The Fiscal and Economic Impact of Migration and Asylum Seekers on United States Public Finance: A Policy Comparative Analysis

Abstract

This study examines the multifaceted impact of migrants and asylum seekers on United States public finance through comprehensive analysis of fiscal contributions, economic participation, and policy implications during the Trump (2017-2021) and Biden (2021-2024) administrations. Employing a mixed-methods approach combining policy analysis, econometric modeling, and case study examination, we analyze migration trends, labor market integration, and budgetary impacts across federal, state, and local government levels. Using border encounters and immigration court backlogs as proxy measures for unauthorized migration, we document a 19.5% increase in foreign-born population from 41 million (2020) to 49 million (March 2024), with corresponding rise in border encounters from 0.8 million (2017) to 3.2 million (2023). Our findings reveal that migrants fill critical labor market gaps in agriculture, construction, and hospitality sectors, contributing to wage stabilization during tight labor market conditions (job-to-unemployed ratio declining from 2.03 to 1.5). However, this influx generates substantial fiscal pressures on local governments, with New York City projecting $6.98 billion expenditure (FY2023-2025) against only $156 million federal funding. Regression analysis examining sectoral stock price responses to migration patterns (2019-2024) demonstrates positive correlations in agriculture (R² = 0.99, p < 0.001) but mixed results in hospitality and construction sectors. These findings contribute to immigration economics literature by demonstrating the asymmetric distribution of migration benefits (labor market) versus costs (local public services), with implications for federal-state fiscal federalism and immigration policy design.