The astonishing fiscal effects of high-skilled immigration | “Each additional high-skilled immigrant added $39,489 to the federal government’s coffers in 2023 — and will contribute even more in subsequent years as their wages climb”

> The evidence is clear that high-skilled immigration is a free lunch. It costs the government nothing.

> Actually, less than nothing — high-skilled immigration makes money for U.S. taxpayers.

> How much money? To start with a conservative estimate, we look at the near-term, direct fiscal impacts of H-1B workers. (H-1Bs are temporary work visas for skilled workers, assigned by lottery. Any well-targeted reform of high-skilled immigration, one that prioritizes higher earners and significantly expands available visas, will bring in new arrivals whose average pay is similar to that of H-1B participants, which is why this benchmark is useful.)

> In 2023, the average H-1B holder earned $130,000,1 double the average personal income for all U.S. workers.2 We estimate that each of these H-1B holders pays $32,156 in taxes on average, with their employers paying $10,785.3

> Government spending on these immigrants — for transportation, healthcare, energy, and other such items — amounts to $3,452 each.

> The result: Each additional high-skilled immigrant added $39,489 to the federal government’s coffers in 2023 — and will contribute even more in subsequent years as their wages climb. (Nominal wages all throughout the economy tend to rise over time, and this trend certainly applies to high-skilled immigrants’ wages as well.)

> When we include the effects of their families, the gains are even bigger. Children are a net cost to the U.S. taxpayer because of education costs, but many foreign-born spouses of H-1B holders also work and pay taxes. Combining the effects of the H-1B holders, their spouses, and their children, we estimate that the average effect of H-1B holder households is a net increase of $40,058 in federal government revenues per household. (The fiscal benefits would be even bigger if more spouses of H-1B holders were allowed to work. Many are not.)

> This estimate implies that an extra 100,000 high-skilled immigrant visas per year, each held for 6 years on average, would generate a total of $225 billion in net revenues over a 10-year budget window.4

> Adding 500,000 high-skilled immigrant visas per year would yield a taxpayer benefit of roughly $1.1 trillion dollars.

!ping IMMIGRATION