Economist Illustrates Immigrants' Fiscal Impact: From $400,000 Positive for STEM PhDs to $100,000 Negative for Salvadorans

Economist Stan Veuger recently provided a "simple example" on social media illustrating the varied fiscal impact of different immigrant groups in the United States. In a tweet, Veuger highlighted how economic contributions and costs can differ significantly based on factors such as education and country of origin. He stated: > "Here is a simple example for fiscal impact. Say all STEM PhD immigrants have a positive FI of $400K, Indian immigrants have an average FI of $200K, which is also the FI of all immigrants with a BA, and Salvadorans have an average FI of negative $100K."

This illustration underscores a key aspect of the broader discussion on immigration's economic effects, where fiscal impact refers to the difference between taxes paid by immigrants and the government services they utilize. Research consistently indicates that the fiscal contributions of immigrants vary widely, with highly skilled individuals generally showing a net positive impact, while those with lower education levels may present a net fiscal cost, particularly in the short term. The National Academies of Sciences, Engineering, and Medicine's 2017 report is a foundational study in this area.

Veuger's examples suggest that immigrants with advanced degrees in STEM fields contribute substantially more than they consume in public services, with a hypothetical positive fiscal impact of $400,000. Similarly, Indian immigrants, often highly educated, and all immigrants holding a Bachelor of Arts degree, are presented with an average positive fiscal impact of $200,000. Conversely, Salvadoran immigrants are used to illustrate a potential negative fiscal impact, estimated at $100,000.

These illustrative figures align with findings from various economic analyses, including a 2025 update from the American Enterprise Institute (AEI) which notes that high-skilled immigrants drive an overall positive fiscal impact. The AEI report highlights that factors like education level, age at arrival, and family size significantly influence an immigrant's fiscal contribution. Methodologies vary between research institutions, with some, like the Cato Institute, finding positive fiscal impacts even for less-educated immigrants under certain long-term assumptions.

Further complicating the picture, the fiscal impact can differ between federal and state/local government levels. Immigrants often contribute more in federal taxes than they consume in federal benefits, leading to a net positive federal impact. However, state and local governments may face short-term fiscal challenges due to providing services like public education to immigrant families, as noted by researchers at the Brookings Institution. This disparity often leads to calls for better federal support for local communities.