Welfare Use Since Welfare Reform
Graphic Queen
An Examination of Trends in Immigrant
Welfare Use Since Welfare Reform
March 2003
By Steven A. Camarota
http://www.cis.org/articles/2003/back503.html
One of the most controversial provisions of the 1996 welfare reform
law barred many legal immigrants from using certain welfare programs.
This report evaluates that effort by examining trends in immigrant and
native use of the four major welfare programs that constitute the core
of the nation’s welfare system: Temporary Assistance to Needy Families
(TANF), food stamps, Supplemental Security Income (SSI), and Medicaid.
The findings show that use of TANF and food stamps has declined
significantly for both immigrant and native households and also that
the gap has narrowed between the two groups. However, considering all
four programs together shows that the gap between immigrant and native
households has not narrowed, and in fact has widened slightly.
Moreover immigrant households comprise a growing share of all
households using the welfare system. Our analysis finds that:
• In 1996, 22 percent of immigrant-headed households used at least one
major welfare program, compared to 15 percent of native households.
After declining in the late 1990s, welfare use returned to 1996 levels
by 2001, with 23 percent of immigrant households using welfare
compared to 15 percent of native households. (Figure 1)
• The persistently high rate of welfare use by immigrant households is
almost entirely explained by their heavy reliance on Medicaid, use of
which has actually risen modestly. In contrast, their use of TANF has
fallen significantly, from a little under 6 percent in 1996 to
slightly over 2 percent in 2001. Food stamp use has also declined
significantly, from about 10 percent to 6 percent. These rates are now
only modestly above those of natives. (Table 1)
• The decline in immigrant TANF and food stamp use has not resulted in
a significant savings for taxpayers because it has been almost
entirely offset by increases in the costs of providing Medicaid to
immigrant households.
• The total combined value of benefits and payments received by
immigrant households from welfare programs is almost unchanged in
inflation-adjusted dollars, averaging almost $2,000 in 2001, about 50
percent higher than natives. (Figure 2)
• Continuing high rates of immigrant welfare use, coupled with the
rapidly growing immigrant population has meant that the number of
immigrant households using welfare has increased by 750,000 since
1996, with immigrant households now accounting for 18 percent of all
households using a major welfare program, up from 14 percent in 1996.
(Figure 3)
• Estimating welfare use for only households headed by legal
immigrants also shows a significant decline in TANF and food stamps
use. However, continued heavy reliance on Medicaid has meant that the
percentage of legal immigrant household using welfare remained
constant at about 22 percent in the 1996-2001 time period and the
average value of payments and benefits received by legal immigrants
also remained constant at roughly $2,200 a year. (Table 1)
• Households headed by illegal aliens receive welfare, primarily
Medicaid, on behalf of their U.S.-born children. In 2001, for example,
the value of benefits and payments received by illegal alien
households averaged over $1,000. This is considerably less than the
$2,200 received by legal immigrant households on average, so one
unintended consequence of legalizing illegal aliens would be a
significant increase in welfare costs. (Table 1)
• Although refugees do make extensive use of welfare programs, they do
not account for a large enough share of the legal immigrant population
to explain continued heavy use of welfare by legal immigrants.
Excluding households headed by refugees, 21 percent of non-refugee
legal immigrant households used at least one major welfare program in
2001, compared to 15 percent of natives. (Table 1)
• Consistent with previous research, this study finds that use of
welfare programs does not decline significantly the longer immigrants
live in the country. In 2001, households headed by immigrants who had
been in the country for more than 20 years continued to use the
welfare system at significantly higher rates than natives. (Figure 5)
• The high rate of welfare use associated with immigrants is not
explained by their unwillingness to work. In 2001, almost 80 percent
of immigrant households using welfare had at least one person working.
• One of the main reasons for the heavy reliance of immigrants on
welfare programs is that a very large share have little education. The
American economy offers very limited opportunities to such workers,
and as a result many immigrants who work are still eligible for
welfare because of their low incomes.
• Use of the welfare system varies significantly by country. In 2001,
immigrants from Mexico, the Caribbean, and Central and South America
had the highest use rates, while those from South Asia, Western
Europe, Sub-Saharan Africa, and Canada had the lowest. (Table 4)
• Immigrant households make extensive use of the welfare system in
almost every state and metropolitan area with a large immigrant
population. The highest use rates for immigrants are found in
California, New York, Texas, and Massachusetts. (Table 5)
The overall findings of this study indicate that if the goal of
welfare reform was to reduce immigrant use only of TANF and food
stamps, then it has been a success. Use of these two programs has
declined significantly, both in absolute terms and relative to native
households. However, if the goal was to save taxpayers money and
reduce dependence on government, then that goal remains unmet. This is
primarily due to immigrant households’ continued heavy use of
Medicaid, by far the most expensive welfare program. Because of the
large and growing costs of Medicaid, the average value of payments and
benefits received by immigrant households has changed very little
since 1996. Another important finding in the report is that, contrary
to popular belief, most immigrant households using welfare have at
least one person who works. However, the large share of immigrants
with relatively little education means that many working households
are still able to qualify to receive welfare programs. Educational
attainment is not the only factor contributing to the heavy use of
welfare associated with the foreign-born. It appears that even
households headed by skilled immigrants make much more extensive use
of the welfare system than do similarly skilled natives. Welfare use
simply appears more attractive to immigrant households than to native
households. (In this report, the term immigrant and foreign-born are
used synonymously.)
