How Does Accounting for Population Change Affect Estimates of the Effect of Immigration Policies on the Federal Budget?

We report estimates from the Penn Wharton Budget Model (PWBM) that exempting employment-based green cards from statutory limits for applicants (and their families) who have earned a doctoral or master’s degree in a STEM field---similar to Section 80303 in H.R. 4521---would reduce federal budget deficits by $129 billion from 2025 to 2034. In contrast, a conventional budget estimate, which would include projected increases in federal spending but not the effect of a larger population on federal tax revenues, shows an increase in federal deficits of $4 billion.