Last month, the Department of Health and Human Services released a new report looking at the fiscal impact that refugees and asylees had on the American economy. Specifically, they looked at how tax revenue generated by Asylees and Refugees compared to federal and local spending on refugees and asylees.
Essentially, this report asked whether or not the tax contributions of refugees and asylees paid for the public services these people accessed.
In total, the Department of Health and Human Services found that over a 15-year period, government expenditures on refugees and asylees totalled $457.2 billion, compared to $581 billion in tax revenue generated by refugees and asylees. This means that refugees and asylees had a positive fiscal impact on the federal budget of $123.8 billion over this 15-year period.
When looking at refugees, asylees, and their immediate families, there still exists a total net positive fiscal impact, though it is much smaller. This is because when accounting for immediate families, the federal government experiences a net fiscal benefit of $37.5 billion while local governments experience a net fiscal loss of $21.4 billion. Local governments bear a disproportionately high amount of the costs associated with refugees and asylees since they fund public K-12 schools refugee children are educated in.
Overall, this report shows that welcoming refugees and asylees is not just a humanitarian service, it also helps U.S. fiscal solvency.
One of the limitations of this study is that it only looks at the financial impacts that refugees and asylees have on public budgets. It does not address the social impacts refugees and asylees have on the communities they become a part of, or the economic impact of these refugees on the broader community.
One study from 2016 looked at the spillover effects that refugee camps in Rwanda had on their neighboring communities. These researchers found that as a result of the aid that refugees received, real wages increased in nearby communities.
While refugees and asylees in the United States are clearly living in a different context, it is encouraging to know that in some areas, the presence of displaced people can directly benefit the communities that they become a part of.
It would be valuable for researchers to explore some of these questions in the context of the United States. Understanding what the spillover effects of accepting refugees are, and if they vary in any ways, could help maximize what appears to already be a beneficial program from a financial perspective.
Additionally, more research could identify inefficiencies that hinder refugees and asylees in the United States. For example, one paper from 2017 found that despite the fact that refugees and asylees provide net fiscal benefits in the long run, they were much poorer and had much lower employment compared to native residents when they first entered the country. This means that in the short run, they likely rely more heavily on social services.
It is impractical to expect refugees and asylees to immediately find their footing after moving to the United States, but if something could be done to make that transition smoother, then we might expect them to have an even greater positive fiscal impact.
This research highlights the fact that refugees and asylees can provide financial value to the public sectors of communities they enter. While we still don’t understand the total impacts these people have, this study at least gives us a valuable piece of the puzzle.