A new study from the American Enterprise Institute (AEI) has reignited debate over the fiscal consequences of immigration, finding that even low-skilled immigrants contribute positively to the U.S. economy when considered over the long term. Alan D. Viard, senior fellow emeritus at AEI, discussed the findings with Dan Proft on Chicago’s Morning Answer.
The report examines employment and tax contributions of immigrants, though it does not separate legal from illegal entrants in most of its data. Viard noted that many undocumented workers still pay taxes through payroll systems, often using fraudulent Social Security numbers, while receiving few benefits at the federal level. He acknowledged that state and local governments bear greater costs, particularly for public schooling, but emphasized that Medicaid coverage for undocumented immigrants remains highly limited under federal rules.
The study highlights stark differences based on skill levels. High-skilled immigrants, such as those with graduate degrees, generate significant positive returns to government treasuries—nearly $800,000 over 75 years when factoring in their descendants. In contrast, immigrants without a high school diploma create a net negative fiscal impact of about $200,000 over the same timeframe. Viard pointed out, however, that native-born citizens with similar education levels are even more costly to public coffers, in part because immigrants face restrictions on benefit eligibility during their early years in the United States.
Proft pressed Viard on issues not included in the report, such as the fiscal cost of crime or differences based on country of origin. Viard explained that those factors were not part of the AEI update and said the strongest predictors of long-term fiscal impact remain education and skill level, regardless of region.
Policy implications, Viard suggested, include the need to sustain legal immigration to support the $25 trillion U.S. economy, and potentially the reintroduction of temporary worker programs. While fiscal considerations are only one piece of the broader immigration debate, he argued that blanket claims of immigrants as a drain on public resources are not supported by the data.
The full AEI report, The Fiscal Impact of Immigration: An Update, provides a detailed breakdown of tax contributions and government spending across immigrant groups and underscores the trade-offs policymakers must weigh as the immigration debate continues.