Working Paper: CEPR ID: DP18054
Authors: Anna Maria Mayda; Mine Senses; Walter Steingress
Abstract: This paper studies the causal impact of immigration on the provision of local public goods using U.S. county-level data from 1990 to 2010. We uncover substantial heterogeneity across immigrants with different skills, due mainly to their asymmetric impact on the per capita tax base and local revenues. Absent full insurance through intergovernmental transfers, the changes in per capita revenues are reflected in changes in local public service provision: Per capita public expenditures decrease with the arrival of low skilled immigrants, and increase with high-skilled immigrants. While the two types of immigrants offset each other on average, spatial differences in the share of low- and high-skilled immigrants lead to unequal fiscal effects across U.S. counties. We find the estimated impact to differ across various public services, and for second-generation immigrants.
Keywords: immigration; welfare state; tax revenues; public expenditures; fiscal effects
JEL Codes: F22; H41; H7; J61; J68; R5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| low-skilled immigrants (K37) | per capita public expenditures (H59) |
| high-skilled immigrants (J61) | per capita public expenditures (H59) |
| low-skilled immigrants (K37) | local tax revenues (H71) |
| high-skilled immigrants (J61) | local tax revenues (H71) |
| low-skilled immigrants (K37) | public service provision (H40) |
| high-skilled immigrants (J61) | public service provision (H40) |
| low-skilled immigrants + high-skilled immigrants (K37) | net change in public expenditures (H59) |
| immigrant skill composition (J61) | heterogeneous fiscal outcomes (H39) |