OLLAS Report #16
ISSN 2768-1963
THE ECONOMIC AND FISCAL IMPACTS
OF IMMIGRANT POPULATIONS ON
NEBRASKA AND OMAHA:
EVIDENCE FROM THE 2015-2019 AMERICAN
COMMUNITY SURVEY
August 2021
OLLAS
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ISSN: 2768-1963
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THE ECONOMIC AND FISCAL
IMPACTS OF IMMIGRANT
POPULATIONS ON NEBRASKA
AND OMAHA:
EVIDENCE FROM THE 2015-2019 AMERICAN
COMMUNITY SURVEY
Christopher S. Decker Ph.D.
University of Nebraska at Omaha
Office of Latino/Latin American Studies (OLLAS)
University of Nebraska at Omaha
OLLAS Report #16
August 2021
ABSTRACT
Few public policy topics generate as much impassioned debate as immigration. While arguments abound
regarding the motivations for and efficacy of these policies, there are nonetheless many possible consequences
of their implementation. This study focuses on only one specific question: What is the economic impact of
immigrants on job creation and economic growth and development in Nebraska and the Omaha Metropolitan
Statistical Area (MSA). To that end, using the US Census Bureau’s American Community Survey (ACS) data
for the sample periods 2015 to 2019, this report quantitatively assesses this economic impact. While much of
the focus in this study is on the total international immigrant group, with particular attention is paid to those
immigrants from Mexico, Central America, South America, and the Caribbean Findings indicate a substantial
economic impact from these immigrant groups from a variety of perspectives. For example, immigrant labor
in the construction, food services, and animal slaughtering and processing generate substantial impacts. In
the Omaha MSA, this employment generated $7.9 billion in production and 37,271 jobs. The Latin American
and Caribbean born group generated $5.2 billion in production and 26,261 jobs. In Nebraska, total foreign
born employment generated $22.0 billion in production and 94,409 jobs. The Latin American and Caribbean
born group generated $16.1 billion in production and 79,516 jobs. Whatever the policy outcomes regarding
immigration become, a recognition of these groups’ economic contributions must be kept firmly in mind
Keywords: Foreign born, Latin American and Caribbean born, Economic Impact, Omaha, Nebraska.
ACKNOWLEDGMENTS
The author would like to thank Dr. Josie Shafer and Mr. David Drozd, both at the Center for Public Affairs
Research for providing the American Community Survey data. This data is used extensively in this report and it
would not have been possible to produce this analysis without it.
CONTACT
Christopher S. Decker, Ph.D., christopherdecker@unomaha.edu, University of Nebraska at Omaha, 6001 Dodge
St., Omaha, NE 68182, USA.
FUNDING SOURCE
Data analyzed for this project were originally collected through funding from the Office of Latino/
Latin American Studies (OLLAS) at the University of Nebraska at Omaha. The opinions and conclusions of
this project are the sole responsibility of the authors.
CITATION
This publication should be cited as: Decker, C. (2021). The Economic and Fiscal Impacts of Immigrant Populations
on Nebraska and Omaha: Evidence from the 2015-2019 American Community Survey. OLLAS Report #16. Office
of Latino/Latin American Studies, University of Nebraska at Omaha. https://doi.org/10.32873/uno.dc.ollas.1017
TABLE OF CONTENTS
Introduction ......................................................................................................................................................1
Impact Coverage ..............................................................................................................................................2
What is Being Measured................................................................................................................................2
Methodology .................................................................................................................................................3
The Structural Model, Direct Spending, and Multipliers...........................................................................4
Geography.................................................................................................................................................6
The Modeling Software ............................................................................................................................6
The Impacts Measured in This Report...........................................................................................................6
Data Sources Utilized for This Immigration Analysis...................................................................................8
Geographic Scope of This Impact Study........................................................................................................8
Expenditure Impacts of First Generation Foreign-born Immigrants.........................................................9
Expenditure Impacts ....................................................................................................................................10
Production Impact..........................................................................................................................................13
Production Impacts .....................................................................................................................................15
Employment Impacts ..................................................................................................................................16
Fiscal Contributions and Social Costs Pressures from the Immigrant Population in the State of Nebraska...17
Costs and Contributions ..............................................................................................................................18
Comparative Analysis ....................................................................................................................................20
Spending Impact Comparison .....................................................................................................................20
Production Impact Comparison ..................................................................................................................22
State Contributions and Cost Comparison ..................................................................................................24
Conclusion and Future Research..................................................................................................................25
Bibliography ...................................................................................................................................................27
Appendix A: American Community Survey Public Use Microdata Sample ............................................28
Appendix B: Calculating Direct Spending Injections from Income Data ................................................30
Appendix C: Sectors Used to Capture the Impact of Employment in Construction, Animal Slaughtering
and Processing, and Food Services ...............................................................................................................32
Appendix D: Calculations of Public Contributions and Costs Estimates.................................................33
Previous OLLAS Reports.........................................................................................................................37
Figures
Figure 1. The Multiplier Effect....................................................................................................................4
Figure 2. The Major Elements of an Economic Impact Study....................................................................5
Tables
Table 1: Summary of Populations and Income Characteristics..............................................................9
Table 2: Economic Impact of Immigrant Spending: Total Value of Production ($ millions) ..............11
Table 3: Employment Impact of Immigrant Spending: (#jobs)............................................................11
Table 4: Employment Summary Data..................................................................................................14
Table 5: Economic Impact of Total Immigrant Employment in Construction, Animal Slaughtering and
Processing, and Food Services: Total value of output ($millions).......................................................15
Table 6: Employment Impact of Total Immigrant Employment in Construction, Animal Slaughtering
and Processing, and Food Services: (#jobs).........................................................................................17
Table 7: Fiscal Contributions and Costs in Nebraska, 2019.................................................................19
Table 8: Economic Impact of Immigrant Spending Comparison..........................................................21
Table 9: Economic Impact of Immigrant Employment in Key Sectors...........................................22-23
Table 10: Fiscal Costs/contributions Comparison................................................................................25
Table A: Place of Birth - Country Breakdown......................................................................................29
INTRODUCTION
Of the many policy questions that governments world-wide grapple with, the immigration
debate remains a major and often heated topic. Driven by many multi-faceted and often challenged
arguments, there have been, in recent years, significant policy efforts in the United States and
many European countries to hinder new immigration and return existing undocumented
immigrants back to their home countries.
While arguments abound regarding the efficacy of these policies, there are nonetheless
many possible consequences of their implementation. This study focuses on only one specific
question: Based on the most up-to-date and reliable data, what is the economic impact of
immigrants on job creation and economic growth and development in Nebraska and the Omaha
Metropolitan Statistical Area (MSA)?
This study confirms and builds upon the Decker, Deichert, and Gouveia (2012) study. This
study included the findings that in Nebraska in 2010, immigrant population employment accounted
for $18.2 billion in economic impact, and was linked to 82,032 total jobs. Other similar studies,
include the Michigan study by Miller, Martinez, and Fawn (2010); the Minnesota study by
Fennelly and Hurt (2009); the Arizona study by Gans (2007); and the North Carolina study by
Kasarda and Johnson, Jr (2006).1
This analysis presents a broader view of immigration’s impact on an overall economy. To
that end, using the US Census Bureau’s American Community Survey (ACS) data for the sample
periods 2015 to 2019, this report attempts to quantitatively assess the economic impact of
immigrants in Nebraska and the Omaha MSA. While much of the focus in this study is on the total
international immigrant group, some particular attention is paid to those immigrants from Mexico,
Central America, South America, and the Caribbean (henceforth labeled Latin American and
To be sure, an economy-wide measure of impact is not the only issue of attention when it comes to immigration. A
major consideration is the impact on labor markets directly. While substantial, the literature has produced little
consensus as to the wage impact of immigration. Borjas (2003), for instance, found evidence that increased
immigration places significant downward pressure on wages in a variety of sectors. However, Card’s (2005) analysis
suggests that Borjas’ conclusion is too pessimistic, finding little evidence of any substantive link between wages and
immigration.
1
1
Caribbean in origin), and their impact, since the majority of immigrants in this area come from
these regions.
Additionally, this report compares updated estimates with the Decker, Deichert, and
Gouveia (2012) report. That said, we encourage some caution with such comparisons since the
source of change can be varied. In addition to population and labor changes, there are also
differences in tax rates, remittance data sources, etc., that can make it nearly impossible to identify
with a high level of certainty a specific reason for a difference over time.
This report is organized as follows. In the next section, “Impact Coverage,” we address the
nature of an economic impact analysis, what is being measured, how, and why. The following
section, “Expenditure Impacts of First-Generation Foreign-Born Immigrants,” presents the
impacts from immigrant spending on Omaha and Nebraska. In the section following that,
“Production Impact”, we present the impact on Omaha and Nebraska from immigrant employment
in three key sectors: construction; animal slaughtering and processing; and restaurant and food
services. Next, in “Fiscal Contributions and Social Cost Pressures from the Immigrant Population
in the State of Nebraska,” we compare Nebraska’s immigrant population’s contributions to state
budget coffers (income and sales taxes) and costs to state programs (Medicaid, public assistance,
and education) with that of the native-born group. “Comparative Analysis” is the penultimate
section where we compare the result of this study with the Decker, Deichert, and Gouveia (2012)
study. The final section is the “Conclusion and Future Research,” followed by the bibliography,
and the Annexes. The Annexes include a more detailed description of the methodology and sources
used on this report.
