David R. Henderson  

Welfare as a Magnet for Immigration: Some Evidence

PRINT
Huemer's Common-Sense Libertar... Government Hiring: Raising GDP...
The focus in the [1996] welfare reform legislation on scaling back the safety net for immigrants was, in some part, a response to concerns that generous public benefits lead to in‐migration to the U.S. and interstate flows of immigrants responding to "welfare magnets" (e.g., Borjas 1999) although the empirical evidence does not uniformly support this theory (e.g., Zavodny 1999, Kaushal 2005, Van Hook and Bean 2009). Further, the scaling back of immigrant access to the safety net was also a response to concerns about higher participation among immigrants compared than natives (Borjas 1995) although other studies find lower participation rates (Capps, Fix, and Henderson 2009). Higher rates of participation by immigrants are in part explained by immigrants' lower incomes, and are concentrated among the elderly (Borjas and Hilton, 1996; Hu, 1998) and refugee populations (Fix and Passel 1994). Notably, noncitizen use of Supplemental Security Income (cash welfare for the aged and disabled) rose by 80 percent between 1990 and 1995 (Social Security Administration 2010). [Bold added.]
This is from Marianne Bitler and Hilary W. Hoynes, "Immigrants, Welfare Reform, and the U.S. Safety Net," National Bureau of Economic Research, Working Paper No. 17667, December 2011, pp. 1-2.

Another excerpt:

Our analysis yields several interesting and important findings for families with children. First, we show that immigrants generally participate in the safety net at lower rates than natives once we restrict ourselves to comparisons within the set of lower‐income families. This is true for almost all programs we consider and is true both before and after welfare reform. Second, the national trends in safety net participation are broadly consistent with the finding of reduced immigrant access to the safety net post welfare reform. Similarly, our results show that immigrants rely more on earnings as a source of income (than do natives) and the degree of reliance has increased post‐welfare reform. Finally, using variations in state labor market conditions, we find that child poverty rates for immigrant‐headed households have risen with unemployment in the Great Recession at rates far exceeding the rise for children in native headed households. That is, a given increase in unemployment causes a larger increase in poverty for children in immigrant headed than native headed households. In addition, the safety net has acted to dampen the effect of the Great and 2001 recessions for children of the native born but not for children of immigrants. [Bold added.]

The ungated version is here.


Comments and Sharing





COMMENTS (18 to date)
Ken B writes:
Higher rates of participation by immigrants are in part explained by immigrants' lower incomes, and are concentrated among the elderly
Hmmm. The question being addressed is, do people come for the social services? Not, the answer seems to be, those who come for jobs. OK. But why then are the elderly, who are using more services, migrating?
David R. Henderson writes:

@Ken B,
Good point, Ken B. That's why I titled it the way I did: not to bias the reader but to give "some evidence."

Alex Nowrasteh writes:

The elderly they write about are mostly immigrants who came when they were younger and have grown old in the U.S.

David R. Henderson writes:

@Alex Nowrasteh,
Thanks. Interesting. Can you give a cite on that?

MingoV writes:
... immigrants generally participate in the safety net at lower rates than natives once we restrict ourselves to comparisons within the set of lower‐income families....
This is a great example of data manipulation to reach a desired conclusion. Comparing social services use by immigrants to that of the poorest natives almost guarantees a lower rate for the former.
D writes:

"generally participate in the safety net at lower rates than natives once we restrict ourselves to comparisons within the set of lower‐income families."

Well that's good to know! Hey, they're not as bad as our worst!

As someone who works in an area that is entirely bloated and scams the federal taxpayer in ways that would make your stomach turn (SSI and SSDI), my impression, just by going on last names, is that they had to use this statistical trick because if they didn't, the result wouldn't have been one they would have been proud to publish.

David R. Henderson writes:

@MingoV,
This is a great example of data manipulation to reach a desired conclusion. Comparing social services use by immigrants to that of the poorest natives almost guarantees a lower rate for the former.
Two points:
1. Unless you have information that you haven't revealed, you have no basis for claiming to know the "desires" of two researchers whom, I'm pretty sure, you don't even know.
2. You missed the point on the comparison. The comparison, as you yourself noted, is "within the set of lower‐income families." That's who is/are eligible for welfare. It doesn't include all immigrants, as your statement suggests.

Ghost of Christmas Past writes:

"First, we show that immigrants generally participate in the safety net at lower rates than natives once we restrict ourselves to comparisons within the set of lower‐income families." [emphasis added]

What that apparently means is: "immigrants generally use more welfare than natives. We choose to suggest that they use less by comparing immigrants only with that segment of the native population that uses welfare a lot!" Sounds like selection bias (or a kind of goofy restriction of range) to me.

I don't know what motivates that method of analysis, but I think it yields a misleading comparison. The question is whether immigrants "come for the handouts" and if immigrants on average use welfare more than (all) natives on average, then perhaps welfare payments do attract immigrants.

