Dominik Sachs, University of Munich.
The Indirect Fiscal Benefits of Low-Skilled Immigration
Abstract
Low-skilled immigrants indirectly affect public finances through their effect on native wages & labor supply. We perationalize 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 production technology and labor supply. 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
and challenges the perception of low-skilled immigration as a fiscal burden.
You can read the research paper here
Dominik Sachs is associate professor of economics at the University of Munich (LMU).
He studies the effects of policies on individual behavior, inequality, government revenue and welfare. My goal is to provide transparent and concrete implications for optimal policy design. For this purpose, he combines theoretical, numerical and empirical methods.