CORRECTION TO ARTICLE BY ROTHMAN AND ESPENSHADE

                                 Julian L. Simon

             In their useful Fall, 1992, article, "Fiscal Impacts of

        Immigration to the United States", Eric S. Rothman and Thomas J.

        Espenshade made some incorrect statements about my work on the

        tax-and-transfer-payment situation of immigrants that may mislead

        the reader and wrongly cause one to think that my work was in

        error or not soundly done.

             1.  Rothman and Espenshade say that there was an "omission

        of older immigrant groups" and that this "gives a sense of incom-

        pleteness to Simon's findings" (p. 386).  In fact, I did not omit

        any groups.  The data on the oldest group that R and E refer to

        were presented in my original published report to the Select

        Commission on Immigration and Refugee Policy in 1981, and are

        stated in full in my 1989 book.  These data were omitted from my

        1984 article against my will because of lack of space.  The

        editors decided that because I wrote in the article that the data

        are not relevant to the analysis, they could safely be omitted.

        I worried then that omitting the data would lead to some

        confusion, and that has indeed occurred, but I had to defer to

        the editors' decisions.

             As I explain in the article and the book, however, the data

        are not relevant for two reasons:  First, at any reasonable

        discount factor, economic events 25 years and more in the future

        have little effect on current present-value-based decisions.

        Even more decisive, on average the older immigrants have produced

        grown children who pay into the system in the form of taxes the

        balancing amounts that their parents are withdrawing as transfer

        retirement payments; the immigrants' excess payments during their

        working lives represent a one-time windfall to the equilibrium

        system.

             The only alternative to omitting the older persons'

        transactions with the system (as I did) would be to include the

        transactions with the public coffers of their children (and

        grandchildren and ...!), because those persons whom the

        immigrants beget are a part of the stream of effects of their

        immigration.  This obviously would be unwieldy at best.

        Proceeding as I did in my analysis is a more convenient and

        analytically acceptable substitute.

             2.  Rothman and Espenshade write that "Simon's method of

        adjusting for public goods consumption is misleading because it

        includes immigrants' public goods tax contributions as net

        benefits to natives without including natives' own contributions

        as net costs to themselves" (p. 386).  Here R and S repeat an

        error made by George Borjas in his Journal of Economic Literature

        review of my 1989 book, a correction to which has been accepted

        for publication in that Journal (and see also Simon, 1995, a

        correction in another medium in which Borjas again made the same

        erroneous criticism).  Borjas assumed that I was simply comparing

        the expenditures on immigrants from the public coffers, as

        measured by the survey data, to the contributions of immigrants

        to the public coffers in the form of their own tax payments.

        Such a comparison would have been flawed by the omission of

        public goods from the survey data.  But I did not do that, as

        shown in my original tables.  In fact, I compared the net

        balances in the flows for natives and immigrants against each

        other, hence allowing for public goods usage on a very "generous"

        assumption with respect to immigrants.

             3. Rothman and Espenshade fault me for not breaking down the

        data by country of origin - "failure to separate immigrants by

        nationality" (p. 386).  The nationality variable may be of

        interest in other contexts.  But it is not relevant for a policy

        decision of the sort that arises in immigration legislation with

        respect to the number of persons that will be allowed into the

        country. There is no necessity for including such a variable, and

        I therefore do not include it because I feel no need to provide

        information on ethnicity and race that might distract attention

        from the variables of policy interest.

             4.  Rothman and Espenshade write that my "Differentiating

        immigrants by year of entry... is an effective method for

        demonstrating the effects of assimilation".  I appreciate the

        words of praise, but my aim was not to show the effects of

        assimilation but rather to fulfill my assignment to the Select

        Commission - to make the appropriate assessment to assist in

        making policy decisions about the number of immigrants that are

        to be admitted to the United States.  That assignment influenced

        all research decisions made in the study.

                                    REFERENCES

             Rothman, Eric S., and Thomas J. Espenshade, "Fiscal Impacts

        of Immigration to the United States", Population Index, Vol. 58

        #3, Fall, 1992, pp. 381-415.

             Simon, Julian L. "What Immigrants Take From and Give To the

        Public Coffers," in U.S. Immigration Policy As The National

        Interest, Staff Report of the Select Commission on Immigration

        and Refugee Policy, Appendix, (Washington GPO, 1981).

             ___ "Immigrants, Taxes, and Welfare in the United States."

        Population and Development Review, Vol. 10, No. 1, March 1984.

             ___ The Economic Consequences of Immigration to the U. S.

        (Oxford: Basil Blackwell, 1989).

             ___ "Tired, Poor, On Welfare" (cont'd)", National Review,

        April 3, 1995

             ___ "A Correction of a Review by Borjas", Journal of Econom-

        ic Literature, forthcoming.


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