IMPACT COVERAGE
What is Being Measured
When presenting an economic impact report such as this, it is important to clearly outline
the nature of such an analysis. In this section, we will clarify what specifically is being measured,
why we are measuring it, and the methods we use to analyze this information. Firstly, for the scope
of this report, the impact numbers being generated measure full-time jobs. Also, the dollar value
2
of goods and services produced in an economy are those that result from a direct spending impact
(or direct injection as defined below). Specifically:
•
Jobs. Jobs can be thought of as both the employment, the direct spending by local business,
and the jobs created due to the increased demand for goods and services in an economy
that results from a direct spending injection.
•
Goods and Services. The dollar value of goods and services is defined as follows. The
IMPLAN model, like all models used for impact analysis, is a “supply meets demand”
model. The economy experiences an increase in demand for goods and services because of
a direct injection. So, when a company hires workers, purchases supplies, and constructs
plant additions, this creates new demand for suppliers who produce the materials (i.e., the
goods and services) necessary to meet the company’s needs. This increases sales for other
firms in the area, such as transportation firms, office suppliers, local retail outlets, and
construction firms, who in turn demand more materials from their suppliers. Those
suppliers then produce more. Called the “multiplier effect,” this dynamic filters through
the economy as more and more firms experience increase demand and thus produce more
goods and services to meet this increased demand. All the resulting goods and services
have a market value. It is this total market value that is being captured by the dollar value
of goods and services produced in an economy because of a direct injection.
Methodology
Conducting an economic impact analysis requires several components. First, a
mathematical, structural depiction, or structural model, of an economy is required which includes
not only the various sectors (or industries) that comprise the economy, but also incorporates how
those sectors are related to one another through the supply chain. This will allow for the
construction of “multipliers” - the primary measure of impact. Along with this structural model, a
measure of a direct spending injection is needed. This spending data offers a starting point from
which we can track the economic activity we wish to measure. Once started, we can then assess
the contribution an event, activity, industry, or company makes to an economy. These direct
spending measures are of critical importance and will be discussed at length below. Second, a
geographic delineation is necessary to track spending activity retained in an economy.
3
The Structural Model, Direct Spending, and Multipliers
As stated above, to measure impact, a structural model of the economy that captures the
linkages between sectors must be in place. The typical structure of such a model takes the form of
an input-output (IO) model. While IO models have been around for many years, they are still
widely used to this day.
Figure 1
The Multiplier Effect
Direct Effect:
Spending
from
consumers
or labor
contributions
to industries
+
Indirect Effect:
Increased
expenditure
prompted by
the direct effect
+
Induced Effect:
Increased
income to
households
inducing
additional
spending
=
Total Effect:
The sum of
direct,
indirect, and
induced
effects
An IO model, originally developed by Economist Wassily Leontief and therefore often
called the Leontief model, describes an economy as a series of inter-linked sectors. A stimulus to
one sector then impacts many other sectors in the economy, to varying degrees, through forward
and backward linkages, or more familiarly, the sector’s supply chain. As spending filters through
the economy, we can quantitatively capture this spending through the resulting “multiplier effect.”
The multiplier effect measures the “indirect” and “induced” effects of a direct injection of
spending. As a matter of technical exposition, “indirect” effects are those re-spending effects that
filter through other industries in an economy because of direct spending (much like how a supply
chain operates). For instance, suppose direct spending on hotel services boosts demand for
cleaning services at these hotels (the first indirect effect). This stimulates demand for cleaning
equipment and cleaning products (the second indirect effect). This second indirect effect stimulates
demand in yet other sectors, and so on. The sum of all these effects on other industries is the
“indirect” effect. The “induced” effect involves labor spending from earned income. All sectors
employ people locally. Increased demand for output will likely require additional labor inputs paid
4
for via wages and salaries. The resulting increase in employee incomes prompts yet more spending
locally. This additional spending is the “induced” effect. The continual “re-spending” of the
original direct spending accumulates through to the local economy. 2
The total effect is then the sum of the direct, indirect, and induced effects. From these
figures, we obtain multipliers. For example, an increase of $1.00 on hotel services might result in
an additional 55 cents worth of transactions through indirect and induced effects. The result, then,
is a multiplier of 1.55. Figure 2 below illustrates this process.
Figure 2
The Major Elements of an Economic Impact Study
Consumer
expenditures
(market demand)
Tax (state) revenue
(income, sales,
property, gasoline)
Economic
Impact
Public (state) cost
(health expenditures,
educa�on, public
assistance, food stamp
programs)
Industrial Produc�on
Labor supply
Competitiveness
(market supply)
2
References on input-output models are extensive and available upon request from the author.
5
Geography
Another important component of economic contribution analysis is geography. Typically,
we are engaged in measuring the impact of direct spending on a particular regionally defined
economy, such as a state or city. It is important to delineate the geographic extent of the economy
because doing so will have a substantial impact on the resulting multipliers. The goal of economic
contribution analysis is to determine how much additional economic activity is locally linked to
direct spending. It is the local spending that determines the multiplier. As an extreme case, if direct
spending impacts a sector in the economy whose supply chain is fully outside the local economy
and whose labor income is completely spent outside the local economy, the multiplier effect
would, in effect, be zero. As a general observation, economies with limited geography (and limited
economic activity) could have smaller multipliers than economies with larger geographies and
more local economic activity.
The Modeling Software
In terms of the computer software employed in this study, there are several input-output
model platforms that can be used for this economic contribution analysis. One of the most common
models used is IMPLAN, developed by the Minnesota IMPLAN Group, Inc. (MIG, Inc.).3 The
IMPLAN model provides substantial industry detail (a desirable characteristic as multipliers will
vary widely from industry to industry). It also provides substantial detail on direct injections and
indirect effects, and is quite flexible in that it allows users to input a variety of market
characteristics that may be unique to a particular area of the country. IMPLAN will be used in this
analysis.
The Impacts Measured in This Report
Following Decker et al. (2012), as well as Kasarda and Johnson, Jr. (2006), the basic
makeup of most impact studies of this nature generally has four elements (see Fig. 2) These
elements are:
3
For details regarding IMPLAN, visit http://www.implan.com.
6
•
Consumer Expenditures Impact. This effect focuses attention on the demand side of an
economy. A given group, such as first-generation immigrants, will be income earners and
will spend income on a variety of locally provided goods and services in certain sectors of
the economy. These expenditures are our “direct” injection expenditures. In turn, these
expenditures will stimulate further “indirect” spending increases and increased labor
earnings, generating the “induced effect.” Taken together, these direct, indirect, and
induced expenditures provide a measure of total expenditure impact on an economy.
•
Production Impact. The production impact measures the effect of an increase/decrease in
labor on an economy. This, too, will have a multiplier effect associated with it. For instance,
a reduction in the meat processing industry of, say, 100 workers will result in lower output
in the meat processing sector. Moreover, because of reduced production and incomes, there
will be lower demand for other goods and services in an economy, thus creating an adverse
indirect effect on other sectors of the economy. Lower household incomes create an
adverse induced effect as well. The total impact is, again, measured by a total multiplier
effect.
•
Fiscal Contributions. Increases in employment, immigrant or otherwise, generates
income tax revenue for the state. In addition, sales tax revenue is generated on spending,
and excise tax revenue is generated on the sale of gasoline. These fiscal contributions to
state and local economies go to support education, health services, road construction and
repair, etc. These effects must also be considered as part of the overall impact on an
economy.
•
Public Sector Costs. Increased population, immigrant or otherwise, will place increased
pressure on public goods and services. Hence, part of the impact on the economy needs to
address this increased demand. As discussed in detail below, in this study we consider
expenditures on food stamps, public assistance support supplied by the state of Nebraska,
cost of supplying educational services, and state support for health care expenditures. To
be sure, there may be other public sectors to consider. However, in Nebraska, these
categories tend to be the major sources of public expenditure.
7
Data Sources Utilized for This Immigration Analysis
Throughout this report, data sources are referenced. However, the primary data source is
the American Community Survey (ACS), sampled over the years 2014 to 2019, available from the
US Census Bureau. These data samples, adjusted to reflect 2019 estimates, offer researchers the
most recent and comprehensive secondary statistical data source of demographic and economic
information at the state and county geographic levels. From these data, we obtain information on
population and income by demographic group as well as employment by industrial sector. The
ACS sample is sufficiently large to offer statistically reliable and detailed information by native,
foreign-born, and foreign-born from Latin American and Caribbean countries for our economies
of interest: Nebraska and the Omaha MSA. 4 To these data, we apply data from other sources to
obtain estimates of necessary economic variables. Details regarding the ACS can be found in
Appendix A.