Provisions of Welfare Reform
Policy makers and the public have long been concerned about the
possibility of immigrants becoming a burden to taxpayers. Partly
because there was strong evidence that immigrant welfare use had been
on the rise for at least a decade, Congress included several
provisions in the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) designed specifically to reduce immigrant
eligibility for most welfare programs. The legislation denies most
types of means-tested assistance to immigrants who arrived after
August of 1996 until they have lived in the country for a certain
number of years. Use of welfare programs was also limited for many
non-citizen immigrants already living in the country. An important
part of the immigrant provisions of PRWORA was an attempt to make
sponsors provide assistance if immigrants were unable to support
themselves. A number of excellent studies exist summarizing the
immigrant provisions of PRWORA.1 The key point here is that the
changes were intended to reduce the high rates of welfare use
associated with immigrants, with the intent of saving taxpayers money
and avoiding immigrant dependence on government.
Welfare Reform May Have Had Little Effect. From the outset, several
factors were likely to limit the impact of the immigrant provisions of
PRWORA. First, states were given a great deal of latitude to cover
otherwise ineligible immigrants with their own resources, and many
have done just that. Moreover, many immigrants could avoid the new
restrictions by becoming citizens; there is strong evidence that
citizenship rates increased most significantly in the late 1990s among
those immigrant groups with the highest welfare use rates.2 In
addition, Congress repealed some restrictions on immigrant use of
welfare in 1997, such as the ban on SSI and Food Stamp use by
immigrants who arrived prior to August 1996. The mandated waiting
period for post-enactment immigrants, however, remained on the books.
Perhaps the most important factor mitigating the immigrant provisions
of welfare reform was that the U.S.-born children of immigrants
retained the same eligibility as any other American citizen. Thus many
immigrants were able to continue to receive benefits on behalf of
their U.S.-citizen children. This is important because the majority of
children in immigrant households were born in the United States. This,
coupled with the fact that the welfare system is primarily geared to
providing assistance to low-income families with children, means that
the overall impact of PRWORA on welfare use by immigrant households
was much less than might have been expected by those who championed
the changes with regard to immigrants.
In April of 2002, Dan Griswald of the Cato Institute, a proponent of
both high immigration and the welfare cutoff to immigrants, said in an
op-ed in the Witchita Eagle that “Since passage of the Welfare Reform
Act of 1996, welfare use by immigrant households has plunged.” But
does the available evidence support such a conclusion? An examination
of welfare use by immigrant households between 1994 and 1998 by
Harvard economist George Borjas indicates that welfare reform may not
have had a significant impact on overall use of the welfare system,
especially outside of California. The purpose of this study is to
update the work of Dr. Borjas by examining trends in immigrant welfare
use since welfare reform using the latest data available. With
Congress poised to re-authorize the changes made in the welfare system
sometime this year, it is our hope that this study will provide
additional information to better inform the upcoming debate.
Methodology
A number of Census Bureau reports and academic studies have examined
immigrant reliance on cash and non-cash assistance programs. Like the
Census Bureau, and other academic work that has examined this
question, this report looks at welfare use by immigrant and native
households.3 Households are defined as immigrant or native based on
the nativity of the household head. As already indicated, this report
uses the terms immigrant and foreign-born synonymously.4 Immigrant
households are primarily comprised of immigrants and their young
children. In 2001 for example, 91 percent of persons in immigrant
households were either immigrants themselves or the child of an
immigrant parent (under age 21). This study, like those cited above,
therefore can be seen as an examination of welfare use for immigrants
and their children.
Use of four major welfare programs are examined: Temporary Assistance
to Needy Families (TANF)5, food stamps, Supplemental Security Income6
(SSI), and Medicaid. These programs represent the core of America’s
welfare system. Households are considered to be using welfare if at
least one person in the household is enrolled in one or more of these
programs. While the report focuses on the percentage using welfare, we
also calculated the average value of payments and benefits received by
immigrant and native households. This is a relatively simple
calculation because the survey used in this study asks respondents the
value of the cash or food stamp payments they receive. For persons on
Medicaid, the Census Bureau provides an estimate of the insurance
value for each individual using the program. One limitation of relying
on respondents for information about the size of the payment they
receive is that, with the exception of Medicaid, it does not include
the administrative costs of the program. A second potential problem is
that respondents may understate the value of the benefits they
actually received. This problem, however, does not prevent comparisons
with natives because there is no evidence that immigrants are more or
less likely than natives to under-report welfare use or the size of
the payments they receive.7 Moreover, the problem of under-reporting
does not prevent an examination of change over time in the use rates
of immigrants relative to natives, unless the tendency to under-report
changed more for one group than the other.
Data Source. While some administrative data exist on the number of
people using welfare programs, such information is often limited. For
example, in most instances no information is publicly available on
whether the recipient of the program is foreign-born. Therefore this
study, like almost all studies of its kind, relies on an analysis of
survey data collected by the Census Bureau: the March Current
Population Survey (CPS). The CPS is one of the largest surveys
collected by the government and includes 217,000 persons, 23,000 of
whom are foreign-born.8 Each household in the CPS is interviewed by a
Census Bureau employee. Participants are asked a series of
socio-economic questions, including whether they are immigrants and
about use of welfare for each person in their households during the
previous calendar year. Thus data collected in March 1997 provides
information about welfare use in 1996, data collected in March 1998
provides information about welfare use in 1997, and so on. Although
the survey is collected each month, the March CPS is considered the
best source for persons born outside of the United States because it
includes an extra-large sample of minorities.
