Center for Immigration Studies Overstates Immigrant, Non‐​Citizen, and Native Welfare Use

The Center for Immigration Studies (CIS) just released a new report that purports to show that 63 percent of non‐​citizen households are on welfare compared to 35 percent of native‐​born households in 2014. The purpose of this report was to justify the president’s new public charge rule. For years, CIS and I have debated this topic and this blog is yet another installment. Please follow these links to read the previous installments.

There are a few issues with the CIS report and an unsound methodological choice that they made that results in inflating the welfare use rates for immigrants and natives. I’m just going to make two points below.

First, the welfare use rate reported by CIS is much higher than the welfare use rates estimated by the Department of Homeland Security (DHS) even though they both relied on the Survey of Income and Program Participation (SIPP). DHS did look at 2013 and CIS looked at 2014, but one year shouldn’t make much of a difference as no new big welfare laws were passed then. The biggest difference between the DHS and CIS analysis is that CIS used households as a unit of analysis and DHS used individuals (more on this below). Table 1 shows the differences. CIS reports much higher welfare use for natives, the foreign‐​born, and non‐​citizens for every program. Table 2 shows just how much higher CIS’ estimates are for every welfare program relative to DHS’ estimates. Relative to DHS’ estimates, CIS estimates that native‐​born welfare use rates are an average of 95 percent higher, foreign‐​born use rates are an average of 173 percent higher, and non‐​citizen use rates are an average of 208 percent higher.

Table 1: Estimated Welfare Use Rates by the Organization that Conducted the Analysis

Sources: Center for Immigration Studies, Table 1; Department of Homeland Security, Table 11.

Table 2: Percentage Difference Between CIS and DHS Welfare Use Rate Estimates

Sources: Center for Immigration Studies, Table 1; Department of Homeland Security, Table 11; author’s calculations.

Second, CIS chose to use a head of household unit of analysis rather than an individual unit of analysis. This means that they designated some households as headed by non‐​citizens and others as headed by natives based on SIPP responses. Thus, CIS’ analysis counts many native‐​born American children, American citizen spouses in immigrant households, and doesn’t control for the size of the households. CIS does show welfare household use rates without non‐​citizens in them, but the entire household unit of analysis is a flawed way to look at welfare use rates. The DHS sided with Cato on this long‐​standing issue as it measured individual welfare use rates and didn’t bother with an antiquated head of household measure. The only close approximations to a household or family‐​level analysis that DHS conducted were in Tables 16 and 17 of its report, but it only compared citizens to non‐​citizens. Tables 16 and 17 unsurprisingly find that people with more children have higher welfare use rates.

DHS isn’t the only organization to agree that the individual is the proper unit of analysis. According to the massive report on the economic and fiscal consequences of immigration published National Academy of Sciences (NAS), the individual is the proper unit of analysis for fiscal cost analysis. Since welfare use rates are a subset of fiscal cost analyses, it makes sense to use the individual rather than the household. The NAS authors wrote:

households are not stable over time and because the costs and benefits originating in mixed households often need to be divided between native‐​born and foreign‐​born members—as opposed to having to ascribe them exclusively to one group or the other—the individual unit of analysis is more flexible and empirically feasible for dynamic analyses (338).

Even in static analyses, the NAS argues that the problem of how “to define an immigrant household (339)” breaks in favor of an individual unit of analysis to at least maintain consistency between the dynamic and static methods. This is a big change from the NAS’ previous study in 1997 that argued for households as the unit of analysis.

The DHS and NAS both agree with Cato scholars that the individual is the proper unit of analysis in a welfare cost analysis by nativity. CIS is on the other side of that issue. I am not making an appeal to authority, but CIS should have to make a better case for why it persists in using the household level of analysis.

CIS’ analysis is not compelling. A competing analysis of the same data by DHS, using the individual unit of analysis that Cato scholars have recommended, found that all immigrants have a welfare use rate identical to natives and that non‐​citizens only have a slightly higher usage rate.

Cato scholars are very concerned with immigrant welfare use, which is why we’ve authored a study on how to eliminate non‐​citizen welfare use that is now in the form of legislation introduced by Representative Grothman (R-WI). His bill would do more to save taxpayer dollars and reduce welfare use among immigrants than any refined public charge rule. Although CIS and I do not agree on many of the facts regarding immigrant welfare use, we should be able to agree that approaches like those of Representative Grothman are better than a revised public charge rule.