Analysis for Cost Benefit

Purpose

The study is purposed to first attempt to account for the fiscal impact of refugee resettlement in the local government in the United States. The fiscal analysis, in this case, is very different from the benefit and cost analysis and the other economic studies that track the flow of the public resources used and generated by a particular group. The research is an effort to assess public expenditures and receipts instead of a cost-benefit analysis. This research aims to determine whether the financial burden of hosting refugees outweighs the financial benefits to the local community. Do refugees and the economic activity they bring to local governments in the United States pay more taxes than they cost to provide public services?

Method

The researchers used the case study technique to analyze or estimate the monetary effect of refugee resettlement on local government in the United States. Case study methods allowed for in-depth analysis of data in their original setting. The case study approach often employs a relatively small sample size or a localized research region. Real-world case studies provide insight into research methods that probe issues of the present via in-depth contextual examination of a small number of events and their interconnections. As Yin (2017) explains, case studies are “an empirical inquiry that assesses subjects in real-world situations.”. The researchers used the combined interpretive and evaluative case study in this study. Through an interpretive case study, the researcher will interpret the data, and evaluative, the researcher will make conclusions about the phenomenon found in the data. Since the study is trying to find the cost and benefits of the refugees in the local governments, the study used Philadelphia County in Pennsilvian as our case study to answer the research questions and help meet the study’s objectives. The study’s secondary sources data are from the census data, American survey community, sates Department refugee data details.

Fiscal analysis case study Philadelphia

To estimate or evaluate the cost of the refugee settlement, the study used the characteristics of refugee families who arrived between 2000 to 2016 to define the typical family. Naturally, as refugees resettle with their families, they differ in various ways. Some might be only adults, while others might have kids, one or several. Finding the actual cost of each family might take time and effort. Due to this, the study uses the costs to evaluate the fiscal impacts of refugee settlement in the local government in the United States. The study examines how well refugees integrate into locals in the United States communities. The table below shows the characteristics of refugees resettled in Philadelphia from 2000 to 2016; this will help answer whether the refugees are an economic burden or a benefit. The first approach to evaluating the fiscal impacts of refugees is calculating the costs incurred by the local refugee centers and agencies in the school districts or Medicaid. The present study will evaluate and estimate the costs incurred to settle the refugees in different ways from the period of

Refugees’ characteristics 2000 to 2016

Source: U.S. Census Bureau, American Community Survey, one-year estimates, 2017

HIAS Pennsylvania refugees center

Pennsylvania refugee centers play a vital role in resetting programs in the United States, and refugees have positively contributed to the Pennsylvania communities. In 2016 the refugee centers and communities within Pennsylvania welcomed 4% of the refugees arriving in the United States. HIAS Pennsylvania provides support, helps the refugee settlement and also offers help to low-income immigrants. It serves counties like Lancaster, Philadelphia, and others. The Department of State provides one-time-payment benefits to the refugees for about $2375 per individual refugee to the local organizations, of which $1,275 is accessible for agencies to utilize and fund the critical direct assistance needs of refugees, like food, rent, and clothing. Apart from that, whether the refugee centers like HIAS Pennsylvania operate themselves is a cost to the community. However, the news articles indicate that Grants from foundations and other nonprofit funds privately fund HIAS Pennsylvania.

Additionally, the county tax dollars help support these refugee centers’ activities. The activities in refugee centers, apart from the refugees who settle, will benefit the community more than the costs. The primary funding for the refugee center comes from the Pennsylvania Department of Public Welfare serves as the refugee resettlement office for the state. The vital programs service the refugees with cash, mecalcaid, access to English classes, and vocational jobs helps.

