The Fiscal Impact of Immigration in France: A Generational Accounting Approach

Abstract The objective of this study is to use both static and dynamic frameworks to compare the benefits that immigrants draw from the public system with their contributions through the taxes that they pay. The main conclusion of this paper is that the impact of immigration on welfare systems is weak. Thus, if we compare, on a given date, immigrants' global contribution to the public administration budget with the volume of transfers they receive, immigrants appear to be relatively favoured by the redistribution system. At the same time, even if immigrants seem to pay less taxes and receive more transfers than natives, the difference in distribution between the two populations, with a higher concentration of immigrants in the active age groups and a sparser concentration among the net beneficiaries of the social transfer system, leads to a slightly positive long‐term impact of immigration on public finances. However, the impact of immigration remains very slight compared with the global effort that would have to be undertaken to reduce budgetary imbalances.