The fiscal effects of immigration on local governments: Revisiting the Mariel Boatlift

Abstract

Immigration raises important political and economic questions, yet there remains considerable disagreement about its short- and long-term consequences. This paper examines the fiscal consequences of immigration for local governments. Previous work has highlighted the gap between the long-term economic benefits of immigration and the short-term fiscal burden posed by recent arrivals, however several influential estimates based on cash-flow accounting suffer from potential bias. I use a quasi-experimental approach to re-examine a famous case: the large wave of Cuban refugees that landed in Miami in 1980, otherwise known as the Mariel Boatlift. Using a synthetic control design, I find that per-pupil education costs increased in Miami in the aftermath of the Boatlift, financed by an increase in state transfers. These effects persisted for at least ten years. The results shed light on the heterogeneous impacts of immigration over time and space.