Bryan Caplan  

Wages, Welfare, and Elderly Immigration

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Two of the most popular complaints about immigrants:

1. They take our jobs.

2. They're all on welfare.

There's a major tension between the two complaints: Are the immigrants stealing jobs, or loafing?  Contradictions aside, though, you have to wonder: Which complaint do people take more seriously?

Consider the following graph, reproduced in Kerr and Kerr (2011):
immage.jpg

Notice that elderly immigrants are indeed a serious fiscal burden.  Why?  Because they collect benefits but don't work or pay taxes.  If Americans' main worry were welfare, then, they'd make it especially hard for the elderly to immigrate.  On the other hand, if Americans' main worry were were the effect of immigrants on wages, they'd treat the elderly more leniently.
 
My casual impression is that the latter holds.  But I'm having trouble finding credible evidence one way or the other.  What can you tell me?



COMMENTS (26 to date)
Aeon J. Skoble writes:

Yep: http://www.thefreemanonline.org/featured/in-defense-of-the-huddled-masses/

Steve Fritzinger writes:

It's those teenage immigrant welfare mothers on drugs
(They're too lazy to work)
Teenage immigrant welfare mothers on drugs
(They're stealing our jobs)

Teenage Immigrant Welfare Mothers on Drugs - The Austin Lounge Lizards

Pedro Bonilla writes:

I would swing in the direction of neither being true because the immigrants take jobs that no one wants and they take care of their own. As for the elderly taking benefits well if we are unwilling to pay a high enough price where it is attractive for people who are "natives" to take those jobs then we should not be surprised if we pick up the tab as a side effect of cheap labor. The better question is for these people is "Do you like your potatoes with blood and suffering or not?"

Evan writes:

Another possibility to consider is worries about immigrant crime. Whether or not those worries are justified is another issue entirely, but there's no doubt people seem to have them. If worries about crime are a factor then elderly immigrants would be treated more leniently, since elderly people tend to commit less crimes, especially violent crimes.

Jeff M. writes:
There's a major tension between the two complaints: Are the immigrants stealing jobs, or loafing?

That's no contradiction. Let's say X% of immigrants loaf and 100-X% of immigrants steal jobs; for any non-zero value of X, one could complain about both subsets of immigrants without contradiction.

TimG writes:

It easy to do both, consider a low wage job meant for a teenager who is a legal dependent supported by their parents, is instead filled by low skill immigrant who is trying to raise a family. The government support and benefits for the immigrant and family is what makes the US job attractive, not the wage.

Gian writes:

That the immigrants change our common culture including the political culture, is not a valid complaint?

Mercer writes:

Who says all immigrants are on welfare? You are inventing a straw man.

What people say is that low skilled immigrants receive more in government benefits, mainly public schooling for their children and medical care, then they pay in taxes.

Bryan you should debate an actual immigration critic rather then invent straw men.

8 writes:

A popular immigration method from China is to have an anchor baby or send over a college student, who can then bring the parents over once they get citizenship.

Neal writes:

Brian
I notice in your graph that immigrants at age 0 have a discounted net cost (indeed, anybody under 18). I haven't clicked through to the paper, but how does that square with your natalism?

MikeP writes:

Most people are protectionists, with all the misguided economic intuition that goes with that viewpoint.

They are much more worried about losing their job to a working immigrant than they are about losing a little more in taxes to a nonworking immigrant.

Bryan Caplan writes:

@Neal - I didn't produce the numbers myself, but as far as I understand the reason is that the average child of immigrants consumes expensive schooling, then grows up to have below average income. I'd read it as a conservative/pessimistic estimate.

@Mercer - If you google

immigrants "all on welfare"

about half the hits are sincere, and half are caricature. It's a low-status thing to say, but plenty of people still say it - probably more often in conversation than in print.

Floccina writes:

First I am pro immigration but what anti-immigration people focus on?:

I think people are worried about both and about subsequent generations. Welfare would include Government schools, food stamps and subsidized housing working people can get those forms of welfare.
About subsequent generations people worry that the children of Mexican and central American immigrants are more prone to crime and welfare though the first generation the true immigrants were not.
Some people are also worried about them not adopting USA culture.

Grumpy Old Man writes:

Think at the margin, Bryan.

