Fiscal Implications of Immigration - a Net Present Value Calculation

20 Pages Posted: 20 Oct 2003

See all articles by Kjetil Storesletten

Kjetil Storesletten

University of Oslo - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: September 9, 2002

Abstract

Focusing on the net fiscal effects, the gain from admitting immigrants is computed for a welfare state with large expenditures and a large tax burden (Sweden). Prices and behavior are held constant, which allows a detailed analysis of the effects of immigration. The present value of future tax revenues minus outlays is potentially large; USD 23,500 per young working-age immigrant, but an new immigrant represents a net government loss of USD 20,500. The dominant factors are employment rates and age. For young working-age immigrants, the "break-even" participation rate for which the gain would be zero is 60%, well below the empirical rate for this group.

Suggested Citation

Storesletten, Kjetil, Fiscal Implications of Immigration - a Net Present Value Calculation (September 9, 2002). Scandinavian Journal of Economics, Vol. 105, pp. 487-506, September 2003, Available at SSRN: https://ssrn.com/abstract=443773

Kjetil Storesletten (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47 2284 4009 (Phone)
+47 2285 5035 (Fax)

HOME PAGE: http://folk.uio.no/kjstore/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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