Source: https://www.causeiq.com/organizations/hias-pennsylvania,231405597

Although some funds in the While some money in the HIAS Pennsylvania comes from local tax revenues, the $3.38 Education in Philadelphia school district budgets. The expense of education, which is partially subsidized by the federal government, plays a crucial role in making immigration a net cost for states and local governments, according to research on immigration and refugee programs. Philadelphia is not an exception; like many other educational systems, it relies on federal, state, and municipal government revenue. Although most refugees are over 30, most families have children who attend regular schools. Therefore, the research included the cost of general education for refugees (as determined by a fiscal analysis) and English instruction for refugees. In the literature review, we looked at different studies, like the accounting approach and others, and the debate revolves around whether education should be included. Some could argue that education is a right, like the freedom to vote, which should not be accounted for in any economic analysis. Education in many societies they are just an investment not only for refugees but also for the local communities. From this perspective, the cost of education should be included in the fiscal impact analysis since they are actual costs mainly funded by the locals through taxes. The upcoming benefits of the education expenditures, such as taxes for future economic activities for adults and refugees, are included in this study. The study made assumptions that all the refugees will need education, and they reside in Pennsylvania’s public school district.

Nevertheless, the local community only bears some burden of educating the refugees and their kids. Since they are at least three sources of education funding in the united states, local, state and federal, this study aims to evaluate the local fiscal effect. Thus, it is significant to differentiate the cost that the locals contribute to education. For instance, according to the data from the United States Department of Education year 2019 -2020, Pennsylvania’s public school districts mainly receive funds from two significant sources, local and government taxes, and only a few amounts come from federal and other sources. Pennsylvania’s school districts’ expenditures on education were catered through locally raised taxes, that is, 37.5%, which is below the state average for the local contribution of 45.5 %. Past studies have used the average per-student cost of education to predict the cost of extra learners. This approach doubles the number of pupils. It doubles the total education costs, a concept that economics refers to as a constant return to scale.

Nevertheless, adding refugees to district schools increases the cost by less than the individual student average. Measuring the marginal cost for extra students is a complex task since it could differ depending on the factors, such as the students requiring additional resources like teachers and classrooms. The study used the marginal average for each student, agreeing that some costs cannot change when the extra students join the School. The probability is very low in most cases for the different school students to require additional principals or building and maintenance costs. Nevertheless, in this case, Philadelphia, according to Pew data, from 2009 to 2019, the population increased by 121% due to the influx of immigrants, mainly refugees. Thus, the building and maintenance costs could increase slightly due to the refugee resettlement. In a close review of the Philadelphia school district annual budget from 2019 to 2020, the locally projected budget was $1,612,930,000(44%). Where 56% might be influenced by refugees and 45% by the expenditures like instructional, employee benefits and staff support-The, the extra-student cost is calculated by multiplying the 56% adjustment factor of the local share of the total spending divided by the number of learners enrolled (Source: CCD Public School district data for the 2021-2022 school year). The census data for 2019 to 2020 the number, 2019 the total local school district expenditure was $7,825,593,600. Using the 2019 -2020 student enrollment of 7989 students in the district, the change per student local cost is $2,349.

Consequently, individual student costs might increase due to refugees with special needs that require extra expenditures from local funds. Additionally, most refugees require additional help, mainly from local funds. Philadelphia City School District spends $13,263 per student each year, and overall, the district expenditure of $70059 million goes to instructions like providing training for Second language ESL; since refugees make up 15% of the students in the Philadelphia district schools, such population will not require additional teaching staff since there is no influx of refugees.

Fiscal Benefits Analysis

For any element in this study to be categorized as a fiscal benefit, any element that seems like a benefit must be evaluated as go through a similar analysis as the cost: it means it must increase the local revenues over what was existing in the absence of the refugees. For instance, increased tax revenues in a business, let us assume the refugees own it; it is not a benefit if the sales decrease in another company in the tax obligation. On the same, hiring individuals who later pay taxes on local usage might not be a benefit if the individuals work in a different place. Nevertheless, in the two scenarios, if the spending in the locality increases, it can be categorized as a benefit even though it is more complex to quantify the benefits than the costs. In the study following other previous studies, we understand that the students go to School and that there are public support programs. Even though certain advantages are less obvious than others, the resettlement of refugees in Philadelphia has had some evident benefits for the local people. For example, the influx of new residents has increased local taxable income and sales taxes. Studies have also shown that once migrants get established in their new communities, they eventually buy homes and pay property taxes. In this section, we discuss some of the assumptions and methods used to calculate the different monetary advantages to the local community.

