When I emailed the editors of the National Academy of Sciences report on The Economic and Fiscal Impact of Immigration about Jason Richwine’s criticism, they responded swiftly and scrupulously. Series editor Francine Blau put me in touch with Gretchen Donehower, one of the authors of the section. Donehower sent me the following response. Reprinted with her kind permission.
Hi Bryan,
Thanks for reaching out.
Richwine is correct in that piece that he writes, and we actually exchanged a bunch of emails to verify back in February of this year. The $35k cell (upper left-hand corner of Table 8-12) is the net fiscal impact of someone who comes to the US aged 0-24 whose parents’ average education falls in the <HS category. The average age in that cell comes from the average age of actual persons age 0-24 who have entered the US in the last 5 years (with 2012 being the base year for the calculations done then). All of the other age groups are categorized by the person’s own education. The reason that the 0-24 age group must be treated differently from the other age groups is that the vast majority in that cell have not yet completed their own education. In other words, it wouldn’t make sense to treat a child in 6th grade as a high school drop out, because she hasn’t had the chance to finish high school yet. What to do then? We decided to use the taxes and benefits that accrue to kids by parental education group while they are ages 0-24 but starting at age 25, we predict their future taxes and benefits based on a predicted educational distribution. The prediction is based on educational transmission functions from parent to child in the past (see annex 8.4 for details, it’s on page 488 in my copy). These result in future trajectories of taxes and benefits based on weighted averages of education groups, meant to represent a predicted path for that child.
So, Richwine is right. He is also right that in Table 8-13, the estimated impact of a person exactly age 25 at entry with <HS education has a fiscal impact of -186K and this probably implies that it is negative for age 24 also. However, he is most certainly not right that it is negative for age 5 on average. Those educational transmission functions come from data. I did not make them up. It is more likely that a child of <HS immigrant parents will at least complete HS than that she will not. That’s not an interpretation, that’s just what the data showed. If it hadn’t showed that, the $35k number would have been much lower. So, somewhere between age 0 and age 25 there is an age when the net fiscal impact is probably close to zero. I don’t have that sitting around, but it would be an interesting thing to dig out if the calculations are ever done again.
I hope that helps. The whole idea – predicting a person’s future – is pretty complex and if it wasn’t obvious enough in the write up how I did it I do apologize. If you’d like to talk further, we can keep emailing or set up a phone or zoom sometime.
Thanks,
Gretchen
READER COMMENTS
David Henderson
Nov 19 2020 at 10:36am
Excellent. Check out Gretchen’s link and you’ll see a really cute picture of her dog at the bottom.
Mike Hammock
Nov 19 2020 at 3:35pm
I wasn’t going to click the link, but the enticing possibility of a cute dog got me.
Maybe I should put a pet picture on my professional website…
David Henderson
Nov 19 2020 at 3:41pm
I think it’s a great idea. I’ve known Bob Chitester for over 30 years. And I’ve heard him say at least 5 times that he wears a tie with cute little kids on it in order to make a good first impression.
john hare
Nov 20 2020 at 4:58am
I have mentioned before that I find the open borders argument unpersuasive.
But I also find this negative value argument unpersuasive. I have worked with mostly low education immigrants from more than a dozen countries and they average a higher work ethic and result than low educated natives. The two working for me dropped out of elementary school in Mexico, are in their low 40s, and pay taxes every week. I see the deductions when I sign their checks and they both gross over $60K between their job and investments. I personally know several in similar circumstances. In my local area, immigrants are strongly net positive as far as I can see.
TMC
Nov 21 2020 at 3:27pm
Very likely you have a selection bias there. A person making about $60k is breakeven for himself only. Per worker, the US spends $40,500 at the federal level. You have to earn $145,000 to break even. You are in the top 20% of wage earners.
john hare
Nov 20 2020 at 4:39pm
It occurs to me to ask, are they low skilled, or are they low credentialed?
Comments are closed.