Geographic Scope of This Impact Study
As indicated above, we are focused on Nebraska and the Omaha MSA. The Omaha
economy necessitated by ACS sampling characteristics is defined by The US Census Bureau’s
Public Use Microdata Area (PUMA) region, called the Omaha-Council Bluffs PUMA. 5 The
Omaha metropolitan statistical area (MSA) is as defined by the US Congressional Budget Office. 6
While we have more counties in the PUMA than the MSA, the Omaha Economy, from the
perspective of IMPLAN, comprises just the MSA. Given that the Iowa and Nebraska counties
included in the PUMA but not in the MSA are relatively small in population, this presents no
significant limitation to the impact assessment on the MSA.
For purposes of this report, Mexico, Cuba, Jamaica, and the Dominican Republic, among others, are included
under the Latin America and the Caribbean category. The total foreign-born category includes both those from
Central and South America as well as the rest of the world. Table A1, in Appendix A, identifies the country of origin
for the delineations used in this study.
5
The PUMA region includes Cass, Dodge, Douglas, Sarpy, Saunders, and Washington Counties in Nebraska, and
Cass, Fremont, Harrison, Mills Montgomery, Page, Pottawattamie, and Shelby Counties in Iowa.
6
The Omaha MSA is comprised of Cass, Douglas, Sarpy, Saunders, and Washington Counties in Nebraska, and
Harrison, Mills, and Pottawattamie Counties in Iowa.
4
8
EXPENDITURE IMPACTS OF FIRST-GENERATION FOREIGN-BORN
IMMIGRANTS
According to the 2015-2019 American Community Survey, the Omaha-Council Bluffs PUMA had
a total population of 931,779 people; almost equally distributed by sex. The median age of the
population was 35.7 years, and 85% of this population were 16 years and older, the minimum age
used by the US Census Bureau to establish possible participation in the labor force. Nebraska had
a total population of 1,914,571 people, with a median age of 36.5 years, and 78% of its people
over the age of 16. Table 1 below provides a summary picture of the demographic and earnings
figures for the population 16 years and over (16+) in the Omaha-Council Bluffs PUMA study
region as well as for Nebraska based on the 2015-2019 American Community Survey.
Table 1
Summary of Population and Income Characteristics
Omaha-Council Bluffs PUMA
Population 16 and over
Mean Income ($)
Total Income ($ millions)*
Nebraska
Population 16 and over
Mean Income ($)
Total Income ($ millions)*
Total
NativeBorn
ForeignBorn
Latin American and
Caribbean-Born
792,628
$43,929
$34,819
722,603
$45,086
$32,579
70,025
$31,983
$2,240
35,690
$25,148
$898
1,491,123
$41,191
$61,421
1,362,235
$42,240
$57,541
128,888
$30,107
$3,880
70,234
$25,605
$1,798
Source: U.S. Census Bureau, 2015-2019 ACS Public Use Microdata Samples.
* 2019 dollars.
These data reflect a few essential elements. In the Omaha-Council Bluffs PUMA, 8.8% of
the population 16-and-over (16+) were foreign-born in 2019. In Nebraska, it was 8.6%. For the
Latin American and Caribbean born, the population concentrations in the Omaha-Council Bluffs
PUMA and Nebraska were 4.5% and 4.7%, respectively. These percentages are up from 3.7% and
3.8% in 2010 as reported in the Decker et al. (2012) study.
Following historical patterns, mean income levels for foreign-born populations in 2019
tended to be lower relative to Native-born mean income levels. That said, mean incomes have
increased relative to Decker, Deichert, and Gouveia (2012), report. In Omaha-Council Bluffs
PUMA, the mean income for foreign-born and Latin American and Caribbean born individuals
9
was $31,983 (up from $25,549 in 2010) and $25,148 (up from $19,966 in 2010), respectively.
These values are about 73.1% and 57.1% of the native-born population’s mean income levels.
In Nebraska, mean incomes for the entire foreign-born population and for the Latin
American and Caribbean born populations were similarly lower (by between 73% and 62%,
respectively) than their native-born counterparts. However, income has also increased compared
to 2010. Foreign-born groups earn on average $30,107 state-wide (up from $22,702 in 2010) and
the Latin American and Caribbean born groups earn $25,605 state-wide (up from $18,982 in 2010).
Much of this differential is likely due to occupational and demographic differences.
Immigrant populations tend to have a higher proportion of younger individuals than the native
population and many immigrant jobs tend to be in sectors with comparatively lower wages. The
implication of this lower per capita income is that the overall economic impact of immigrant
spending in Omaha and Nebraska economies, while still significant, will tend to be lower than
their population concentrations would initially suggest.7 That said, the increase in mean incomes
is encouraging and reflects more spending power in the economy, relative to 2010.
Expenditure Impacts
The 2019 consumer expenditures are based on the immigrant income data from ACS. This
is done by deducting from the income data federal, state, and payroll income taxes, yielding an
estimated after-tax personal income. Also, an estimate of the percent of income remitted to home
country was also deducted from immigrant income. Finally, because it is important to track local
(within geography) spending we used data from IMPLAN to determine the percentage of spending,
on average, that tends to take place outside the local economy (e.g., spending online, vacation
spending, etc.). The details regarding these deductions are provided in Appendix B.
For the Omaha MSA, we estimate that the first generation foreign-born spent $1.3 billion
in 2019 locally while the Latin American and Caribbean born spent $541 million. We also estimate
that the foreign-born Nebraska population spent $2.3 billion in the state whereas the Latin
American and Caribbean born spent $1.1 billion. Table 2 below shows the direct spending values
Also, it is very common for immigrant populations to remit some of their take-home pay back to families still residing
in their respective countries of origin.
7
10
used to generate the overall spending impact of the immigrant populations on the Omaha MSA
and the state of Nebraska.
Table 2
Economic Impact of Immigrant Spending: Total Value of Production ($ millions)
Direct
Injection
Indirect
Induced
Total
Impact
$1,321
$541
$541
$217
$527
$223
$2,389
$981
$2,288
$1,084
$877
$408
$790
$388
$3,955
$1,880
Omaha MSA
Total Foreign-Born
Latin American and Caribbean-Born
Nebraska
Total Foreign-Born
Latin American and Caribbean-Born
Source: Author’s estimates using IMPLAN. Figures reflect 2019 dollars.
In terms of jobs, IMPLAN estimates jobs per dollar of direct injection to translate spending
injections into the employment needed to support that spending. Based on these estimates, the
direct spending from the Omaha MSA first-generation foreign-born in 2019 supported an
estimated 10,473 jobs. Some 4,422 jobs were needed to support Latin American and Caribbean
foreign-born spending.
Similarly, for the state of Nebraska, about 19,116 jobs were needed to support total
immigrant spending and 9,274 were needed just for the Latin American and Caribbean group.
Again, note that these jobs are not necessarily jobs held by immigrants. They are the total jobs
necessary to support the level of spending immigrants are engaged in. Job holders can come from
any segment of the population. Table 3 shows the jobs, irrespective of immigrant status, that are
directly generated to support this spending.
Table 3
Employment Impact of Immigrant Spending: (# jobs)
Direct
Injection
Indirect
Induced
Total
Impact
10,473
4,422
3,239
1,309
3,815
1,622
17,527
7,354
19,116
9,274
5,382
2,519
5,943
2,921
30,441
14,715
Omaha MSA
Total Foreign-Born
Latin American and Caribbean-Born
Nebraska
Total Foreign-Born
Latin American and Caribbean-Born
Source: Author’s estimates using IMPLAN.
11
To capture the total economic impact, the spending figures were input into IMPLAN to
generate the overall impact of such spending on the two different economies. As shown in Table
2, the direct expenditure by the Omaha MSA foreign-born population resulted in $541 million in
indirect and $527 million in induced expenditures, resulting in a total impact of $2.4 billion worth
of goods and services production to the region’s economy in 2019. The resulting output multiplier
is 1.81, which is the result of dividing total impact ($2.4 billion) by the direct injection ($1.3
billion). This indicates that for every dollar spent by the state’s immigrant population in 2019, 81
additional cents were created through indirect and induced effects. Similarly, the total impact of
the Latin American and Caribbean immigrants in the Omaha MSA was $981 million.
For Nebraska, the direct expenditure by the Omaha MSA foreign-born population resulted
in $877 million in indirect and $790 million in induced expenditures, resulting in a total impact of
$4.0 billion to the region’s economy in 2019. The resulting output multiplier is 1.71 Similarly, the
total impact of the Latin American and Caribbean immigrants in the Omaha MSA was $1.9 billion.
Spending by immigrants in the Omaha MSA economy created 17,527 jobs, through
indirect and induced effects (see Table 3 above). The employment multiplier here is 1.67,
suggesting that for every job immigrant spending supports an additional 0.67 jobs are created. This
is in line with the overall economy’s jobs multiplier of 1.6. Spending by Latin American and
Caribbean born consumers, specifically in the Omaha MSA, generated 7,354 jobs in 2019. In
Nebraska, spending by foreign-born individuals generated 30,441 jobs in 2019, through indirect
and induced effects. Spending by the Latin American and Caribbean group supported a total of
14,715 jobs in 2019.
