By Adam Ozimek and Sarah Eckhardt
The H-1B visa is the primary pathway for skilled immigrants to come work in the United States.
While much is known about how individuals on those visas affect innovation and the firms they work for, their impact on government finances has received less attention. Existing research on this topic tends to focus on immigrants’ lifetime fiscal contributions. This report, conversely, shows how H-1Bs contribute to the country’s fiscal health during their three- to six-year visa periods. The report builds on our prior work and examines the effect of H-1B visas on government revenues and expenditures at the state, local, and federal levels.
The findings reveal that H-1B households generate substantial positive fiscal balances at every level of government, contributing far more in taxes than they consume in public services. The average H-1B household contributes $30,050 net annually — 2.6 times the $11,530 contribution of a typical U.S. household. At the state and local level, governments see a net average fiscal gain of $5,040 per H-1B household, with H-1B workers generating positive fiscal balances in 49 states. The fiscal benefits of the H-1B program are not exclusive to high-income states. The low-income state of Mississippi, for example, nets $4,600 per H-1B household — a figure that is higher than those of 21 other states.
The report also demonstrates how policy reforms could strengthen these fiscal benefits. Granting work authorization to all H-1B spouses and replacing the current H-1B lottery system with EIG’s proposed wage ranking system would combine to boost the annual federal net fiscal impact to over $65,000 per H-1B household and the average state impact to over $10,500.
By providing new state-by-state estimates of the fiscal impact of H-1B households, this analysis offers a clearer picture of how high-skilled immigration affects public budgets. At a time of heightened deficit concerns and renewed attention to high-skilled immigration policy, these findings provide important evidence for policymakers evaluating the program’s future.
See also our Agglomerations post about this report here.
