Budget Incidence of Immigration into Switzerland: A Cross-Section Analysis of the Public Transfer System

The paper deals with the distributional effects of immigration into Switzerland. Focusing on the government budget, it explores empirically whether resident foreigners are a burden or a benefit to the Swiss public transfer system. The estimation is based on the 1990 Consumer Survey by the Swiss Statistical Office. It is shown that, in 1990, the presence of resident foreigners has not put additional strain on the public coffers. On the contrary, there was a favourable financial effect for the native population. A detailed analysis of this profitable transfer result shows the influence of: age, qualification of the household head, and the number of children in the household. Furthermore, the sample composition is an important determinant of this outcome.