion from 1998–2022 and nearly $2.0 trillion through 2072. Continuing immigration is an essential component to solving the long term financing problem of the Social Security system.
7. Immigrant entrepreneurs are a major source of new jobs and vitality in the American economy. Most immigrant businesses—like most businesses started by American-born entrepreneurs—are not highly successful or large employers. But many of America's largest and most profitable businesses today were started by immigrants. Immigrants who entered the U.S. as refugees, economic immigrants, or family-sponsored immigrants are now at the helm of some of the nation's leading and rapidly growing technology businesses: Hungarian-born Andrew S. Grove, recently retired as Chairman and CEO of Intel; Algerian-born Eric Benhamou, heads 3Com Corp; Iranian-born brothers Farzad and Farid Dibachi founded and head Diba, Inc.; and Uganda-born Ajay Shah, is the chief executive of Smart Modules Technologies.… Ten highly successful immigrant firms … alone generated $28 billion in revenues and employed 75,000 American workers in 1997. The tax revenue paid in 1997 by the companies directly and their employees was at least $3 billion.

Immigration and the Demographic Crisis in Developed Nations —One of the greatest unheralded economic challenges facing the industrialized nations is the demographic bubble due to unprecedented low birth rates. Economists are just starting to confront the huge economic challenge that the population implosion represents to the developed nations of the world. The birth rates in nations like Japan, Germany, France, Spain, and Italy are well below replacement level fertility. The U.S. is just slightly below replacement level fertility, but we have a demographic safety valve: immigration.

Consider, for example, the level of unfounded liabilities in pension programs around the world. As bad as our Social Security liability problem is, it is dwarfed by the huge levels of red ink in the European nations. Immigration will allow the U.S. to smooth out the bumps in our demographic wave in productive ways that most of our competitor nations will not or cannot allow. Our immigrant heritage allows us to bring in productive immigrant workers, who will help pay the cost of the retirement benefits of everyone sitting in this hearing room.

Policy Conclusions —The U.S. legal immigration system works remarkably well, given that it has been crafted in a piecemeal way over many years. Most immigrants who come to the U.S. today are economic contributors on net. The system of family and employer sponsored immigration is effective in getting high quality immigrants to come to the U.S. and absorbing them rapidly into the labor force and the culture. Immigrant workers have brought a flexibility and a work ethic to the U.S. labor market that is sorely absent in many of our major competitor nations.

It is noteworthy that it was not so many years ago that anti-immigration groups would point glowingly to Japan as an example of a nation that prospers without immigration. Japan is now entering its second decade of depression. Part of the problem in Japan has been economic policy mistakes. But some of its economic maladies are a result of low birth rates.… Also, the aging of the workforce in Japan is a horrendous demographic crisis in that nation. The absence of immigrants in Japan has already come to haunt this once formidable economic powerhouse.

It would be economically advantageous to the U.S. to admit more—perhaps twice as many—highly skilled immigrants each year. This is not to say that low skilled immigrants are undesirable. But the economic benefits to natives of immigrants with high skill and education levels is higher than of immigrants with low skill and education levels. It is also true that younger working age immigrants are more beneficial than older immigrants.

It is worth emphasizing that many of the immigrants who have made the largest contributions in our society in recent times came to the U.S. without the characteristics that often presage success. The initial starting place of an immigrant is not always predictive of future success on these shores. Andrew Grove, co-founder of Intel, came to America as a refugee and from a family that had no money, no skills, and no special prospects for greatness. No economist would have likely predicted the greatness he achieved. Social scientists have begun to try to build profiles of immigrant success—by examining skill levels, education, ethnicity, and so on. Such studies are not always very predictive of economic success in the U.S.

It is in America's economic self-interest—and in the interests of immigrants themselves—that we keep the golden gates open to newcomers from every region of the world. The net gains to U.S. workers and retirees are in the trillions of dollars. Given the coming retirement of some seventy-five million baby boomers, we need the young and energetic immigrants now more than ever before.

"U.S. IMMIGRATION AT THE BEGINNING OF
THE TWENTY-FIRST CENTURY," TESTIMONY
PREPARED FOR THE SUBCOMMITTEE ON
IMMIGRATION AND CLAIMS HEARING ON
"THE U.S. POPULATION AND IMMIGRATION,"
COMMITTEE ON THE JUDICIARY, U.S. HOUSE
OF REPRESENTATIVES, AUGUST 2, 2001, BY
JEFFREY S. PASSEL AND MICHAEL FIX,
IMMIGRATION STUDIES PROGRAM, URBAN
INSTITUTE, WASHINGTON, D.C.

… In the past decade, a number of studies have been attempted to address the question of fiscal impacts [of immigration]. Several conclusions have emerged upon which there appears to be fairly widespread agreement. First, immigrants (and immigrant households) pay a considerable amount in taxes to all levels of government. However, because immigrant incomes are generally lower than native incomes when considered on a cross-sectional basis, the taxes from immigrants on a per capita or per household basis are lower than for natives. Similarly, the net balance of taxes and social spending directed toward families is more positive for native families than for immigrant families. This result derives principally from three factors: the previously-mentioned income differences; the biggest cost associated with immigrant families in general is the cost of educating children; and immigrant families have more children than native families.

The National Academy of Sciences (1997) attempted the most extensive study of this issue to date. In their study, the Academy attempted to model costs and taxes on a longitudinal basis and take into account the future generations derived from immigrants. Their main conclusion was that, on average, an additional immigrant generated a positive net contribution to the country. This varied considerably according to a number of factors. In general, the younger the immigrant, the greater the net contribution because younger immigrants have longer working times in the U.S. when they pay taxes. The more highly educated the immigrant the greater the net contribution. Again, this result is related to income. More highly educated immigrants tend to have higher incomes and pay higher taxes.

The balance of taxes versus costs tends to favor the federal government. More taxes are directed to the federal government than to state and local governments. On the other hand, the highest "costs" associated with immigrants tend to be for educating children and most of these costs are incurred by state and local governments. This particular result points out some of the major problems with these analyses. Most of the costs of educating immigrant children are spent on natives (the U.S.-born children). Yet, the research shows clearly the payoffs to education. Moreover, since this is the most critical factor for the integration of immigrants and their offspring, it is the most critical for the long-term health of the U.S. economy.…