While some direct comparisons are difficult to make between immigrant populations and
their native-born counterparts, consider the following: the total economic impact of the nativeborn population on Nebraska in 2019 (not reported but details are available upon request), was
estimated to be $56.5 billion, much larger than the immigrant spending effect due mostly to the
larger native population and higher income levels. However, the per Native-born Nebraska
resident contribution was $41,499 ($56.5 billion/1,362,235 individuals). Their mean income level
12
is $42,239. Notice that their contribution to total impact, although close, is less than their mean
income levels. 8
The immigrant population per Nebraska immigrant impact in 2019 was $30,685 ($4.0
billion/ 128,888 individuals). Their mean income levels were $30,107. Again, while the two
figures are close, the immigrant group produces a bit more in total impact than they earn in salary
on average.
PRODUCTION IMPACT
The foreign-born population 16 and older (16+) accounted for 8.8% of this age group’s
total population in the Omaha-Council Bluffs PUMA in 2019. In Nebraska it accounted for 8.6%.
Immigrants of Latin American and Caribbean origin accounted for 4.5% and 4.7% of the total
population 16+ in the Omaha-Council Bluffs PUMA, and Nebraska, respectively. However, those
16 and older immigrants born in Latin American and the Caribbean are 51% and 55% of all
immigrants of the same age group on each of these geographies (see Table 1 above). These groups’
labor force contributions are considerably higher in certain key sectors: Construction; animal
slaughtering and processing; and restaurants and other food services.
In this section, we estimate the likely impact on state and regional economies if this labor
force were, in effect, unavailable. In doing this experiment, we identified the three sectors listed
above that tend to rely heavily on immigrant labor (primarily Latin American and Caribbean
immigrant labor) and where many immigrants find work. Table 4 summarizes these employment
figures.
For the Omaha-Council Bluffs PUMA, 6,073 immigrants were employed in construction
in 2019, accounting for 14% of total construction employment (Latin American and Caribbean
immigrants account for nearly all of this, making up 13% of total construction employment). In
animal slaughtering and processing, immigrants accounted for 5,650 jobs or 53% of total
employment. Latin American and Caribbean born immigrants accounted for 3,208 of these jobs or
30% of the total.
A savings rate roughly equivalent to the immigrant population’s remittance rate was assumed. The most recent
data suggest that the national savings rate is around 13.6%.
8
13
Table 4
Employment Summary Data
Native-Born
55,325
6,073
%
9
14
Latin American and
Caribbean-Born
Employed
%
28,530
4
5,618
13
47
5,650
53
3,208
30
88
4,068
12
2,654
8
12
1,208,264
71,505
91
86
29
103,084
11,281
9
14
40
57,677
10,248
5
12
9,699
39
15,075
61
10,612
43
56,574
90
6,436
10
4,121
7
Employed
Omaha-Council Bluffs PUMA
Construction
Mfg.-Animal slaughtering and
processing
Restaurants and other food
services
Percent of total employment*
Nebraska
Construction
Mfg.-Animal slaughtering and
processing
Restaurants and other food
services
Percent of total employment*
Foreign-born
Employed
586,819
38,132
%
91
86
5,016
28,844
12
32
43
Source: U.S. Census Bureau, 2015-2019 ACS Public Use Microdata Samples.
* Figures reflect the percent of total jobs these three sectors account for, stratified by demographic
group.
In Nebraska, immigrant labor in construction, animal slaughtering and processing, and
food services accounted for 14%, 61%, and 10%, respectively, of each sector’s total. Immigrants
from Central/South America accounted for 12%, 43%, and 7%, respectively, for these three
sectors.
While not shown, it is worth pointing out that when compared to 2010, the immigrant mix
of employment across these three sectors is a bit different. For instance, in the Omaha-Council
Bluffs PUMA and Nebraska, immigrant employment in animal slaughtering and processing was
higher in 2010. Immigrant employment accounted for 54% and 62%, respectively, in the OmahaCouncil Bluffs PUMA and Nebraska. With the Latin American and Caribbean population, the
differences are more striking. In 2010, this group accounted for 46% of the total in animal
slaughtering and processing in both the PUMA and the state. This percentage slipped to 43% in
the state and a substantial reduction to 30% in the PUMA in 2019.
That said, the number of immigrants employed in the other two groups increased between
2010 and 2019. The immigrant group now accounts for 14% of total construction jobs (an increase
14
of about 2,000 jobs in the PUMA and 3,000 in the state). Jobs in restaurants and other food services
employment is up as well in both the state and PUMA.
Overall, across these three sectors, total immigrant employment has increased between
2010 and 2019. In 2010, total immigrant employment in the PUMA was 13,570. In 2019, it was
15,791. The increase in the Latin American and Caribbean jobs was much smaller but still was an
increase. In 2010, it was 11,387, in 2019, it was 11,480.
For Nebraska, across all three sectors, immigrant employment increased between 2010 and
2019, from 29,277 to 32,792. For the Latin American and Caribbean group, jobs increased from
22,490 to 24,981.
In short, the total jobs are up relative to 2010, but the mix across different sectors is
different. As we will see, this will influence the economic impact figures.
Production Impacts
We interpret these employment figures as the immigrant labor force deployed in each of
the above-mentioned sectors and use IMPLAN to ascertain the total impact this labor force has on
the Omaha MSA and Nebraska economies. 9 Table 5 summarizes the production impact.10
Table 5
Economic Impact of Total Immigrant Employment in Construction, Animal Slaughtering
and Processing, and Food Services: Total Value of Output ($ millions)
Direct
Injection
Indirect
Induced
Total
Impact
$4,399
$2,878
$2,136
$1,381
$1,357
$967
$7,893
$5,226
$10,504
$7,725
$8,396
$6,059
$3,070
$2,297
$21,971
$16,080
Omaha MSA
Total Foreign-Born
Latin American and Caribbean-Born
Nebraska
Total Foreign-Born
Latin American and Caribbean-Born
Source: Author's estimates using IMPLAN Figures reflect 2019 dollars.
It is possible that if this labor force were not available, there could be sufficient native-born workers available in
their place. However, the current models and data do not permit an effective analysis for this potential counter factual.
All we truly know is that this immigrant labor is available and is deployed. As such, with this analysis, we are
effectively demonstrating here what this group’s contributions actually are. Once done, readers can infer what the
potential impact on the economy might be should this labor force no longer be available.
10
IMPLAN’s industry delineations differ from the ACS. Refer to Appendix C for an explanation of how the
IMPLAN industries to the ACS was mapped.
9
15
For the Omaha MSA economy, the total impact of immigrant employment in the three
above-identified sectors was $7.9 billion. This represents a multiplier of about 1.80, implying that
for every dollar of production generated by this labor force in these three sectors, the overall
Omaha MSA economy experiences an additional 80 cents worth of goods and services production
due to indirect and induces effects. The overall economy’s median production multiplier,
according to IMPLAN is 1.62. Hence, the impact from these sectors, resulting from immigration
employment, is higher than average for the economy. For the Latin American and Caribbean born
group, their total impact was $5.2 billion in 2019.
For the Nebraska economy, the total impact of immigrant employment in the three aboveidentified sectors was $22.0 billion. This represents a multiplier of about 2.10, implying that for
every dollar of production generated by this labor force in these three sectors, the overall Nebraska
economy experiences an additional dollar worth of goods and services production due to indirect
and induces effects. The overall Nebraska economy’s median production multiplier, according to
IMPLAN is 1.56. Hence, the impact from these sectors, resulting from immigration employment
population, is substantially higher than average for the economy. For the Latin American and
Caribbean born group, their total impact was $16.1 billion in 2019.
Employment Impacts
In the Omaha MSA, from the 15,791 immigrants employed in construction, animal
slaughtering and processing, and food services, an additional 21,480 jobs are created through
indirect and induced effects, for a total of 37,271 jobs generated in 2019. This is shown in Table 6
below, which reports the jobs impact from this immigrant labor force availability. This represents
an employment multiplier of 2.4. So, an immigrant employed in one of these sectors will ultimately
support an additional 1.4 jobs. The overall median employment multiplier for the Omaha MSA is
1.65. Therefore, these sectors where immigrant employment is so prominent have a significantly
higher than average job impact on the economy.
Those born in Latin America and the Caribbean also generated a sizable impact in 2019.
Total jobs linked to this group’s direct 11,480 employment levels totaled 26,261 jobs generated
economy-wide.
16
Table 6
Employment Impact of Total Immigrant Employment in Construction, Animal Slaughtering and
Processing, and Food Services: (# jobs)
Direct
Injection
Indirect
Induced
Total
Impact
15,791
11,480
11,625
7,760
9,855
7,021
37,271
26,261
32,792
24,981
37,957
27,832
23,660
17,703
94,409
70,516
Omaha MSA
Total Foreign-Born
Latin American and Caribbean-Born
Nebraska
Total Foreign-Born
Latin American and Caribbean-Born
Source: Author's estimates using IMPLAN.
In Nebraska, the 32,792 immigrants employed in construction, animal slaughtering and
processing, and food services, created an additional 61,617 jobs through indirect and induced
effects, for a total of 94,409 jobs in 2019. This represents an impressive employment multiplier of
2.9. Hence, an immigrant employed in one of these sectors will ultimately support close to an
additional 2 jobs. The overall median employment multiplier for the state is 1.80. Again, as was
the case with the MSA, these sectors where immigrant employment is so prominent have a
significantly higher than average job impact on the economy.