Of course, no data source is perfect, and as already mentioned, there
is the well-known problem of under-reporting of welfare use in all
surveys of this kind. However, there is no evidence that there is a
significant difference between immigrant and native rates of
under-reporting. Another limitation in the data is that there is
almost certainly some undercount of immigrants, especially those in
the country illegally. Nonetheless, the CPS is still the best source
of information on the American population, including the foreign-born.
For this reason, both government and non-government researchers have
made extensive use of the survey for many purposes including
examinations of income, unemployment, poverty, health insurance
coverage, and welfare.
Legal Versus Illegal Immigrants. In this report we concentrate on the
results for immigrant headed-households overall. However, in several
parts of the study we further divide immigrant-headed households based
on the immigration status of the household head. These divisions
include separate analysis of households headed by all legal
immigrants, those headed by refugees, those headed by legal
non-refugees, and those headed by illegal aliens. These divisions are
helpful in understanding immigrant welfare use because eligibility for
programs is often linked to immigration status. In fact, the immigrant
provisions of welfare reform only applied to legal immigrants who were
not yet citizens. Illegal aliens were supposed to be ineligible for
welfare programs even prior to welfare reform. As discussed above, all
children born to immigrants in the United States, including those born
to illegal aliens, are automatically American citizens, and thus have
the same welfare eligibility as any other citizen. Thus it is
important to see how welfare use varies for different types of
immigrant households. For example, it is sometimes suggested that only
refugees make extensive use of the welfare system. Other observers
point to illegal aliens as the primary problem. By dividing immigrant
households based on immigration status we hope to answer some of these
questions.
Determining Immigration Status. The CPS does not ask the foreign-born
if they are legal residents of the United States. However, the INS,
Census Bureau, and others have used socio-demographic characteristics
in the data to estimate the size of the illegal population by picking
out respondents who have a high probability of being in the country
illegally. To determine who is legal and illegal in the survey, this
report uses citizenship status, year of arrival in the United States,
age, country of birth, educational attainment, sex, welfare receipt,
and marital status. We estimate that in the March 2002 CPS there were
7.9 million illegal aliens. (This estimate only includes illegal
aliens captured by the March CPS, not those missed by the survey.)
This estimate is similar to those prepared by the Census Bureau, the
Immigration and Nationalization Service (INS), and the Urban
Institute9. It should be obvious that there is no definitive means of
determining whether a respondent in the survey is an illegal alien.
Even estimates prepared by government agencies are at best highly
educated guesses about illegal immigration. Different assumptions
will, of course, lead to somewhat different results. In fact, the
Census Bureau and the INS have arrived at somewhat different estimates
for the overall size of the illegal population. Despite the inherent
problems in identifying illegal aliens, the analysis of illegal aliens
in this study is consistent with previous research and should provide
a good idea of the difference between households based on the
immigration status of the household head.
Findings
Little Decline in Welfare Use Rates Overall. Figure 1 reports the
percentage of households headed by immigrants and natives using at
least one major welfare program. It also shows an estimate for legal
immigrants only. Figure 1 shows that in 1996, 21.9 percent of
households headed by a foreign-born individual used at least one major
welfare program, compared to 15.3 percent of native households. Rates
for the foreign-born and natives declined somewhat to 19.7 percent and
13.3 percent respectively by 1999 before rising again to 22.7 percent
for immigrants and 14.6 percent for natives in 2001. A very similar
pattern exists for legal immigrants. After a modest decline in the
late 1990s, use of welfare by legal immigrant-headed households
returned to 1996 levels. Overall, Figure 1 shows that after a modest
decline, welfare use rates for immigrants and natives are essentially
back to where they were in 1996 when welfare reform was passed. This
is true both for total use rates and those relative to native-headed
households. At least in terms of overall welfare use of the four major
welfare programs by immigrant households, welfare reform seems to have
had only a modest short-term effect.
Significant Decline in TANF and food stamp Use. While the share of
immigrant households using at least one welfare program has changed
little since 1996, this is not the case for two programs in particular
— Temporary Assistance to Needy Families10 (TANF) and food stamps.
Table 1 provides detailed estimates of welfare use for the four major
welfare programs by native and immigrant households based on the
immigration status of the household head. (Average payment figures are
also included in the table and will be discussed later in the report.)
The table shows that use of TANF and food stamps by immigrant-headed
households declined significantly. Use of TANF among immigrant
households fell from 5.7 percent in 1996 to 2.3 percent in 2001, and
food stamp use has also declined significantly, from 10.1 percent to
5.7 percent. By itself the decline in TANF and food stamp use would be
important, but perhaps even more important for policy makers concerned
about immigrant use of welfare, the gap between immigrant and native
use of these two programs has also narrowed. Whereas in 1996 immigrant
use of TANF was 1.8 percentage points higher than that of natives, in
2001 it was 0.7 percentage point higher. For food stamps, immigrant
use was 2.1 percentage points higher than that of natives in 1996, but
by 2001 only 0.3 percentage points separated immigrant households from
native households. Turning to use of TANF by legal immigrants, the gap
fell from 2.4 percentage points to 1.1 percentage points. The table
also shows there was a 2.2 percentage point gap between legal
immigrant households and natives in food stamp use in 1996, but by
2001 it had shrunk to 0.5 percent points. While use of these two
programs is still somewhat higher among immigrant households, the gap
with native households has narrowed considerably.
