Fiscal implications of immigration - A net present value calculation

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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 average 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.

Original languageEnglish (US)
Pages (from-to)487-506
Number of pages20
JournalScandinavian Journal of Economics
Issue number3
StatePublished - 2003
Externally publishedYes


  • Fiscal policy
  • Immigration
  • Taxation


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