Anyway, native taxpayers may not wish to fund welfare payments to immigrants regardless of whether immigrants are more likely than native paupers to claim welfare benefits. Neighborliness (or simple fear of crime) may prompt native taxpayers to subsidize paupers who are already in the neighborhood, but taxpayers may balk at subsidizing paupers from far away.

The absolute (present) value of everything diminishes with distance,* so faraway paupers provoke less neighborliness (and less fear of crime) than nearby paupers, therefore they deserve less subsidy (at least from homo economicus). When a distant pauper migrates and becomes a nearby pauper, he imposes a cost (negative value) on the native taxpayer. The best way for a native to avoid that cost is to prevent the pauper's immigration, because that avoids all the costs, whereas permitting immigration but refusing welfare payments leaves the costs of guilty feelings (due to imperfect neighborliness) or possibly the costs of the unsubsidized-pauper's crimes to be incurred.


*Consider a 1-ounce gold coin. If I offer to sell it to you on the spot for cash, you might be willing to pay me, say, $1,500. If I offer to sell you the same coin but you have to take delivery strictly at my vacation home in Santiago, Chile, you will likely offer me much less. Distance also affects the price (you're willing to pay to avoid) of negative-value goods (say, mosquitos or hemorrhagic fever). The value to you of any type of good tends toward zero as it becomes more distant.

shecky writes:
What that apparently means is: "immigrants generally use more welfare than natives. We choose to suggest that they use less by comparing immigrants only with that segment of the native population that uses welfare a lot!"

Mmm... no. "Immigrants generally use more welfare than natives" is not the conclusion. There may not be any data to make such a conclusion, though I can't be sure until I read the paper. It's not clear that immigrants falling in higher income ranges were ever evaluated for welfare consumption, because immigrants (and natives) in higher income ranges are increasingly ineligible for welfare benefits.

The elderly they write about are mostly immigrants who came when they were younger and have grown old in the U.S.

This is possible. It also occurs to me that immigration policy also favors familial ties/reunification, which might, as a result, favor immigration among the elderly. Alas, this is just speculation, and I have no data to support this.

ajb writes:

They also don't take into account the welfare rates of the children of immigrants. If I understand correctly, Hispanic immigrants (who are the bulk of new immigrants including illegals) have kids who on average grow up to perform more poorly (vis a vis work, education, and out of wedlock births) than the average American. Hence, they will get on welfare rolls more often than the average American and there the comparison to the general population is relevant.

Citizens should care about the effects of the first and subsequent generations.

Anthony writes:

@ajb: Yes. And the data set they are using, CPS, includes information on whether the respondent is a second-generation immigrant. So that would be very doable.

Ghost of Christmas Past writes:

I thought we were discussing the Bitler-Hoynes paper which addresses the question of whether the prospect of collecting welfare in the US motivates immigration.

We already know, from government statistics, that immigrants and their children use welfare more heavily than natives. (That's why the Bitler-Hoynes remarks seem evasive.)

What we're not sure about is whether people migrate to get welfare (the welfare "magnet") or if prospective migrants are just over-optimistic about their prospects of earning a good living in the US.

Honestly, I think over-optimism plays a big role. But I personally know non-welfare-using immigrants who brought their elderly parents to the US specifically to enroll them in Medicaid and SSI, so I am certain some fraction of immigration is motivated by a desire to collect US welfare.

Steve Sailer writes:

I think the 1996 reforms succeeded in getting us a better class of illegal immigrant, less drawn by welfare and less prone to crime. On the the other hand, we're still talking about unskilled construction workers drawn by a Housing Bubble largely based on the assumption that these unskilled construction workers could afford $300,000+ homes, so it was all a disaster, but at least the newcomers tended to be a little less grasping and homicidal than their forerunners due to the 1996 limitation on welfare.

Ghost of Christmas Past writes:

The UK has a big welfare-magnet problem, apparently. I have read that Britons fear the arrival of many thousands of Gypsies seeking welfare payments from Eastern Europe when current restrictions on their migration are lifted in 2014.

Ken B writes:

@DRH:
I fear I am not persuaded by your point 1 to MingoV. I think he is arguing that the comparison is transparently biased, and thus serves as evidence of intent. I think you have made similar conclusions about some of Steve Sailer's remarks for example. Perfectly fair (even charitable) conclusions to judge by his latest squib I must say.

David R. Henderson writes:

@Ken B,
But notice my qualifier: "Unless you have information that you haven't revealed." Steve Sailer has a long track record and so there's lots of information about him.

Ken B writes:

David, you also said no basis. But if the argument is transparently dodgy special pleading (which I take to be MingoV's assertion) then he does have some evidence.
I am not agreeing with MV, having not read the paper, just clarifying the logic of his remarks.

Ghost of Christmas Past writes:

Even from the passage quoted, MingoV has some basis for making inferences about the authors' attitudes since the authors choose to use tendentious euphemism to describe immigrant welfare dependency. They write that "immigrants participate in the safety net." "Safety net" is itself a euphemism, and the verb "participate" is another; claiming handouts from taxpayers via the government is not like playing intramural sports nor like collecting a share of profits from a joint investment.

Comments for this entry have been closed
Return to top