 Income

How active refugees are in local labor markets is a key indicator of the positive impact they will have on local government coffers. We cannot just assume that the advantages to refugees are straightforward. The extent to which refugees engage in the labor markets is a crucial factor in the economic contribution of refugees to the local fiscal picture. While it is true that refugees’ monetary contributions do not go directly to the local economy, estimating the value of refugee resettlement is a valuable exercise. Such knowledge would ideally come from the numerous refugees who have made Philadelphia their home. The average earnings and employment rates of refugees in the United States could be straightforward.

However, data on the work and earnings of refugees in particular regions is quite scarce. When refugees finally arrive at their destination, they usually immediately go to work. After a period of adaptation during which they study English, they join the labor markets as adults and accept any position for which they are qualified. Refugees in Pennsylvania may benefit from HIAS’s full range of services, including assistance in securing stable work, access to healthcare, and instruction in the English language. However, very few job opportunities can give such opportunities for advancing. Utilizing the information the HIAS Pennsylvania refugee center provided, we can pick first employment situations such as salaries and job positions.

In most cases, the refugee will keep their first job for a while, and most of the refugee centers keep checking the refugees during the initial year. From there, very few can be traced concerning the refugee’s labor supply. As a result, we need to create salary profiles using inferential data like occupation and welfare status. In 2019, for instance, the median immigrant family, which includes refugees, had a higher income than the median household of native-born Americans. Although on a smaller scale, Coughlan and Owens’s previous investigations provide more clues as to where successful immigrants have landed, earned citizenship, and had the financial means to buy a home.

The analysis sample was the most successful in indicating that some refugees are finding higher-paying jobs. The Coughlan and Owens analysis does not illustrate the typical earnings path; however, it shows that most refugees do comparatively well in the local markets. As an alternative, this analysis used the regular wages from the jobs data that the HIAS Pennsylvania refugee center provides for the refugees. From 2019 to 2020, the average starting pay was 13.25 on July 1, 2019. Hence, let us assume that the starting salary of refugees in the first year was $13,25; this is estimated to be an annual income of $26,500. Following the Philadelphia wage rate increase trends, let us assume that the wage will increase by 2.5% annually. Household income depends on the wage rate, number of workers, and hours worked. Our Average worker per household from our refugees’ characteristics is 1.38. According to Coughlan and Owens-Manley’s ( 2006:23) research, the higher percentage of average workers per house means that households with adult refugees can work full-time and different jobs. Since very little is known about the specific refugees, we use the literature and studies on immigrants from the census data from 2017 to 2020 that indicate that the labor force participation of at least 482,600 immigrants worker, 7% composed of the state labor market,12% of immigrants comprise of the city labor force, and 67% of the migrants including the refugees contribute to a labor force that more than the share of local communities that is 65% immigrants median household income was about $39,700, close to that of U.S.-born Philadelphians.

We estimated the Philadelphia market labor using the statistics in 2016 latest; in this assumption, we used all the immigrants to stand on like refugees; the estimate shows that one out 5 Philadelphian’s labor force was a refugee, with the highest number of working in the different service jobs in health care, education and hospitality. According to the survey results, the immigrants’ labor grew to 66000 from 2000- 2016. Thus, this was a double increase compared to the native US-born workers. Consequently, using the Phew survey results, we assume the number of immigrants in that period was refugees, and their household income was $39,700. Hence, this was very close to the Philadelphians. Using Pew’s survey data, we also assume that the poverty rate among the immigrants was similar to that of the refugees, so we assume the refugee rate in Philadelphia was 24%, slightly below the native Americas. Taking this assumption from Phew survey data, we can conclude that refugees’ income earning is high and can responsibly generate revenue for the local government.

Discussion

The fiscal impact of refugee resettlement in the united states has become a complicated issue. In this case, study, Philadelphia has a huge history of welcoming refugees. However, the costs of providing services and support to refugees are high. Using the data from the U.S Census Bureau and American community survey, it took much work to determine the refugees confidently. One of the main areas of concern in the cost analysis was the cost of providing home and the district school education costs; thus, we calculated the cost incurred by the refuges centers like HIAs; in the cost analysis the refugees the district education school cost for refugees was found, and the study revealed that the charge was not that huge. To analyze the fiscal benefit, the area of concern was the income earning for the refugees in Philadelphia using the refugee’s center wages rates estimations, and we included the household rate of working refugees. We can conclude from the refugee center budget that the refugees illustrated high relocation costs and public education help. However, this changed as the refugees continued to work. To answer the research question on the fiscal impact of refugee settlement on the local government. The result of these assumptions shows that refugee resettlement in Philadelphia has continued to burden the local government; using the public education cost, the refugees depend mainly on the locals to get support for their education.