No Savings for Taxpayers. The fiscal costs associated with welfare use
are not, of course, simply a matter of the percentage of the
foreign-born and natives using welfare programs; there is also the
question of the size of the benefit households receive. As already
discussed in the methodology section, households participating in the
Current Population Survey who use welfare programs are asked the
dollar value of the benefits they received.11 Thus, it is a relatively
simple calculation to add together the value of payments and benefits
received by both types of households and then average them over all
immigrant and native households. Figure 2 reports the average welfare
payment, in constant 2001 dollars, received by households headed by
all immigrants, by legal immigrants only, and by natives. The dollar
values are for the total amount in payments and benefits received for
immigrant and native households divided by each type of household. (In
addition to all immigrant and legal immigrant households, Table 1
reports payments for refugee, non-refugee, and illegal-alien
households.) Figure 2 shows that, as is the case with the percentage
using welfare, there was a decline in the average payment received by
both immigrant and native households through 1999. However, since 1999
the size of the payment has increased so that in 2001 the average
payment was very similar, in inflation-adjusted dollars, to what it
was the year of welfare reform. This is true for immigrant households
overall, legal immigrant households, and native households.
Again, the reason this situation exists is that the costs of providing
Medicaid rose significantly over this time period, offsetting the
substantial declines in use of TANF and Food Stamps by the
foreign-born found in Table 1. Figure 2 is important because it shows
that households headed by the foreign-born are more likely to use
welfare programs, and that the size of the average payment they
receive is also larger than that of natives. It could be that the
higher average welfare use rates in Figure 1 and Table 1 do not
translate into higher welfare costs, because the average payment
immigrant households receive when averaged across all households is no
higher than the average payment received by native households. This
could result if immigrant households that are on welfare receive, on
average, a much smaller payment than native households that are on
welfare. But this does not seem to be the case. For average costs to
look as they do, the value of payments and benefits received by
immigrant households on welfare must be very similar to that of native
households on welfare. The higher average payments in 1996 and 2001
therefore result from higher use rates among the foreign-born.
Payments for Only Those on Welfare. It should be remembered that the
payment figures in Figure 2 and Table 1 are for all native and
immigrant households, including those who do not receive any of the
four major welfare programs studied here. Confining our analysis to
only those households that receive payments indicates that in 1996 the
value of payments and benefits received for immigrant households on
welfare was $9,403, compared to $8,640 for native households (in 2001
dollars). By 2001, the average value of the payment and benefits
received by immigrant households on welfare was $8,726, compared to
$9,079 for native households on welfare. Thus, in 1996 immigrant
households on welfare received an average payment that was about 4
percent more than that of native households on welfare, but by 2001
they received an average payment that was about 4 percent less than
natives on welfare. The fact that immigrants on welfare now receive a
payment that is slightly less than natives on welfare suggests that
one possible effect of welfare reform was to reduce the average
payment and benefit received by immigrant households on welfare. Of
course, it should be noted that this decline is somewhat offset by the
slight increase, from 21.9 to 22.7 percent, in the share of immigrant
households using at least one major welfare program.
Turning to legal immigrants, we find that in 1996 legal immigrants on
welfare received payments and benefits totaling $10,342, compared to
$8,640 for native-headed households using welfare. By 2001 the average
payment for legal immigrant households on welfare was $9,963, compared
to $9,079 for native headed households on welfare. Thus, in 1996
households headed by legal immigrants received a payment that was
about 20 percent higher than that of natives, but by 2001 it was about
10 percent higher than that of natives. While a significant gap still
exists, the gap in payments for legal immigrants and natives on
welfare has clearly narrowed. Moreover, as already shown, legal
immigrants are more likely to use at least one major welfare program
in the first place. Put simply, legal immigrants are more likely to
use welfare, and they continue to receive larger payments when they
are on welfare, though that size of the payment has declined since
1996.
Immigrant Households Account for Growing Share of Welfare Case Load.
Another way of thinking about trends in welfare use is to examine the
number of immigrant households using the welfare system. If welfare
reform had solved the problem of heavy immigrant reliance on welfare
programs, then we might expect to see a decline or at least very
little growth in the number of immigrant households using the welfare
system. Figure 3 shows this is not the case. The number of immigrants
using at least one major welfare program has steadily increased, with
the exception of a small drop in 1997. The figure shows that in 1996,
2.3 million immigrant households used the welfare system and that this
number grew by 750,000, to over three million by 2001. Figure 3 also
shows that about 60 percent of the 750,000 increase was accounted for
by legal immigrants. Figure 4 examines trends from a slightly
different point of view, the immigrant share of all households on
welfare. In 2001, immigrant-headed households accounted for almost 18
percent of all households on welfare, up from a little over 14 percent
in 1996. It is important to realize that the immigrant population has
grown substantially since 1996. Of course, this did not necessarily
have to result in an increase in the number using welfare. It could
have been the case that the increase in the total number of immigrant
households was offset by a decline in the percentage using welfare.
However, as Figure 1 and Table 1 show, the share of immigrant
households using welfare has not declined. This fact coupled with the
very high level of new immigration since 1996 has meant that immigrant
households account for a growing share of the welfare caseload. Thus,
in a very important sense, the goals of the immigrant provisions of
welfare reform have failed. Immigrants account for a growing share of
the welfare caseload. This was certainly not the intent of welfare
reform.