As shown in Table 6, the Latin American and Caribbean group held 24,981 jobs across the
construction, animal processing, and food services sectors. Through indirect and induced effects,
a total of 70,516 jobs were supported by this labor force.
FISCAL CONTRIBUTIONS AND SOCIAL COST PRESSURES FROM THE
IMMIGRANT POPULATION IN THE STATE OF NEBRASKA
In addition to their economic impact, immigrant groups also both contribute to, and draw
from, public resources. There is ample evidence that immigrant groups pay into public coffers, in
the form of sales taxes, and more often than not, either directly or indirectly, through income and
payroll taxes.
Moreover, like all groups in society, immigrant groups tap into public services from time
to time. Be that in health services, educational services, or public assistance, immigrant
populations do utilize such programs.
17
A common question is: do immigrants draw more out of public services than they pay in
relative to their native-born counterparts? Interestingly, much of the available, albeit limited,
evidence suggests the answer to this is no. Many studies have found that the state’s immigrant
population tends to “pay in” as much, if not more, than they receive from state and local services
relative to their native-born counterparts (e.g., Garvey, Espenshade, and Scully (2002), and
Kasarda and Johnson, Jr. (2006)).
Following Decker et al. (2012), we attempt, to the extent possible, to assess this “pay-in”
(contributions to government) versus “draw-out” (government costs) issue in Nebraska. Given data
limitations, the focus here will be on state government costs and contributions only. Moreover,
data limitations also force us to restrict our attention to what can be reliably estimated. The result
is, for what we can measure, the best strategy to compare the immigrant and native-born
population’s costs and contributions.
Costs and Contributions
Contributions to state governments come from several sources. We consider three: income
taxes, sales taxes, and energy (gas) excise taxes paid to the state. Table 7 shows, based upon 2019
estimates, the percent of total contributions for these three revenue sources coming from each
demographic group for Nebraska. Costs are comprised of public assistance, state-contributions to
Medicaid expenditures, and education spending. Summing the foreign-born and native-born
percentages yields 100%. 11
The main reason for showing percentages rather than dollar values is as follows. Since we
can’t compile a complete set of contributions, dollar value totals and comparisons can be
misleading. However, a comparison based upon percentage contributions from each demographic
group can offer some insight. This is also true for public costs. Since a complete set of public
expenditure estimates would be quite involved and well beyond the scope of this study, the dollar
value of cost estimates is not useful in this context. Yet, of the cost categories we can offer
estimates for, the percent of public expenditures going to meet the needs of our various
demographic groups can offer some information regarding the pressure these groups place on these
Central and South American immigrants are a sub-group within the foreign-born group and therefore their
contributions and costs are subsumed within the foreign-born figures.
11
18
state-support public programs. Details on how estimates were constructed are supplied in
Appendix D.
Table 7
Fiscal Contributions and Costs in Nebraska, 2019 (in percentages)
Contributions
State Income taxes
State Sales taxes
State Gasoline taxes
Total
Costs
Public Assistance
Medicaid
Education
Total
Ratio of contributions to costs
Native-Born
Foreign-Born
Latin American and
Caribbean-Born
94.6
93.4
93.2
94.2
5.4
6.6
6.8
5.8
2.4
3.1
2.7
2.6
88.0
93.4
96.5
94.8
0.99
12.0
6.6
3.5
5.2
1.10
6.3
2.3
1.4
2.1
1.20
Source: Author's estimates drawn from various sources.
Nebraska’s foreign-born population accounted for 5.4% of state income tax, 6.6% of state
sales tax revenue and 6.8% of state gas tax revenue. Overall then, the state’s immigrant population
accounted for 5.8% of measured contributions to state coffers. Within this group, those born in
Latin America and the Caribbean accounted for 2.6%. Notice for both groups, their respective
percentages are relatively higher in sales and gas tax revenues collected than in income.
The native-born, due to their much larger population, accounted for 94.2% of these
contributions. Notice further that this group’s highest contributing percentage is though income
tax collections. Much of this is due to the higher average incomes native-born populations have
when compared to the immigrant base.
In terms of what these groups “draw out” as a cost to government, the immigrant population
accounted for 5.2% of estimated costs, with those born in Latin America and the Caribbean
accounting for 2.1%. The native-born group accounts for 94.8% of these costs.
In terms of the cost breakdown, immigrant groups do account for 12% of public assistance
spending, 6.6% of Medicaid spending, and 3.5% of education spending. The mix is different for
19
the native group who accounted for 88% of public assistance, 93.4% of Medicaid, and 94.8% of
education.
In short, immigrants tend to tap into public assistance more than the other categories. This
could be due to the economic vulnerability of these immigrant groups, at least when compared to
the native-born counterpart. Incomes do tend to be lower and unemployment rates historically tend
to be higher for these groups than for the native-born as they tend to tap into education more-so
than the other categories. This is likely due to the significantly larger native-born population aged
5 to 17.
Perhaps the most telling part of the figures presented in Table 7 is the ratio of contributions
to cost by group. For the native-born group, the contribution percentage is nearly identical to the
cost percentage, suggesting a degree of balance in what they pay in versus what they draw out.
However, for the immigrant groups, the data suggest that, with the categories we have
measured here, they tend to pay in slightly more than they draw out. The ratio for total immigrants
is 1.1, suggesting they pay in about 10% more (as a share of total) than they draw out (as a percent
of total). The ratio is even higher for the Central and South American born group. Their ratio is
1.2, suggesting they pay in about 20% more (as a share of total), than they draw out (as a percent
of total). The major difference appears to be on the education side, likely due to the relatively
smaller population aged 5 to 17 (when compared to the total immigrant and native groups).
These results, though a bit limited in scope, are compelling and tend to confirm other
studies that find similar results. (e.g., Garvey, Espenshade, and Scully (2002)).
COMPARATIVE ANALYSIS
In this section, we offer a few points of comparison between the impact results presented
here and the Decker, Deichert, and Gouveia (2012) study that looked at the 2010 impact values.
Spending Impact Comparison
Spending impacts on both total production and jobs from both the current and 2012 study
can be seen in Table 8 below.
20
Table 8
Economic Impact of Immigrant Spending Comparison
Total Value of Output ($ millions)
Direct Injection
2010
Total Impact
Direct Injection
2019
Total Impact
$1,392
$2,151
$2,288
$3,955
$621
$949
$1,084
$1,880
$834
$1,393
$1,321
$2,389
$329
$543
$541
$981
Nebraska
Foreign-Born
Latin American and
Caribbean-Born
Omaha MSA
Foreign-Born
Latin American and
Caribbean-Born
Number of Jobs
2019
Direct Injection Total Impact
Direct Injection
2010
Total Impact
11,177
17,478
19,116
30,441
4,988
7,799
9,274
14,715
5,179
8,315
10,473
17,527
2,043
3,280
4,422
7,354
Nebraska
Foreign-Born
Latin American and
Caribbean-Born
Omaha MSA
Foreign-Born
Latin American and
Caribbean-Born
Source: Author's estimates using IMPLAN Figures reflect 2019 dollars.
In terms of the production impact differences, the impacts values are across the board larger
in 2019 relative to 2010. The total impact of $4.0 billion from Nebraska’s first-generation foreignborn population is almost twice that of the same group’s impact in 2010 ($2.2 billion). For the
Latin American and Caribbean subgroup, the impact in 2019 ($1.8 billion) is, again substantially
higher than in 2010 ($949 million).
Similar increases are also seen in the Omaha MSA, where the total immigrant impact in
2019 was $2.3 billion, whereas only nine years earlier it was $1.4 billion. For the subgroup, from
an impact of $543 million in 2010, we have seen an increase to $981 million.
Also, as seen from Table 8, the jobs impact has increased substantially as well. In Nebraska,
the total jobs impact from immigrants went from 17,478 to 30,441, and for the immigrant subgroup
we went from 7,799 to 14,715. These jobs figures have nearly doubled in just nine years.
21
Similarly, for the Omaha MSA, the job impact has nearly doubled as well. In 2019, the
total immigrant spending impact led to 17,527 jobs, up from 8,315 in 2010. For the Latin American
and Caribbean subgroup, the increase went from 3,280 in 2010 to 7,354 in 2019.
The reasons for these increases are varied. For example, an economy’s multipliers often
change, sometimes substantially, over time as new businesses in new sectors open and more jobs
are created.
However, in this case, the main reason for these increases in impact is that immigrant
incomes have increased. The direct injections reflect this increase in immigrant income between
2010 and 2019. This increased income generated increased spending. The result is that indirect
and induced effects are increased as well, further lifting the total impact. As immigrant groups
have experienced economic success, the rest of the economy benefited in the form of more jobs
and the production and sale of goods and services.
Production Impact Comparison
Furthermore, Table 9 below shows the employment impacts on both total production and
jobs from both the current and 2012 study.
