Section 1 considers the impact of immigration on fiscal balance in a static atemporal
setting. Subsection 1.1 discusses immigrant tax payments and use of public services,
breaking down the total effect into components associated with differences in
immigrant and native tax payments and use of public services, with the impact on
sharing of costs of providing public goods and with the effect on the cost of providing
services to natives. There is a discussion of selection and moral hazard issues,
particularly in relation to immigrant benefit recipiency. Subsection 1.2 deals with static
labour market effects, focusing on the relevance of changes in native factor returns
arising from immigration for native tax payments and for the cost of providing public
services. Section 2 widens discussion to a dynamic setting in which immigration affects
steady state sustainability of public finances through its effects on relative population
size of different generations. Section 3 briefly considers the way in which these impacts
may feed through into decisions taken on questions of public policy. Section 4
concludes.