Most Immigrant Households on Welfare Work. Some of the political
motivation for reducing immigrant eligibility for welfare in 1996 was
due to a belief that welfare use by immigrants is an indication of
laziness or an unwillingness to work. However, such observations are
misplaced in some important respects. The nation’s welfare system
primarily goes to working households. Those who are employed, or their
children, are often still eligible for welfare programs if their
income is low enough. Moreover, many people who are unemployed for
part of the year can also use welfare programs. In 2001, 67 percent of
households that used at least one major welfare program during the
year had at least one person working. In fact, more than half of these
households had two or more people working during the year. For
households headed by immigrants, 79 percent using welfare had at least
one person working during the year. These households still used the
welfare system because even though there was at least one worker
present, their incomes were still low enough to qualify for welfare.
Among native households, 65 percent had at least one person who
worked.
Table 2 considers this question from the reverse perspective. Instead
of looking at the percentage of households on welfare with at least
one worker, the table examines the percent of working households on
welfare. The table shows that 20.3 percent of households headed by an
immigrant where at least one person worked used welfare in 2001. For
native households 12.1 percent used welfare, and for legal immigrants
19.6 percent used welfare. Table 2 shows that the presence of someone
who works is no guarantee that the household will not use welfare
programs. In fact, the difference between use rates for all households
and those that work is small. This is true for immigrants in general,
legal immigrants, and native households. Overall, the table confirms
the basic findings found in Figure 1 and Table 1: Immigrant households
are significantly more likely to use the welfare system than are
native households regardless of whether someone in the household
works. This is true for both 1996 and 2001.
Most Immigrant Households Work. It should also be noted that in 2001,
86 percent of all households headed by a foreign-born person had at
least one person working, compared to 78 percent of native-headed
households. Thus, if holding a job resulted in no welfare use, then
the foreign-born should have somewhat lower use rates than natives,
instead of the higher use rates they actually have. The key is not
simply having a job, but rather having a job that pays enough to avoid
using the welfare system. This points to an important issue
surrounding the immigration debate. Many employers argue for high
levels of immigration on the grounds that they have jobs, and filling
those jobs with immigrants really does not concern anyone else.
However, the findings in Table 2 indicate that cheap labor often comes
with a very high cost. Allowing in large numbers of legal immigrants
may hold down costs for employers by increasing the supply of labor,
but the policy can also create significant costs for taxpayers. These
costs go unnoticed by employers because they are borne by all
taxpayers. It may make far more sense, therefore, for the United
States to have less immigration, thereby increasing wages for American
workers and reducing welfare costs. Employers, of course, may not wish
to increase what they pay their workers or to invest in labor-saving
devices, but given the fiscal implications of immigration, the nation
as whole may well be much better off with less immigration. At the
very least, the fiscal costs associated with immigrant workers needs
to become an integral part of the immigration debate. Simply looking
at their impact on the workforce is not sufficient.
Low Educational Attainment Only One Reason. Consistent with previous
research, the findings of this report show that immigrant use of the
welfare system remains well above that of natives. Since unwillingness
to work is clearly not the explanation, we must look elsewhere. Table
3 reports welfare use in 2001 based on the immigration status and
educational attainment of the household head. Not surprisingly, the
higher the education level of the household head, the lower the
welfare use rate. Less than 10 percent of immigrant households headed
by a college graduates, for example, used a welfare program in 2001.
In contrast, 36 percent of immigrant households headed by someone who
has not completed high school used welfare. The same pattern exists
for legal immigrants, with almost 42 percent of households headed by a
legal immigrant without a high school education using the welfare
system, compared to slightly less than 10 percent of legal immigrants
with a college degree. For natives, almost one-third of households
headed by a high school dropout used welfare, compared to less than 5
percent of households headed by a college graduate.
Table 3 also shows that even after controlling for education, a very
sizable gap exists between immigrant and native use of the welfare
system. One way to measure the extent to which differences in
educational attainment explain differences in welfare use is to
compare what immigrant welfare use would be if they had the same
educational attainment as natives but retain their use rates by
educational level. In other words, what would immigrant welfare use be
if immigrants were as educated as natives, but their use of welfare
remained the same by educational category as shown in Table 3? This
calculation shows that the overall welfare use for immigrant
households would be 20.4 percent rather than 22.7 percent. This
suggests that about 30 percent of the gap between immigrant and native
households in welfare use is explained by the lower educational
attainment of immigrants. Most of the phenomenon, however, seems to be
explained by other factors. One possible explanation for this
situation is that more immigrant households have children and the
nation’s welfare system is primarily designed to help families with
children. It may also be that receiving welfare is seen as more
socially acceptable in some immigrant communities than among natives.
While some research on this question already exists, this is clearly
an area in need of further study.
Welfare Use Over Time. Figure 5 shows the percentage of immigrant
households using at least one major welfare program, based on how long
the household head has lived here. Consistent with previous research,
welfare use actually increases significantly with duration of stay in
the United States for at least 20 years after arrival. Even immigrant
households headed by someone who came to the country more than 20
years ago use welfare programs at a significantly higher rate than
natives. In 2001, almost 21 percent of these long-time residents used
welfare, compared to less than 15 percent of natives. This is true
even though immigrants who arrived more than 20 years ago are on
average much older than the average native. To some extent,
assimilation for many immigrants means assimilation into the welfare
system. This is the case both for immigrants in general and for legal
immigrants.
