A More Equitable Distribution of the Positive Fiscal Benefits of Immigration

By  Wendy Edelberg and Tara Watson 

This policy proposal is a proposal from the author(s). As emphasized in The Hamilton Project’s original strategy paper, the Project was designed in part to provide a forum for leading thinkers across the nation to put forward innovative and potentially important economic policy ideas that share the Project’s broad goals of promoting economic growth, broad-based participation in growth, and economic security. The author(s) are invited to express their own ideas in policy proposals , whether or not the Project’s staff or advisory council agrees with the specific proposals. This policy proposal is offered in that spirit.  

  Immigration is good for the US economy and for the fiscal picture at the federal level, but some local areas experience adverse fiscal impacts when new immigrants arrive. Edelberg and Watson propose a transparent system for redistributing resources from the federal government to these localities. Local areas would receive $2,500 annually for each adult immigrant who arrived to the US within the past five years without a college degree—those more likely to generate negative fiscal flows at the subnational level. The funds would take the form of unrestricted transfers to local educational agencies through the existing Impact Aid program and to Federally Qualified Health Centers. This support would help to offset educational, health, and other costs to local areas associated with immigrant inflows, and more equitably share the overall fiscal and economic benefits of immigration.   

Washington, DC: The Brookings Institution and The Hamilton Project , 2022.   26p.