Nevertheless, the assumptions on the income and labor forces of the refugees, the findings of this study show that these refugees have a positive fiscal impact on the local government; the study illustrates that in Philadelphia, the refugees contribute a significant amount of the revenue from their income. The refugees have a higher rate of working hours compared to the Natives, and this contributes significantly to the tax revenues of the local government. Even though the refugees use public services, if we compare their local government spending and the income they generate, the income balance will be huge, meaning that refugee resettlement in Philadelphia is not a burden to the local government. Although the study used minimal variables like income, labor force, refugee centers spending, and educational costs, the estimates could have some errors or biases from the researcher. Consequently, relating to other empirical studies such as Tatah et al. (. 2016), the study reveals that if the vast numbers of refugees that live in the refugee centers’ labor markets decrease, the fiscal impact on the locals could be more damaging. However, this will mainly depend, for instance, on how Philadelphia the refugees can access the services of the refugee centers and other support from the government. Since if the majority of the refugees settle, the refugee camps and other humanitarian actors may help the local government with additional support that they might start using. Hence to have a very positive fiscal impact on refugee resettlement in the local government, there is a need to have more support from private donors, human trains and others to provide services to the refugees.

Conclusion

The present study has used the available data to evaluate the fiscal impact of the refugee settlement in the local government. Although there was limited data on refugee resettlement, very little data was specific on the refugees, like the costs and revenues the refugee centers get. Since refugees face various challenges when they settle, in this research paper, we have shown how the refugee centers in their support can help the refugees to determine in the local government and offer support that reduces the fiscal negative. From the refugee resettlement, Philadelphia’s provincial government has unlocked various potential benefits from their settlements, such as more outstanding taxes and improved labor market s outcomes. In short, once the United state hosts the refugees, it will benefit the nation to let them work more instead of controlling them. Thus this can be particularly true in international relations where the international partners work with host countries so that they can agree on implementing policies that will benefit and adjust the cost, which is an actual and very debatable issue.

Moreover, such policies might include the freedom of migration and systems that will help both the natives and refugees to succeed in their labor markets. Consequently, a key takeaway of this study is that the fiscal impact of the refugees on the local government is mainly influenced by the income revenue the refugees can access. The choices of the host countries can affect this depending on international relations policies that will grant the refugees the freedom to work freely without restrictions; this reduces their chances of relying on donors, states and local governments. Philadelphia, although the data was massive, the refugees in the region have gained some leverage and superior results on their social and economic. However, this has declined with time, and their household income, employment and dependency on public help are just average compared to other counties. In general, there are some costs that are associated with public services and the support the refugees receive.

Recommendation

Our investigation concludes that, based on the results, the following should be done. Raise the amount spent on resettling refugees: While the research indicated that migrants had a net beneficial effect on local economies, they also need assistance adjusting to their new surroundings. One way to assist in meeting these demands and give refugees a fighting chance is to increase financing for resettlement programs. Help them learn English and find work fast, and you increase the odds that they’ll be able to support themselves and contribute to the local economy. Refugees may succeed in these endeavors with the aid of language and employment programs.

Further studies

To better understand the future of the many factors impacting local government from the resettlement of refugees, further research has to be done. Expand studies on the long-term effects of resettling refugees. More research is needed to fully understand the long-term repercussions of the study’s emphasis on the immediate financial effects of resettling refugees. Longitudinal research on the effects of refugees on economic variables, including home prices, crime rates, and more, is needed.

References

https://www.education.pa.gov/K-12/Refugee%20Education/Pages/Refugee-School-Impact-Grant-(RSIG).aspx

https://www.causeiq.com/organizations/hias-pennsylvania,231405597

https://www.phillytrib.com/news/local_news/school-district-introduces-3-4-billion-budget/article_839dc523-60cc-5b18-b5c5-197bd2d98d18.html