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The Fiscal Effects of Economic Immigration on Subnational Government Finance in Poland

Author

Listed:
  • Poniatowicz Marzanna

    (Faculty of Economics and Management, University of Bialystok)

  • Piekutowska Agnieszka

    (Faculty of Economics and Management, University of Bialystok)

Abstract

The aim of the paper is to analyse the effects of economic immigration on subnational government finance (SNG) in Poland. The goal to achieve is to answer the following research question: what are the fiscal effects of immigration on SNG budget revenues and expenditures. To answer this question, logarithmic models were developed. The analysis refers to the years 2007-2016. In this respect, data from Statistics Poland - referring to budget revenues and expenditures of communes, cities of district status, districts and voivodeships - were used. As far as immigration statistics are concerned, data from the Ministry of Family, Labour and Social Policy were used. The results indicate an increase in both revenues and expenditures of SNG as a result of immigration. Such results can be explained inter alia by the nature of migration - research were focused on economic immigration. Results confirm that the level of employment of foreigners is one of the determinants shaping the fiscal effect of immigration. Moreover, the impact of economic immigration on SNG budget revenues and expenditures depends on the structure of this budget. This explains the differentiated results of the analysis of the impact of immigration on SNG in different countries. The positive correlation between immigration and SNG revenues in Poland can be associated with a high share of subnational governments in personal income tax revenues as this tax is one of the main categories of SNG revenues. Furthermore, results show that the impact of immigration on local government budgets in Poland is modest. This confirms the conclusions drawn by other authors (e.g. Auerbach and Oreopoulos), that in the long term, immigration cannot be considered as a potential instrument for resolving fiscal imbalances.

Suggested Citation

  • Poniatowicz Marzanna & Piekutowska Agnieszka, 2019. "The Fiscal Effects of Economic Immigration on Subnational Government Finance in Poland," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 15(1), pages 45-58, March.
    • Handle: RePEc:vrs:finiqu:v:15:y:2019:i:1:p:45-58:n:6
    DOI: 10.2478/fiqf-2019-0005
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    References listed on IDEAS

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    1. Christian Dustmann & Tommaso Frattini & Caroline Halls, 2010. "Assessing the Fiscal Costs and Benefits of A8 Migration to the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 31(1), pages 1-41, March.
    2. Jeff Chan, 2019. "The Effect of Immigration on Local Public Finances," Economics Bulletin, AccessEcon, vol. 39(4), pages 2423-2428.
    3. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    4. Örn B. Bodvarsson & Hendrik Van den Berg, 2013. "The Economics of Immigration," Springer Books, Springer, edition 2, number 978-1-4614-2116-0, September.
    5. Grubel, Herbert & Grady, Patrick, 2012. "Fiscal transfers to immigrants in Canada: responding to critics and a revised estimate," MPRA Paper 37406, University Library of Munich, Germany, revised 06 Mar 2012.
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    More about this item

    Keywords

    economic immigration; subnational government finance; budgets’ revenues and expenditures;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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