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The Effect of Immigration on Local Public Finances

Author

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  • Jeff Chan

    (Wilfrid Laurier University)

Abstract

I investigate the relationship between immigration and local public finances, exploiting variation in immigration inflows across local labour markets and data on local government revenues and expenditures. I find that increases in immigration did not result in any change to local government revenues. This is not explained by offsetting decreases in revenues from local sourcs and increases from state-level intergovernmental transfers. Finally, I demonstrate that the lack of impact on revenues similarly implies that immigration does not have an effect on local public expenditures. The findings suggest that immigration does not act as a drain on local public finances.

Suggested Citation

  • Jeff Chan, 2019. "The Effect of Immigration on Local Public Finances," Economics Bulletin, AccessEcon, vol. 39(4), pages 2423-2428.
    • Handle: RePEc:ebl:ecbull:eb-19-00570
    as

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    References listed on IDEAS

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    1. Leo Feler & Mine Z. Senses, 2017. "Trade Shocks and the Provision of Local Public Goods," American Economic Journal: Economic Policy, American Economic Association, vol. 9(4), pages 101-143, November.
    2. Jennifer Hunt, 2017. "The Impact of Immigration on the Educational Attainment of Natives," Journal of Human Resources, University of Wisconsin Press, vol. 52(4), pages 1060-1118.
    3. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    4. Milo Bianchi & Paolo Buonanno & Paolo Pinotti, 2012. "Do Immigrants Cause Crime?," Journal of the European Economic Association, European Economic Association, vol. 10(6), pages 1318-1347, December.
    5. Brian Bell & Francesco Fasani & Stephen Machin, 2013. "Crime and Immigration: Evidence from Large Immigrant Waves," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1278-1290, October.
    6. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    7. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    8. Christopher L. Smith, 2012. "The Impact of Low-Skilled Immigration on the Youth Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 55-89.
    9. repec:dau:papers:123456789/5382 is not listed on IDEAS
    10. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    immigration; local public finances;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • H4 - Public Economics - - Publicly Provided Goods

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