Table 9
Economic Impact of Immigrant Employment in Key Sectors
Total Value of Output ($ millions)
2010
2019
Nebraska
Foreign-Born
Latin American and
Caribbean-Born
Omaha MSA
Foreign-Born
Latin American and
Caribbean-Born
Direct Injection
Total Impact
Direct Injection
Total Impact
$8,646
$18,155
$10,504
$21,971
$6,528
$13,646
$7,725
$16,080
$3,377
$6,476
$4,399
$7,893
$2,915
$5,588
$2,878
$5,226
22
Table 9 (cont’d)
Number of Jobs
2019
2010
Nebraska
Foreign-Born
Latin American and
Caribbean-Born
Omaha MSA
Foreign-Born
Latin American and
Caribbean-Born
Direct Injection
Total Impact
Direct Injection
Total Impact
29,227
82,032
32,792
94,409
22,490
62,389
24,981
70,516
13,570
33,952
15,791
37,271
11,387
29,018
11,480
26,261
Source: Author's estimates using IMPLAN Figures reflect 2019 dollars.
To provide some context, in terms of overall population changes, between 2010 and 2019
the total 16+ immigrant population in Nebraska increased from 95,734 to 128,888, a 35% increase.
In the Omaha area, the total immigrant increase was 50,988 in 2010 to 70,035 in 2019, a 37%
change. For those born in Latin American and the Caribbean, the increase between 2010 and 2019
was 17,551 (a 33% increase) in Nebraska, and 8,729 (a 32% increase) in the Omaha MSA.
In terms of the economic impacts reported in these two studies, while the figures reflect
demographic changes, there are some other elements that need to be addressed. With respect to
production and job impacts in Nebraska, the 2019 data reflected a higher degree of impact than
was found in 2010. With regards to the Nebraska jobs impact, this was also found to be the case,
with the 2019 jobs numbers showing a greater impact than the 2010 numbers. The total 2019
impact from foreign-born workers was $22.0 billion, up from $18.2 billion in 2010. And the total
job impact was 94,409 in 2019, up from 82,023 nine years earlier. We observe similar increases
for the Latin American and Caribbean subgroup. Much of this increase can be attributed to the
overall increase in immigrant employment in the construction, animal slaughtering and processing,
and food services industries.
However, when we look at the Omaha MSA, we observe a few differences. First, for the
total production impact, those values are larger in 2019 than in 2010, but interestingly not as much
as they seem to be at the state level. Indeed, for the foreign-born, the impact went from $6.5 billion
in 2010 to $7.9 billion in 2019. Moreover, with regards to the employment impact, while we see
an increase in jobs for the foreign-born, from 33,952 in 2010 to 37,271, we observe a fall in the
23
total jobs impact for the Latin American and Caribbean subgroup, from 29,018 in 2010 to 16,261
in 2019.
So, one might wonder as to the cause of the drop in the subgroup’s employment impact.
After all, total direct jobs were higher in 2019 (up to 11,480 from 11,387). The main reasons come
from three conditions. First, the direct jobs increase, while an increase, is still a relatively small
one (less than 100 jobs). Second, employment multipliers are different in 2019 than in 2010 for
the three sectors of interest (construction, animal slaughtering and processing, and food services).
They are, in general, a bit smaller. The reasons are complex, but this is likely due to certain
businesses relocating outside the MSA area as often happens as cheaper commercial land becomes
available.
Third, and perhaps most importantly, the mix of jobs did change quite a bit for this group.
Total jobs increased, but jobs in animal slaughtering and processing were smaller in 2019 than in
2010 and they were higher in construction and food services. The animal slaughtering and
processing sector has much larger multipliers than the other two sectors. In 2019, the multiplier
was on the order of 3.4, compared to construction (2.1) and food services (1.3). As a result, the
overall jobs impact on the Omaha MSA was smaller for this immigrant subgroup in 2019 relative
to 2010.
Overall, however, the impacts are generally larger, suggesting that the immigrant
community still plays a substantial role in Nebraska’s economy.
State Contributions and Cost Comparison
In general, it appears that the native-born population has been quite consistent in paying
into public coffers by about as much as they draw from public services. Table 10 summarizes the
key differences between the 2019 fiscal story and the 2010 fiscal story.
24
Table 10
Fiscal Costs/Contributions Comparison (in percentages)
Native Born
Total Contributions
Total Costs
Ratio
2010
1.1
1.1
0.98
Foreign Born
2019
94.2
94.8
0.99
2010
4.3
4.1
1.05
2019
5.8
5.2
1.1
Latin American and
Caribbean Born
2010
2019
2
2.6
2
2.1
1
1.2
Source: Author's estimates drawn from various sources.
The immigrant population has not only consistently contributed more to the state in taxes
than it draws out in services, but we have also seen some increase in the proportion of contributions
to costs. This is particularly the case with the Latin American and Caribbean group, whose ratio
increased from 1.0 in 2010, to 1.2 in 2019.
CONCLUSION AND FUTURE RESEARCH
This study has attempted to quantitatively measure the impact of immigrant populations on
the Omaha MSA and Nebraska economies with some attention paid to Latin American immigrant
groups.
From this analysis, it is clear that immigrant groups do contribute significantly to the MSA
and state economies, both from their spending behavior and by providing labor. Moreover, based
on what we can measure, there is little evidence to support the idea that immigrant groups draw
more from public programs than they pay in, when compared to the native-born group. Some
evidence seems to suggest that immigrant groups pay in more than they draw out, while the nativeborn group seems to pay in just about the same as they draw out.
It should always be acknowledged that there are limitations to this research approach. First,
the issue of documented versus undocumented immigrant populations is important, at least from a
public sector perspective. From an economic impact assessment, assuming (reasonably) that
immigrants have similar incomes and exhibit similar spending habits irrespective of legal status,
then the expenditure multipliers will be the same. Moreover, if this undocumented group is
employed in similar jobs to those documented immigrants, then again, the multipliers will be the
same. Unfortunately, detailed data is sparse. However, if one did have data on employment and
population characteristics for the undocumented immigrant group, then one could reasonably
25
estimate their impact as a percentage of the impact values measured in this report.12 In short, from
the economic impact perspective, there may be little to gain from focusing on the undocumented
immigrant group unless more reliable detailed income and expenditure data can be found to refine
any direct effect measurements.
Second, the fiscal impact may be a useful avenue for future research. While Pearson and
Sheehan (2007) and others have articulated that undocumented immigrants do pay property, sales,
and income taxes, and tend to access the medical care system at rates much lower than Nativeborn citizens, there are still too many unknowns, particularly at the regional level, about the nature
and extent of the undocumented immigrant population to make any definitive conclusions. Hence,
more research here may be in order.
Third, since it is clear that the sectors where immigrants are finding employment is
changing over time, it would be beneficial to assess the total production impact of the immigrant
population across all sectors. Focusing on the impact that the immigrant population makes through
their direct employment in construction, animal slaughtering and processing, and food services is
instructive since these sectors tend to hire many immigrants. However, this dynamic may be
changing. If so, the impacts will change. Such a production assessment involving all sectors in
the economy is a tall order to be sure. But it would be beneficial to undertake.
12
This is possible due to the inherent linearity of IO models. For example, if data revealed that the total undocumented
population was 20% of the total foreign born population in 2019, then the resulting total spending impact of this group
would be estimated at 20% of the foreign born’s total impact.
26
BIBLIOGRAPHY
Borjas, G. J. (2003). The Labor Demand Curve Is Downward Sloping: Reexamining the Impact
of Immigration on the Labor Market. The Quarterly Journal of Economics, 118(4): 13351374.
Card, D. (2005). Is the New Immigration Really So Bad? The Economic Journal, (507), 300-323.
Decker, C.; Deichert, J., and Gouveia, L. (2012). The Economic Impact of Latin American &
other Immigrants in Iowa, Nebraska & the Omaha-Council Bluffs Metropolitan Area.
OLLAS Report 6. Omaha, NE: Office of Latino/Latin American Studies (OLLAS),
University of Nebraska at Omaha.
Fennelly, K., and Huart, A. (2010). The Economic Impact of Immigrants in Minnesota. Report to
the Minnesota Business Immigration Reform Coalition. Tucson, AZ: Hubert H.
Humphrey Institute of Public Affairs, University of Minnesota.
Gans, J. (2007). Immigrants in Arizona: Fiscal and Economic Impacts. Udall Center for Studies
in Public Policy, The University of Arizona.
Garvey, D., Espenshade, T., & Scully, J. (2002). Are Immigrants a Drain on the Public Fisc?
State and Local Impacts in New Jersey. Social Science Quarterly, 83(2), 537-553.
Kasarda, J. D. and Johnson, J. H. (2006). The Economic Impact of the Hispanic Population on
the State of North Carolina. Chapel Hill, NC: Frank Hawkins Kenan Institute of Private
Enterprise.
Miller, S. R., Martinez, R. O., and Faun, A. (2010). Measuring the Economic and Fiscal
Contributions of Michigan’s Latino Population. East Lasing, MI: Julian Samora Research
Institute, Michigan State University.
Pearson, B., and Sheehan, M. F. (2007). Undocumented Immigrants in Iowa: Estimated Tax
Contributions and Fiscal Impact. Mount Vernon, IA: The Iowa Policy Project.
