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Immigration's Benefits Outweigh Costs, NRC Study Says

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A comprehensive new report on the costs of immigration has refocused attention on the strains immigrants place on education budgets at the state and local levels.

The report from the National Research Council, one of the most comprehensive to date on the highly political issue, concludes that immigration creates a net gain for the U.S. economy overall.

But in the short run, it says, immigrants are a drain on state and local governments, a drain that flows largely from one source.

"In state and local budgets, education is the dominant factor driving the cost of immigrants," said James P. Smith, the chairman of the 12-member NRC panel that compiled the report and an economist at the RAND Corp. in Santa Monica, Calif.

If current immigration trends hold, the report concludes, immigrants will continue to be among the chief contributors to the growth of the nation's school-age population.

Costs vs. Returns

The study, released May 17, was commissioned by the congressionally appointed U.S. Commission on Immigration Reform, which asked the NRC to examine immigration's effects on the economy and the nation's population.

In the short term, the report says, immigrants generally receive more in services than they pay in taxes because their households tend to have more school-age children than natives do, they tend to be poorer, and they are likely to make less money and have less property. Therefore, they pay less in taxes.

But when looked at over the course of a lifetime, the picture shifts.

Depending on the level of education and the age of immigrants when they enter the country, the study says, the cycle works like this: State and local governments foot the bill early in an immigrant's life.

But as immigrants leave school and become productive workers, they repay most or all of the cost of those services in the form of taxes. However, that payoff does not always go to the same state or town that paid to educate them.

Education is a critical factor in how productive immigrants become as taxpaying adults.

An immigrant with less than a high school education costs the economy about $13,000 over his life span, the study says. But immigrants with more than a high school education produce a net gain of about $198,000.

"Most studies see only the cost of education, they don't see the return," Mr. Smith said. "But I'm not prepared to say that education is the factor that produces the biggest return because we just don't know."

The study examined two states, New Jersey and California, and concluded that immigrants pose a greater burden on states with larger immigrant populations.

In New Jersey, each household headed by a U.S. native pays an estimated $232 a year in state and local taxes to cover services used by immigrant households. In California, which has more immigrant-headed households than any other state, the cost is $1,178. Its immigrants tend to be poorer and less educated.

'Impact Aid'?

The report makes no policy recommendations. It looks at all immigrants and does not distinguish between those who are legal or illegal.

But it may provide new ammunition for states' demands that the federal government provide "impact aid" to offset the costs of education and other services they provide illegal immigrants.

"The general consensus among educators is that children need to be educated. The issue is how we're going to pay for that education and whether or not the federal government should provide some impact aid," said Carlos A. Vega, who works on immigration issues for the National Association of State Boards of Education in Alexandria, Va.

Several states with large immigrant populations have sued the federal government, seeking to recoup the cost of education and other services. While the courts have dismissed most of the suits, California last month appealed its case to the U.S. Supreme Court.


For More Information:

Copies of "The New Americans: Economic, Demographic, and Fiscal Effects of Immigration" are available for $55 each, plus shipping and handling, from the National Academy Press at

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