Welfare Use by Region of Birth. Table 4 shows welfare use rates for
households headed by immigrants from different parts of the world. The
table shows that welfare use varies considerably based on where
immigrants are from. In 2001, immigrants from Mexico, the Caribbean,
Central America, and South America had the highest use rates, while
those from South Asia, Western Europe, Sub-Saharan Africa, and Canada
had the lowest. This is of particular interest because the
administration and Democrats in Congress had pushed for some kind of
amnesty for illegals from Mexico prior to the September 11th attacks.
While those proposals have moved to the back burner, at some point
they may reemerge. We estimate that in 2001, 37 percent of households
headed by legal Mexican immigrants used at least one welfare program
compared to 31 percent of those headed by illegal aliens. Clearly one
unintended consequence of an amnesty for Mexican illegals would be a
significant rise in welfare costs, with serious consequences for
public coffers.
Returning to Table 4, comparisons of 1996 with 2001 show that for
immigrants from almost every part of the world there was very little
change over time in use of the welfare system, with the exception of
Sub-Saharan Africa. Overall, Table 4 indicates that high rates of
welfare use are common among immigrants from many different parts of
the world. In 2001, only households headed by immigrants from South
Asia, Sub-Saharan Africa, Western Europe, and Canada had lower welfare
use rates than natives. These four regions account for only about 17
percent of all immigrants in the United States. So heavy dependency on
the welfare system appears to be a widespread problem among diverse
immigrant communities.
Welfare Use by State. Welfare use is not simply a national issue.
Although the federal government provides most of the funding for these
programs, state governments do bear a significant share of the cost of
the welfare system. Medicaid, for example, has become one of the most
costly items in most state budgets. Table 5 shows the percentage of
immigrant and native households using the welfare system in 1996 and
2001. In general, welfare use rates have changed little in most
states, both for immigrant- and native-headed households; however,
there are some exceptions. In Texas and Arizona welfare use among the
foreign-born has fallen significantly, and in Arizona this is true not
only in absolute terms but also relative to natives. In contrast, in
Colorado and Massachusetts there has been a substantial increase in
immigrant welfare use. Overall, Table 5 indicates that in most of the
nation’s top immigrant-receiving states, welfare use by immigrant
households remains much higher than of native households.
Table 6 reports the number of immigrant households receiving welfare
by state. In every state but Arizona, the number of immigrant
households using the welfare system increased significantly from 1996
to 2001. In some states there has been what can only be described as
an explosion in the number of immigrant households accessing the
welfare system. In almost every state, the number of immigrant
households on welfare has increased by more than 20 percent, and in
five, the number has increased by more than 25 percent. In contrast,
Table 6 shows that the number of native households using welfare has
been relatively stable since 1996 in most states. Nationally, while
the number of immigrant households using welfare has increased by
753,000 (33 percent), the number of native headed households on
welfare increased by 176,000 (a little over one percent). One of the
more interesting findings in Table 6 is that a significant number of
households headed by illegal aliens use the welfare system. There are
four states in which there are more than 50,000 households headed by
illegal immigrants using at least one major welfare program. Of
course, as already indicated, this is not so surprising since the
U.S.-born children of illegal immigrants have the same welfare
eligibility of any other American citizen.
Table 7 shows the average payment received by immigrant and native
households. Table 8 shows welfare use by program and immigration
status for the top-four immigrant receiving states. As is the case
nationally, Table 8 shows that for immigrant households in every
state, even those headed by illegals, Medicaid is by far the most
commonly used welfare program. This is certainly very bad news for the
states because Medicaid is not only the costliest welfare program, it
is also the program for which states must shoulder the largest share
of the costs. The very rapid increase in the number of immigrant
households using the welfare system, especially Medicaid, has almost
certainly strained state coffers across the country and played some
role in the current budget crisis of many states.
Welfare Use by Metro Area. Table 9 shows the percentage and number of
households using welfare for the nation’s largest immigrant-receiving
metropolitan areas. With the exception of Houston, the number and
percentage of immigrant households using at least one major welfare
program increased between 1996 and 2001 in every Consolidated
Metropolitan Statistical Area (CMSA) in the country, with the largest
numerical increases in New York, Los Angles, San Francisco, Dallas,
and Boston. While local governments bear only a modest share of the
cost for welfare programs, it is certainly not good news for
jurisdictions in these areas that immigration is significantly
increasing the welfare case load.
Conclusion
The primary finding of this report is that welfare use by immigrant
households remains much higher than that of natives. However, the mix
of programs used by immigrants, and natives for that matter, has
changed significantly since 1996. Use of TANF and food stamps has
declined significantly among the foreign-born since 1996, while
Medicaid use has risen somewhat. The enormous and growing cost of
Medicaid means that there has likely been little or no savings for
taxpayers. This is especially true when one considers the increase of
750,000 additional immigrant households using welfare programs.
Immigrant households account for 18 percent of all households using
the welfare system, up from just 14 percent in 1996. Thus in the most
important sense, welfare reform with regard to immigrants seems to
have failed. Or at the least, it has not generated the kind of savings
for taxpayers that its proponents hoped it would. Immigrant welfare
use remains high and they comprise a growing share of the welfare case
load, mainly because a very large share have little education and the
American economy offers very limited opportunities to such workers.