27
APPENDIX A
AMERICAN COMMUNITY SURVEY PUBLIC USE MICRODATA SAMPLE
Many of the values used in this report use data from the Public Use Microdata Sample
(PUMS) from the U.S. Census Bureau’s 2015-2019 American Community Survey (ACS).
Nationally, the ACS samples nearly 3 million addresses each year, resulting in nearly 2 million
final interviews. In addition to the housing units, the ACS includes approximately 1 in 40 persons
living in group quarters.
The annual ACS sample is smaller than that of the Census 2000 long-form sample, which
included about 18 million housing units. As a result, the ACS needs to combine population or
housing data from multiple years to produce reliable numbers for small counties, neighborhoods,
and other local areas. To provide information for these areas, each year the ACS provides 5-year
estimates. The primary advantage of using multiyear estimates is the increased statistical
reliability.
The PUMS file includes detailed country of origin information to aggregate foreign-born
Nebraska residents who come from Latin American and Caribbean countries, including, among
others, Mexico, Cuba, Jamaica, and the Dominican Republic. Out total foreign-born group
includes both those from Central/South America as well as the rest of the world. Table A1 below
identifies the country of origin for the delineations used in this study.
28
Table A
Place of Birth - Country Breakdown
Latin American and Caribbean
Latin
Caribbean
America
Argentina
Antigua &
Barbuda
Bolivia
Bahamas
Brazil
Barbados
Chile
Bermuda
Colombia
Costa Rica
Cuba
Dominican
Republic
Ecuador
El Salvador
Guatemala
Haiti
Honduras
Mexico
Nicaragua
Panama
Paraguay
Peru
Uruguay
Venezuela
Rest of World
Europe & Canada
Asia & Middle East
Canada
Albania
Afghanistan
Bangladesh
Africa, Australia & Pacific
Islands
Algeria
Cameroon
Armenia
Azerbaijan
Belgium
China
India
Iran
Hong Kong
Indonesia
Iraq
Cape Verde
Ethiopia
Ghana
Egypt
Eritrea
Guinea
Israel
Jordan
Kazakhstan
Laos
Japan
Korea
Kuwait
Lebanon
Kenya
Morocco
Senegal
Somalia
Liberia
Nigeria
Sierra Leone
South Africa
Belize
Dominica
Grenada
Guyana
Bulgaria
Czech Republic
Estonia
France
Austria
Belarus
Bosnia &
Herzegovina
Croatia
England
Finland
Georgia
Jamaica
St. Kitts-Nevis
St. Lucia
St. Vincent & the
Grenadines
Surinam
Trinidad &
Tobago
Germany
Hungary
Ireland
Latvia
Greece
Iceland
Italy
Lithuania
Malaysia
Nepal
Philippines
Singapore
Myanmar
Pakistan
Saudi Arabia
Sri Lanka
Sudan
Uganda
Australia
Micronesia
Tanzania
Zimbabwe
Fiji
New Zealand
Macedonia
Netherlands
Moldova
Northern Ireland
Syria
Thailand
Taiwan
Turkey
Tonga
Samoa
Norway
Portugal
Russia
Slovakia
Sweden
Yugoslavia
Ukraine
Poland
Romania
Scotland
Spain
Switzerland
Uzbekistan
Yemen
Vietnam
29
APPENDIX B
CALCULATING DIRECT SPENDING INJECTIONS FROM INCOME DATA.
AFTER-TAX INCOME
To calculate after-tax income, we generated an effective federal and state income tax rate
by using mean income measures for our demographic groups and applied various marginal tax
rates as supplied by a variety of sources on marginal tax rates. We obtained data on federal
marginal tax rates from the following website: https://taxfoundation.org/2019-tax-brackets/.
Nebraska tax bracket information was found at https://www.tax-brackets.org/nebraskataxtable.
We then applied these tax rates to various levels of income up to the level of mean personal
income. These rates are available upon request. An additional income deduction is the payroll tax.
This is roughly 15%, and it is assumed that half this tax is borne by workers.
Applying these three deductions gives us a measure of after-tax income. This is done by
taking the total income for each group in each area and calculating:
After tax income = (Before tax income from ACS) *(1-Taxfed-Taxstate-Taxpayroll)
Remittances
Once these after-tax figures are calculated, we need to deduct the income immigrant
populations tend to send to their region of origin, i.e., remittances, as these represent leakage from
the local economy. Recent data on remittances at the state level is not available. To proxy this, we
collected data from the World Bank on remittances from the US to other countries. This data can
be found at Migration and Remittances Data (worldbank.org). To this data, we calculated an
average US immigrant’s remittance per year using a total US immigrant population figure from
Pew Research (https://www.pewresearch.org/hispanic/2020/08/20/facts-on-u-s-immigrants/).
Once this figure was calculated, we estimated this value’s share to after-tax personal
income for Nebraska, available from ACS. This amounted to 13.26%. Hence, we deduced from
after-tax income for each immigrant group this percentage:
After remittance income = (After tax income) *(1-0.1326)
30
Local Spending
Finally, we need to determine how much of the after-remittance income was spent locally
and how much was spent outside of the region. When spending leaves the local economy, it is
counted as a “leakage” that does not impact the local economy, but rather the economy where the
money is spent. For instance, when online purchases are made, perhaps through Amazon, such
orders are likely being filled elsewhere by workers in other states, etc. This is a type of leakage.
The modeling software employed, IMPLAN, provides estimates of local (or regional)
purchasing coefficients (RPCs). These coefficients estimate the percentage of spending on goods
and services that occurs locally. For example, grocery stores have a 99% PRC in the Nebraska
economy, indicating that nearly all the grocery spending takes place within the state. RPCs vary
by industry so using IMPLAN we found the average RPC value for both the Omaha MSA and
Nebraska. This was approximately 80%. Therefore, to get to the after-tax, after remittance, local
spending that we use to determine the total spending impact, we deducted 20% from after
remittance spending.
Local spending = (After remittance income) *(1-0.20)
This was done for each immigrant group, leaving us with the direct injection spending figures
reported in Table 2.
Distributing Income Throughout the Economy
With aid from IMPLAN, a set of figures was developed that estimated, for a given income
range, the share of one dollar’s worth of expenditure on each of a set of 344 industrial sectors. For
instance, individuals earning between $30,000 and $40,000 per year spent 1.6% of their disposable
income in the electricity generation sector. These expenditure shares were derived from a variety
of different sources, such as Consumer Expenditure Survey publications provided by the US
Bureau of Labor Statistics (see, http://www.bls.gov/cex/home.htm) and the Bureau of Economic
Analysis (http://www.bea.gov).
Once this distribution is in place, we use IMPLAN to generate the resulting indirect,
induced, and total impacts.
31
APPENDIX C
SECTORS USED TO CAPTURE THE IMPACT OF EMPLOYMENT IN
CONSTRUCTION, ANIMAL SLAUGHTERING AND PROCESSING, AND FOOD
SERVICES.
Within IMPLAN there are a number of construction, animal slaughtering and processing,
and food services sectors. These don’t map exactly to the ACS delineation, so we proxy each of
these three sectors using the following IMPLAN sectors. Once in place, we can use the resulting
multipliers to calculate the indirect and induced effects from the employment figures for each
immigrant group from ACS.
Construction
•
•
•
•
Construction of new single-family residential structures
Construction of new multifamily residential structures
Construction of other new residential structures
Maintenance and repair construction of nonresidential structures
Animal Slaughtering and Processing
•
•
•
Animal, except poultry, slaughtering
Meat processed from carcasses
Rendering and meat byproduct processing
Food Services
•
•
•
Full-service restaurants
Limited-service restaurants
All other food and drinking places
32
APPENDIX D
CALCULATIONS OF PUBLIC CONTRIBUTIONS AND COSTS ESTIMATES
As indicated in the text, the fiscal impact analysis focuses on state-level tax contributions
from, and state-level public expenditures on, Native-born, foreign-born, and Latin American and
Caribbean born persons in Nebraska in 2019. Offering a complete ledger of all costs and
contributions is beyond the scope of this analysis. However, we were able to construct estimates
for certain sources of tax contributions as well as certain prominent public expenditure categories.
Tax contributions estimate state income tax, sales tax, and gasoline tax generated from each
demographic group for 2019. Public expenditure estimates capture state spending on public
assistance, Medicaid, and education for each demographic group. Since this does not reflect a
complete set of costs and contributions, dollar value comparisons can be misleading. That said, a
comparison based upon percentage costs and contributions from each demographic group can offer
some insight.
In this appendix, we describe the data sources and procedures necessary to estimate the
costs and contributions that comprise our fiscal analysis.
Contributions
Income Taxes
These estimates represent income taxes paid out of income to state government only.
Details regarding the state tax rates employed and data sources used are discussed in Appendix B.
Sales Taxes
The sales tax figures were based on expenditures in certain key consumer spending
categories as defined by the US Bureau of Labor Statistics’ Consumer Expenditure Survey, 2019.