Imagine there are two, and only two, immigrants. One takes your job (you get fired, he gets hired) while the other goes on the dole. Is it not possible to say that immigrants “take jobs” and are “on welfare”?

You wrote:

"If you google

immigrants "all on welfare"

about half the hits are sincere, and half are caricature."

If your best arguments can only refute weak or poorly articulated arguments from the other side, what does that say about your position?

Ted Craig writes:

Even taking schools out of the equation, many welfare programs are geared toward families with kids (WIC, SCHIP).

JohnP writes:

Bryan, would your views on immigration change if you believed that Latino intelligence is on average half a standard deviation below white intelligence, and that the difference is 60% dependent on genes?

rapscallion writes:

JohnP,

Bryan has used basic economics to argue that even if immigrants have lower average IQs for genetic reasons, that's not a good reason to restrict immigration:

http://econlog.econlib.org//archives/2006/01/where_eugenics.html

Tom West writes:

Isn't cause/correlation mixed up here.

I suspect that the chain of reasoning is:

immigration is bad -> immigrants take our jobs/go on welfare

If that's the case, then the accuracy of their observations is not relevant. If they're forced to strip it away, it eventually becomes "I don't want to share my country with more people from different cultures and it's my country, so that's all there is to it."

(I suspect that Japan is much this way. Many understand the economic cost, but they feel the benefit is not worth the price of maintaining cultural uniformity.)

JohnP writes:

rapscallion -- Thanks for the link. My concerns were all aired in the comments there, so I won't pursue them here.

GIVCO writes:

Let's sell entry and then foreign families could pool their money and decide which member is most likely to create wealth. They'd know better than some Congressional committee.

The cost of admission should be high enough that even if loafers bought entry, they'd be used to a rich lifestyle and bring money.

Finch writes:

> Let's sell entry and then foreign families
> could pool their money and decide which member
> is most likely to create wealth.

I don't understand why it's common for economists to advocate giving away citizenships for free. To there's extent that there's value to be captured, those who can make new citizens (i.e., current citizens) ought to price to capture that value.

Why is there a redistributive element to this discussion when it could just be about trade?

Regarding Bryan's original point, obviously both 1 and 2 can be true at the same time either for different subsets of immigrants, or for any individual who is a net tax recipient (for example, immigrants who are employed under the table and don't pay taxes, but who still receive subsidies).

Bob Montgomery writes:
If you google

immigrants "all on welfare"

You get ~40K hits.

If you google

immigrants "on welfare"

you get 2.4M hits. What's that, 1.5 orders of magnitude?

Tim writes:

@finch,

Unless I'm seriously mistaken, where marginal cost is zero, price should be zero. We don't manufacture new citizenships; they don't have marginal cost.

Finch writes:

> where marginal cost is zero, price should be zero.

We have a monopoly. Price should be set to maximize our profit.

Cost has almost nothing to do with it. Besides, there's clearly debate on cost.

Henry Bowman writes:

TimG got it in one. It's possible for illegal immigrants to both work AND suck exhaustively upon the public tit.

Here in southern Arizona, the immigrant load actually destroyed a hospital, eliminating access to medical services for the entire surrounding community. Federal law forced the hospital to serve all patients who couldn't pay; illegal immigrants used the emergency room as a free source of medical care; and the hospital went under. If the immigrants are getting "public" services for free, it makes no difference to the providers whether these immigrants have jobs or not -- they are stealing resources and gaming our economic system.

Charles Foreman writes:

We should not confuse illegal and legal immigration.The people in favor of illegal immigration always try to erase the difference.We should also keep the elderly immigrants separate from the working-age immigrants.Here in Glendale,California,we have had many thousands of elderly people from Armenia immigrate here in the last 20 years.Their families have them signed up for SSI($914 a month)within a month.They are given preference on the Section 8 housing waiting list.They also get all the benefits that American seniors get such as half-price monthly bus passes,a $40 coupon each month to use at farmer's markets,and on and on.All this without having paid a dime into the system.I see this same scenario every month:well dressed,well-fed recent senior immigrants who have a nice apartment in a nice part of town waiting for the bus.Then,I will see a homeless American pushing his shopping cart full of his possessions past them.I think to myself-this is insanity.We let these people in to live the good life on the back of the taxpayer,yet our own homeless live like dogs in the street.I estimate each one of these people cost us $250,000.Is it any wonder that Australia won't let you emigrate there if you over 35?

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