future and make many assumptions. Some people, therefore, may prefer the down-to-earth cross-sectional estimates of the fiscal impact of immigrants in a particular year, which appear to be more straightforward and to involve fewer assumptions. Indeed, almost all published estimates of fiscal impact are of this cross-sectional type. Many of these are limited in scope because they include only a subset of tax payments and benefits received. The estimates in this chapter reflect a broad coverage, including 28 types of transfers (assignable benefits), both in cash and in-kind; public goods; servicing the government debt; and the costs of congestible goods and services. All benefits and taxes included in government budgets are counted in one way or another in our calculations. Our main point in this chapter, however, is to investigate the effects of formulating the conceptual experiment in terms of differing subpopulations.

All the analyses reviewed by Rothman and Espenshade (1992) or Vernez and McCarthy (1996), and the more recent studies of which we are aware, take either the immigrant-only approach or the immigrant household approach. The first is flawed for most purposes because it ignores all U.S.-born descendants of the immigrants and thus underestimates the costs caused by the immigrants. The second approach is flawed because it includes the U.S.-born descendants only while they are young, costly, and reside in their immigrant parents' homes. In this way, the U.S.-born children of immigrants are counted only during the ages in which society is investing heavily in their education, not when they in turn grow up to become taxpayers themselves. This tends to make the estimated fiscal impact be more negative, or less positive.

Our calculations indicate that definition of the study population is critical to the outcome. If limited to immigrants themselves, the overall fiscal impact is $1,400 (taxes paid less costs generated) per immigrant. If limited to immigrants plus their U.S.-born children under the age of 20, corresponding to the immigrant household formulation, the average fiscal impact is about -$600 per immigrant (or -$400 per immigrant and young child). If extended to all descendants of living immigrants, the average fiscal impact is $1,000 expressed per immigrant, or $600 expressed per immigrant and descendants.¹⁰ Therefore, the most widely used method based on the immigrant household is the only one that returns a negative value.

We argue that if the U.S.-born children are to be included in the calculation (and we believe they should be), then they should be included at all ages and not just while they represent heavy costs to society. Therefore, we believe that the calculation inclusive of all concurrent descendants is most appropriate within the category of cross-sectional calculations. However, all cross-sectional calculations give the wrong answer. The longitudinal calculation remains the method of choice.

In the longitudinal formulation, the appropriate demographic specifica-

Front Matter (R1-R14)

1 Introduction (1-12)

2 An Economic Framework for Assessing the Fiscal Impacts of Immigration (13-65)

3 Fiscal Impacts of Immigrant and Native Households: A New Jersey Case Study (66-119)

4 The Fiscal Impacts of Immigrants: A California Case Study (120-182)

5 The Current Fiscal Impact of Immigrants and Their Descendants: Beyond the Immigrant Household (183-205)

6 Immigrants and Natives in General Equilibrium Trade Models (206-238)

7 Labor Market Outcomes of Female Immigrants in the United States (239-288)

8 Historical Background to Current Immigration Issues (289-366)

9 Immigration and Crime in the United States (367-387)

10 The Impact of Recent Immigration on Population Redistribution Within the United States (388-448)

Index (449-458)