Refugees and Asylees Don’t Pay Their Own Way
By Jason Richwine on March 8, 2024
The Department of Health and Human Services (HHS) recently issued a report claiming that refugees and asylees as a group are net fiscal contributors, meaning they pay more in taxes than they receive in benefits. This claim deserves more than a little skepticism. The U.S. labor market rewards workers for their skills, and the government then redistributes some of the rewards through progressive taxation and spending. Logic dictates — and empirical analysis confirms — that high-skill workers tend to be net contributors, while the less-skilled tend to be net consumers.
Refugees fall toward the lower end of the skill distribution. According to the Annual Survey of Refugees (which does not include asylees), just 11 percent of recent refugees age 25 or older arrived with a bachelor’s degree, and 53 percent arrived without a high school diploma. It’s implausible that a group with such a low average skill level could be making a net contribution — especially considering that, unlike most other immigrants, refugees are immediately eligible for the full panoply of welfare benefits. Asylees would need to have quite a positive fiscal impact to make up for the low skill level of refugees alone.
So where does the report go wrong? Its main problem is that it excludes costs associated with “congestible” public goods, such as police, highways, and parks. The report’s authors argue that the marginal cost of congestion is negligible because refugees and asylees are such a small portion of the national population, but that’s valid only if they are spread evenly throughout the country. Refugees and asylees can certainly be large portions of local populations, and congestion costs in those places add up. Based on prior research from the National Academies of Sciences, Engineering, and Medicine that the authors acknowledge on page 30, assigning refugees and asylees the average per-capita cost of congestible goods likely turns their fiscal impact negative.
https://cis.org/Richwine/Refugees-and-Asylees-Dont-Pay-Their-Own-Way