(CES: www.bls.gov/cex/). These categories were:
•
•
•
•
•
•
food away from home
alcoholic beverages
utility fuels and public services
household operations
housekeeping supplies
household furnishings and equipment
33
•
•
•
•
•
•
•
apparel and services
vehicle purchases (net outlay)
other vehicle expenses
entertainment
personal care products and services
tobacco products and smoking supplies
miscellaneous items
The CES offers expenditures estimates at the national level broken down by household
income category. From this, we obtained a percent of total consumer expenditures that are
generally subject to sale taxes. This is solely based on income.
We linked these income categories to the average income data we obtained from the ACS
for Native-born, foreign-born, and Latin American and Caribbean born groups. The percent of
total consumer spending subject to sales tax in 2019 (the “sales tax percentage”), according to the
CES, was:
Latin American and Caribbean born income earners:
Foreign-born income earners:
Native-born income earners:
44.45%
45.62%
45.19%
We then applied these percentages to the local spending (after tax, after remittances) income:
Local sales taxable spending = (local spending) *(1-sales tax percentage)
Since Nebraska’s sale tax rate is 5.5%, when then applied this tax rate to the local sales taxable
spending figure to obtain sales tax revenue generated for the state:
Sales tax revenue = (local sale taxable spending) *(0.055)
Once this is done for the Native-born, foreign-born, and Latin American and Caribbean born
groups, each group’s share of total sales tax revenues is calculated. These percentages are shown
in Table 7.
Gasoline Taxes
The gasoline consumption tax figures were calculated as follows. We used the CES to
determine the percent of consumer spending on gasoline for each income group. We linked these
income categories to the average income data we obtained from the ACS for Native-born, foreign-
34
born, and Latin American and Caribbean born groups. The percent of gasoline spending subject to
tax in 2019 (the “gas tax percentage”), according to the CES, was:
Latin American and Caribbean born income earners:
Foreign-born income earners:
Native-born income earners:
3.42%
4.15%
3.94%
From https://taxfoundation.org/state-gas-tax-rates-2019 we found that the 2019 state tax
per gallon of gasoline was 30.6 cents. From https://neo.ne.gov/programs/stats/inf/97.htm we
determined that the average price per gallon of gasoline in 2019 in Nebraska was $2.49. to calculate
each group gasoline tax contribution to the state we simply calculated:
Gasoline tax revenue = [(local sale taxable spending) * (gas tax percentage)/$2.49] *(0.306)
Note: dividing by the price of gasoline provides us with an estimate for gallons purchased. We
then applied the gas tax since the tax is based on gallons purchased, not the dollars spent.
Once this was done for the Native-born, foreign-born, and Latin American and Caribbean
born groups, each group’s share of total gas tax revenues was calculated. These percentages are
shown in Table 7.
Costs
Public Assistance
We obtained from the ACE the number of Nebraskans receiving public assistance for each
native and immigrant group. Public assistance and supplemental income come directly from the
ACS. Also, from the ACS, we found that the state of Nebraska spent $294.14 million on public
assistance. This total figure was then multiplied by the share of each immigrant group’s number
of recipients.
Once these dollar values are calculated, each group’s share of total public assistance was
calculated. These percentages are shown in Table 7.
Education
Educational expenditure estimates were constructed based on each native and immigrant
group’s school-aged population, aged 5 to 17, obtained from the ACS for Nebraska. We obtained
35
2019 estimates for state per-pupil expenditures for both Nebraska and Iowa from The National
Education Association Rankings & Estimates: Rankings of the States 2019 and Estimates for 2020
(see the following website: www.nea.org/research-publications). These data indicate that in 2019
per-pupil expenditure was $12,075 in Nebraska. Of the, it was estimated that the state contributed
46.9% in 2019. Applying these estimates to the population figures listed above provides the
estimates for education expenses made by each state in 2019. Shares were then calculated and
presented in Table 7.
Medicaid
ACS provides estimates of those receiving Medicaid benefits in Nebraska, broken down
by native and immigrant status. We obtained an estimate of the total state-level Medicaid spending
for fiscal year 2019 from the Kaiser Family Foundation (www.kff.org/statedata/custom/). For
Nebraska, in 2019 state contributions to Medicaid totaled $1.02 billion. Applying this figure to the
percent of each native and immigrant’s percent to total state Medicaid recipients provided a dollar
estimate of each group’s Medicaid spending. The shares of each group’s spending are shown in
Table 7.
36
Previous OLLAS Reports
A complete list of the OLLAS Reports and their pdf files are available at www.unomaha.edu/ollas
1.
Gouveia, Lourdes and Powell, Mary Ann (2005). Educational Achievement and the Successful Integration of Latinos
in Nebraska: A Statistical Profile to Inform Policies and Programs. OLLAS Special Report No. 1. Omaha, NE:
Office of Latino Latin American Studies (OLLAS) at the University of Nebraska at Omaha.
2.
Casas, J.F., Ryan, C.S., Kelly-Vance, L., Ryalls, B.O., Ferguson, A., & Nero, C.L. (2005). Examining the impact of
parental involvement in a dual language program: Implications for children and schools. OLLAS Special Report
No. 2. Omaha, NE: Office of Latino/Latin American Studies (OLLAS) at the University of Nebraska at Omaha.
3.
Benjamin-Alvarado, Jonathan (2006). Latino Political Participation in Nebraska: The Challenge of Enhancing Voter
Mobilization and Representation. OLLAS Special Report No. 3. Omaha, NE: Office of Latino/Latin American
Studies (OLLAS), University of Nebraska at Omaha.
4.
Arbelaez, Maria (2007). Religion and Community: Mexican Americans in South Omaha (1900- 1980). OLLAS
Special Report No. 4. Omaha, NE: Office of Latino/Latin American Studies (OLLAS) at the University of Nebraska
at Omaha.
5.
Decker, Christopher with Jerry Deichert and Lourdes Gouveia. (2008). Nebraska’s Immigrant Population.
Economic and Fiscal Impacts. OLLAS Special Report No. 5. Omaha, NE: Office of Latino/Latin American Studies
(OLLAS), University of Nebraska at Omaha.
6.
Benjamin-Alvarado, Jonathan (2009). Project Animate: Promoting Student Civic Participation through Latino Voter
Mobilization. OLLAS Special Report No. 6. Omaha, NE: Office of Latino/Latin American Studies (OLLAS) at the
University of Nebraska at Omaha.
7.
Lourdes Gouveia, Jonathan Benjamin-Alvarado, Yuriko Doku, Alejandra Toledo, and Sergio Sosa (2010). The
Omaha Site: Migrant Civil Society Under Construction, Reports on Latino Immigrant Civic Engagement, No. 8.
Washington, DC: Woodrow Wilson International Center for Scholars.
8.
Decker, Christopher with Jerry Deichert and Lourdes Gouveia. (2012). The Economic Impact of Latin American &
other Immigrants in Iowa, Nebraska & the Omaha-Council Bluffs Metropolitan Area. Omaha, NE: Office of Latino/
Latin American Studies (OLLAS), University of Nebraska at Omaha.
9.
Ramos, A., Rajaram, S., Gouveia, L., Doku, Y., Toure, D., Zhang, A., & Manske, S. Health Profile of Nebraska’s
Latino Population. (2013). A collaborative effort of the College of Public Health at the University of Nebraska
Medical Center, the Office of Latino and Latin American Studies at the University of Nebraska at Omaha and the
Office of Health Disparities and Health Equity at the Nebraska Department of Health & Human Services
10.
Gastón, María Teresa, Lourdes Gouveia, Christian Espinosa Torres, Clare Maakestad and Christopher C. Blue.
(2013). Invisible & Voiceless: Latinos in Council Bluffs, Iowa: Executive Summary. Omaha, NE: Office of Latino/
Latin American Studies (OLLAS). University of Nebraska at Omaha.
11.
Aliaga Linares, Lissette. (2014). Latino Businesses in Nebraska: A Preliminary Look. Omaha, Nebraska: Office of
Latino/Latin American Studies (OLLAS) at the University of Nebraska at Omaha.
12.
Aliaga Linares, Lissette. (2014). A Demographic Portrait of the Mexican-Origin Population in Nebraska.Omaha,
Nebraska: Office of Latino/Latin American Studies (OLLAS) at the University of Nebraska at Omaha.
13.
Cogua-Lopez, Jasney, Lissette Aliaga-Linares and Lourdes Gouveia. (2015). Latinos throughout the City: A
Snapshot of Sociodemographic Differences in Omaha, Nebraska. Omaha, NE: Office of Latino/Latin American
Studies (OLLAS) at the University of Nebraska at Omaha.
14.
Aliaga Linares, Lissette and Jasney Cogua-Lopez. (2016). Latinos and the Economic Downturn in Nebraska:
Demographic and Socioeconomic Trends 2005-2013/2014. Omaha, NE: Office of Latino/Latin American Studies
(OLLAS) at the University of Nebraska at Omaha.
15.
Novak, E. A., Kulig, T. C., & Doña-Reveco, C. (2021). Human trafficking and the T visa process: Insights from
legal representatives working with victims from Latin America. OLLAS Report #15. Office of Latino/Latin
American Studies, University of Nebraska at Omaha. https://doi.org/10.32873/uno.dc.ollas.1016.
37
Office of Latino/Latin American Studies (OLLAS)
University of Nebraska at Omaha
OLLAS Report #16
ISSN 2768-1963
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