pays nearly $370 less in taxes than he imposes in costs, in sharp contrast with the average native, who pays $2,030 more in taxes than he imposes in costs. Immigrants and their children form a relatively young population. Because it is federal government programs that assist the elderly, and there are relatively few elderly immigrants, the average immigrant (including native-born children under 20) has a positive federal balance of taxes and benefit costs of nearly $550. Because state and local governments provide for public education, the balance at this level is -$920.
Calculations of this sort are interesting, but they do not enable us to assess the fiscal impact of an incremental immigrant. To do this, we need to make a forward-looking calculation of the present value of taxes and costs over the lifetime of an immigrant, taking account of the taxes and costs associated with his or her descendants.
Such calculations reveal that the fiscal impact of an immigrant varies widely depending on age at arrival in the United States and on educational attainment. The fiscal impact typically rises with age from birth, peaking between ages 10 and 25 at positive values, and then declining gradually to a trough in the late sixties, at which point the impact is highly negative. This curve is higher, the higher the education of the immigrant. There are many immigrants who impose net fiscal burdens on the native-born, and many others who afford them net fiscal benefits. This diversity must be reviewed alongside estimates of average fiscal impact when formulating immigration policy.
Fiscal impacts are quite different by level of government. At the federal level, they are positive for immigrants in all educational categories from birth until the late twenties. After this, as old age draws nearer, they turn negative. At the state and local level, immigrants of all educational categories have negative impacts from birth until after school-age, and for low-education immigrants the balance never turns positive.
The descendants of immigrants make a considerable positive contribution to the fiscal impact for all education levels of immigrants, and they should be included in the calculation. The substantial costs of educating the children of immigrants are included, so it is important that the eventual social return in the form of taxes also be included. Taxpaying children overlap the life cycles of their immigrant parents and help to pay the public costs they impose as they age.
In all this detail, it is difficult to discern the larger picture. To show the overall implications of these estimates, we derive summary measures by averaging fiscal impacts (NPVs) across all ages, weighting by the actual age distribution of recent immigrants in each education category. Immigrants with less than a high school education have a fiscal impact of -$13,000, immigrants with a high school education have an impact of +$51,000, and those with more than high school have an impact of +$198,000.
In the same way, we can average the NPVs across education for each age at arrival, and in this way summarize the effect on NPVs of the age at arrival of