Factors Other than Welfare Reform to Consider. There are many issues
to consider when evaluating the trends in immigrant welfare use
explored in this analysis. For example, there was a strong economy
over this time period, and this moved many people from welfare to
work, as have all previous expansions. Of course, the economy affected
both immigrants and natives and so examinations of immigrant and
native use of the welfare system should still yield useful
comparisons. There is also evidence that Proposition 187 passed in
1994 in California, which targeted illegal aliens using welfare, might
have had what some have called a “chilling effect” on immigrants’
willingness to access welfare programs, even legal immigrants. In
terms of immigrants’ persistently high rate of Medicaid use, one must
also keep in mind that Congress significantly expanded eligibility for
Medicaid through the State Children’s Health Insurance Program (SCHIP)
in 1997. Finally, there is the question of whether native use of
welfare is the proper yardstick by which to measure immigrants. Some
may reasonably argue that because immigration is supposed to benefit
the United States, our admission criteria should, with the exception
of refugees, select only those immigrants who are likely to be
self-sufficient. Table 1 showed that even non-refugee legal immigrants
use a good deal more welfare than natives. None of these observations
change the fact that immigrant households are significantly more
likely to use welfare programs than native households, but they do
mean that when trying to determine the reasons for the changes in
immigrant welfare use since 1996, many factors must be considered
Immigrants Tend to Pay Less Taxes Than Natives. While not the focus of
this study, it should be obvious that while immigrants do use welfare,
they also pay taxes. However, because immigrants tend to have lower
incomes and larger families, they tend to pay less in taxes. The CPS
includes figures for the average federal income tax liability for all
individuals in the survey. In 2001, the average immigrant household
should have paid about $5,800 to the federal government; the average
native household should have paid over $7,000. These estimates
probably understate the difference between immigrant and native
households because many immigrants are in the country illegally and
are therefore more likely to avoid paying taxes by working off the
books. On the other hand, there are certainly taxes other than federal
income tax. States often get a large share of their revenue from sales
and real estate taxes. But again, since immigrants have significantly
lower incomes than natives, they typically purchase less and rent or
buy more modest housing, thereby generating lower average tax
payments. Moreover, welfare programs are primarily funded through the
federal income tax. The bottom line is that it does not appear that
the tax contributions by immigrants offset their heavy use of the
welfare system.
Curbing Eligibility. The attempt to reduce immigrant use of the
welfare system in 1996 represents a real-world social experiment, one
that has largely failed. In fact, because the number of immigrants has
been allowed to grow substantially since 1996, the total cost of
providing immigrant households with welfare programs has risen
significantly. Some may still argue that if only we made further
changes to the welfare system in general or in regard to immigrants
specifically, that this problem could be solved. But such proposals
are grossly unrealistic. Political realities make it very difficult to
exclude people from accessing social services once they are in the
country. For example, Congress repealed some restrictions on immigrant
use of welfare in 1997, not long after they had passed welfare reform.
State governments used the latitude they were given to cover otherwise
ineligible immigrants with their own resources, and most did so. It is
very doubtful that states with significant immigrant populations would
ever exclude large segments of their populations from programs like
Medicaid. Moreover, as already noted, becoming a citizen is a way to
avoid any restrictions on immigrant use of welfare. Perhaps the most
important factor mitigating the immigrant provisions of welfare reform
was that the U.S.-born children of immigrants retained the same
eligibility as any other American citizen. Thus many families receive
a host of benefits on behalf of their citizen children. There is no
possibility that welfare would be cut off to these American citizens.
If we wish to reduce welfare use associated with the foreign-born, we
are going to have to look at policy options other than denying access
to welfare programs.
Welfare Is Often a Subsidy for Employers. From the point of view of
the nation as a whole, it might make a lot more sense to reduce
immigration (legal and illegal) and thereby the supply of labor,
especially in unskilled jobs where immigrants are heavily
concentrated. This would not only reduce the number of immigrants
entering each year who access the welfare system, it would also cause
wages and benefits to rise for unskilled workers. This would make it
possible for many natives and legal immigrants already here to avoid
using the welfare system. Less immigration would also induce employers
to invest in labor-saving devices, and this too would have the benefit
of making for a more productive economy. Some may argue that there are
businesses that simply cannot afford to pay workers any more and still
stay in business. If this is the case, perhaps we should reduce
immigration and let such businesses fold. If such businesses can only
survive by paying poverty-level wages, creating huge costs for
taxpayers in the form of welfare payments to their workers, then
maintaining such an industry makes little sense. Welfare payments to
low-wage workers represent a large subsidy to business. For example,
if taxpayers provide health care in the form of Medicaid, then
employers do not have to provide health care. Of course, employers
find this a very desirable situation. Employers do not see the costs
of Medicaid because they are diffuse, borne by all taxpayers, while
employers have a very strong incentive to keep down their labor costs
by keeping immigration high. By providing workers with welfare and
other means-tested programs, taxpayers are in effect paying part of
the salary for these workers. Like any business receiving subsidies,
those who use unskilled labor will try very hard to retain them. The
fact that some businesses wish to retain this subsidy cannot, however,
justify the costs to taxpayers, or the reduction in wages for the
poorest American workers.
Change Immigration, Not Welfare. The failure of the immigrant
provisions of welfare reform to address the very real problem of high
rates of immigrant use indicates that another approach is needed.
Trying to cut immigrant families from welfare after they are here is
simply not working. Moreover, there is a very important question of
fairness. After all, while they may make smaller tax contributions on
average, immigrants still typically pay taxes from the moment they
arrive, so they should be able to access the programs they need. But
even more profoundly, allowing them into the country and then denying
access to programs everyone else is allowed to use sends the message
that they may come, but are not going to be treated like one of us.
