stimulate the local low skilled labor market. It is also possible that employers, in the face of abundant low-skill

workers, may choose production processes which are more labor intensive than otherwise would have been.

These various factors would explain the small negative wage effect that the native low-skill workers observed

as a result of immigration.

Another potential disruptive effect is the impact on state and local government budgets. Many of the costs

imposed by immigrants are costs that arise in state-run programs, like the cost of public schooling and of

welfare benefits. However, many of the taxes that immigrants pay are federal taxes like income taxes and

Social Security taxes. Many immigrants do not own property (such as homes and cars), so they do not pay

property taxes, which are one of the main sources of state and local tax revenue. However, they do pay sales
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