fiscal impact of an additional immigrant of a particular type at a particular date. But we must be more precise regarding this "experiment." An immigrant's arrival has fiscal consequences not only from the immigrant directly, but also from her offspring and their descendants, even though they themselves will be native-born. Thus, we must include in the calculation changes in taxes and expenditures associated not only with the immigrant, but also with her descendants. This process relies on the assumptions made about the characteristics of future immigrants and the speed of assimilation. To calculate the future tax and expenditure flows for immigrants, we must estimate the characteristics of new immigrants, as well as the extent to which the differences between immigrants and natives (in, for example, the birth rate, earnings conditional on education, the fraction of those who are eligible for a benefit that actually apply for it) disappear over time through assimilation. It may also depend on assumptions about the extent to which immigrants marry outside their own ethnic groups, to the extent that this is deemed to influence the rate of assimilation.

Indeed, the dynamic-incidence approach should also allow us to compare the impact of a new immigrant of a particular type at a particular date to that of a comparable native birth. This comparison is useful in separating the fiscal impact of immigration into the impact of population growth generally and the impact of growth through immigration.

Kinds of Impacts

The lifetime fiscal effects of an immigrant and his descendants can be divided into two categories: first, the fiscal benefits or costs of adding one more person to the population regardless of immigrant status and, second, the fiscal benefits and costs associated with the special characteristics of immigrants, such as age at arrival, time since arrival, English language ability, and education. We will briefly discuss these two categories of impacts.

Fiscal Impacts Relatively Independent of Immigrant Characteristics

Any increment to the population, holding all else equal, will have fiscal effects. These arise in part because a larger population helps to bear the cost of so-called public goods—those that provide services to all in the population at a cost that does not rise with the size of the population. National defense, expenditures on veterans, and research on health and science all are public goods.1 The cost per capita of providing a given level of services declines as population rises because more taxpayers share the unchanging total costs. Also, a larger popula-

1  

For a discussion of empirical estimates of the "publicness" of various kinds of government expenditures, see Chapter 6.



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