The decision in 1996 to leave the level of immigration at record
levels and instead cut immigrants off from welfare programs can be
described as a high immigration/anti-immigrant policy. But there is
another set of policies that would almost certainly make more sense.
This approach may be described as apro-immigrant policy of low
immigration. That is, the United States could reduce the level of
legal and illegal immigration, moving to a system that selects
immigrants based primarily on skills and not whether they have a
relative already in the country, which is the basis of the current
system. As far as illegal immigration, better policing of the border,
monitoring temporary visitors, and penalizing employers who hire
illegals could significantly reduce illegal immigration. At the same
time, the nation could embrace a policy of treating immigrants as the
future Americans that they are, including extending them the same
welfare benefits as native-born Americans.
If we do not restructure our immigration policy, then the costs of
providing welfare to immigrant families will continue to increase.
Politicians can only ignore this problem for so long. At some point,
they will have to confront this issue and either try yet again to
restrict immigrant access to the welfare system, which has not worked,
or change immigration policy, admitting fewer immigrants likely to
need welfare in the first place.
End Notes
1 See the introduction of “The Impact of Welfare Reform on Immigrant
Welfare Use” by George J. Borjas, 2002, Center for Immigration
Studies. http://www.cis.org/articles/2002/borjaspr.html. The Urban
Institute as also done a number of studies looking at changes in
immigrant welfare eligibility which are at its Web site www.urban.org.
2 See Borjas, 2002.
3 In their bi-annual reports on the immigrant population, the Census
Bureau reports welfare use by household based on the nativity of the
household head. See for example, Figures 20-1, 20-2 and 21-3 in
“Profile of the Foreign-Born Population: 2000.” P23-206, U.S. Census
Bureau, December 2001.
http://www.census.gov/prod/2002pubs/p23-206.pdf.
Borjas, George J. and Lynette Hilton. “Immigration and the Welfare
State: Immigrant Participation in Means-Tested Entitlement Programs,”
Quarterly Journal of Economics, May 1996.
Also see Borjas, 2002.
4 The definition of foreign-born in this study is the same as that
used by the Census Bureau. The foreign-born are persons living in the
United States who were not U.S. citizens at birth. This includes
persons who are naturalized American citizens, legal permanent
residents (green card holders), illegal aliens, and a modest number of
people living in the United States on long-term temporary visas such
as students or guest workers. It does not include those born abroad of
American citizen parents.
5 The name of this program was changed in 1996 from Aid to Families
with Dependent Children (AFDC) to TANF. Throughout this report we use
the term TANF, even for 1996 when the program was still called AFDC.
Figures for TANF also include a small number of people receiving cash
assistance from state governments through general assistance programs.
6 Supplemental Security Income is a means-tested cash assistance
program for the blind, disabled, and indigent elderly.
7 Camarota, Steven A. “Assessing the Accuracy of Data on the
Foreign-Born From The American Community Survey: Task 4.” February
2001. This report was prepared for the Census Bureau under contract
and has not yet been released to the public. The report details
results of extensive focus groups with Census Bureau employees who
conduct survey interviews, almost all of whom worked on the CPS as
well as the American Community Survey. The interviewer felt strongly
that the foreign were not more reluctant to provide information about
welfare use.
8 These figures are for the March 2002 CPS; samples from earlier years
were smaller but still typically included 15,000 immigrants.
9 The INS estimate of 7 million illegals in 2000 can be found at
www.immigration.gov/graphics/aboutus/statistics/Ill_Report_1211.pdf
The Census Bureau estimate of 8 million illegals in 2000 report can be
found at www.census.gov/dmd/www/ReportRec2.htm (Appendix A of Report 1
contains the estimates).
A summary of the Urban Institute’s estimate of 8.5 can be found at
http://www.migrationinformation.org/Feature/display.cfm?ID=19.
10 Figures for TANF also include a modest number of people receiving
state sponsored general assistance programs.
11 The only exception is that persons on Medicaid are not asked the
value of their insurance. The Census Bureau has calculated the costs
of Medicaid for each person using the program.
--------------------------------------------------------------------------------
Steven A. Camarota is the Center for Immigration Studies' Director of
Research.
Perfesser White
Graphic Queen <graphicx...@xxxhotmail.com> wrote:
> Back Where We Started
> An Examination of Trends in Immigrant
> Welfare Use Since Welfare Reform
>
> March 2003
>
> By Steven A. Camarota
>
> http://www.cis.org/articles/2003/back503.html
Excellent find here, Queenie! The charts and graphs are great.
Thanks,
Perfesser WHite
~~~snipped only for bandwidth
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Graphic Queen
<prof....@whiteuniversity.org> wrote:
>In article <299540tc0ekp714pu...@4ax.com>,
> Graphic Queen <graphicx...@xxxhotmail.com> wrote:
>
>> Back Where We Started
>> An Examination of Trends in Immigrant
>> Welfare Use Since Welfare Reform
>>
>> March 2003
>>
>> By Steven A. Camarota
>>
>> http://www.cis.org/articles/2003/back503.html
>
>Excellent find here, Queenie! The charts and graphs are great.
>Thanks,
>Perfesser WHite
>
And it absolutely proves that the illegals aren't getting any better.
They are using as much and at times even more welfare and other
dervices from our country and that they TAKE and do not give anything
back worth as much as they take.
GQ