Tag: welfare

Immigrants and Their Children Use Less Welfare than Third-and-Higher Generation Americans

A consistent criticism of Cato’s immigration-welfare research is that we compare the welfare consumption of all immigrants to all natives. Our method means that we consider the U.S.-born children of immigrants as natives, even when they reside in a household with foreign-born parents. Our critics contend that this undercounts immigrant welfare consumption because those children would not exist here without the immigrants coming in the first place. Thus, they claim, the welfare consumption of the U.S.-born children of immigrants should be combined with that of their immigrant parents in order to produce an accurate total assessment of immigrant welfare costs.

However, other researchers who combine first and second generation welfare-use do not combine these generations correctly. They use the Current Population Survey (CPS) data to measure immigrant household welfare use rates and benefit levels that includes the U.S.-born children of immigrants who live in the household, but they exclude tens of millions of U.S.-born children of immigrants who do not live in their parent’s households. Thus, counting only the children in the immigrant households produces a limited and biased estimate of first and second-generation welfare costs because the vast bulk of means-tested welfare targets households with children. If the second-generation must be included at all, a better approach would be to include second-generation adults as well.

Robert VerBruggen at National Review convinced us to estimate the welfare consumption levels and use rates for immigrants and their children of all ages (the first and second generations) relative to Americans in the third-and-higher generations in 2016. We initially intended to look only at immigrants who arrived in 1968 or later, which is the year that the Immigration Act of 1965 went into effect, but we were unable to limit the CPS sample and their children so precisely. We were also unable to estimate the welfare use rates or benefit levels for Medicaid or Medicare because of myriad data limitations. Figure 1 shows the result of the welfare use rates multiplied by the benefit levels for each generational group for four welfare and entitlement programs. This produces an average per capita welfare cost for each group for each program that combines adults and children.

Immigrant Welfare Consumption: A Response to Richwine

Jason Richwine recently published a short criticism of a new brief that Robert Orr and I wrote about immigrant and native benefit levels and use rates for means-tested welfare and entitlement programs.  This is another in a long series of blog post responses between those who support different methods for measuring native and immigrant welfare consumption so the response is wonky and does not revolve around a central question.  The title of Richwine’s criticism is “Obfuscating the Immigrant-Welfare Debate.”  Below, Richwine’s comments will be in quotes and my responses will follow.

“A few years ago I noted that ‘the amnesty movement has turned the political numbers game into an art form, systematically obscuring the trade-offs inherent in immigration policy.’ The movement has reached new heights of obfuscation with Alex Nowrasteh and Robert Orr’s Cato Institute study, ‘Immigration and the Welfare State.’”

Richwine hid half of our title: “Immigration and the Welfare State: Immigrant and Native Use Rates and Benefit Levels for Means-Tested Welfare and Entitlement Programs.”  Our entire title is important to defusing many of Richwine’s other complaints later in his piece.  The charge of obfuscation is serious but cutting off three-quarters of the words in our title does not enhance clarity.

“The Nowrasteh-Orr study says that’s all wrong. In fact, immigrants receive 39 percent less in welfare benefits than natives on a per capita basis. How is this possible? By including Social Security and Medicare as ‘welfare,’ for starters.”

As the title of our brief states, we included entitlement programs as part of the welfare state.  As we further explained in the first two sentences in our brief, we included them because they accounted for about 65 percent of all federal benefits outlays in 2016.  It is impossible to discuss the welfare state or the impact that immigrants have on it without including entitlement programs because they comprise its largest share.

Food Stamp Reform in 2018?

The Supplemental Nutrition Assistance Program (SNAP) is one of the costliest welfare programs at about $70 billion a year. Not only is it costly, but a large share of the benefits are not used as intended.

Recipients are supposed to use SNAP or food stamp benefits to “make healthy food choices” and “obtain a more nutritious diet.” But it turns out that about $15 billion of food stamp spending goes for junk food, such as candy and cola. Many recipients are not making the nutritious choices the government intends.

The Trump administration is expected to pursue welfare reforms next year, and trimming food stamp benefits is one priority. The Washington Post says that the U.S. Department of Agriculture (USDA)

is considering proposals to let states impose new restrictions on purchases of soda and candy and require SNAP candidates to apply in person, according to the Secretaries Innovation Group (SIG), which represents state social service secretaries from 20 Republican administrations. The agency is also considering a proposal to allow states to reduce payments to some groups of people, including undocumented immigrants’ citizen children.

… In the past, the USDA has rejected requests from states to take some of the actions SIG has suggested, particularly limiting the types of foods that people can buy with food stamps.

… One of the more controversial proposals involves a recommendation that the USDA ban “harmful” foods, such as soda and candy, from being purchased with food stamps. SIG also proposes that the program allow the purchase of only specific, “approved” foods, similar to what the Women, Infants and Children (WIC) program does.

“The Supplemental Nutrition Assistance Program is intended to subsidize nutrition for needy families,” reads SIG’s proposal, which was submitted to the USDA and Republican congressional leadership, and obtained by The Post. “However, too many recipients are utilizing their benefit to purchase items that are not only void of nutrition, they are damaging to their health.”

The article says “SNAP is America’s largest anti-hunger program,” but the main food-related health problem for low-income households today is not hunger, but obesity. Americans with low incomes are more obese than people with high incomes, on average. In general, people with low incomes are not suffering from too little food, but from too much of the wrong kinds of food.

So ending SNAP’s subsidies for junk food would be a pro-nutrition way to cut demand for the program and reduce taxpayer costs. Federal reforms to allow states to restrict benefits would move in the right direction. If food stamps could be only used for items such as fruits and vegetables, it is possible that fewer people would use the program and costs would fall.

For more on federal food subsidies, see here.

The RAISE Act Would Hurt U.S. Taxpayers

Robert Rector of the Heritage Foundation recently argued that the RAISE Act, a bill introduced by Senators Cotton (R-AR) and Perdue (R-GA), would save taxpayers billions by reducing lower-skilled immigration.  Below I will argue that the RAISE Act does no such thing mainly because it does not actually increase skilled immigration, does not much alter the current education level of immigrants in the United States, and would result in removing at least 500,000 H-1B visas within a year of passage.  Using the National Academy of Science (NAS) fiscal estimates, the RAISE Act is more likely to increase deficits over the next 75 years than to decrease them.

Rector makes two main claims in his post.  The first is that “[b]ased on the National Academy of Sciences’ estimates, the average low-skill immigrant (with a high school degree or less) who enters the country imposes a net present value on taxpayers of negative $142,000.”  A fiscal net present value (NPV) means that each immigrant in this education range would have to deposit $142,000 upon arrival that would earn 3 percent compounded annual interest to cover the full cost of social services that he or she will be expected to consume over the next 75 years.  The second claim is that the RAISE Act could save taxpayers at least $1 trillion by cutting the flow of immigrants with a high school degree or less.  The sections below will analyze these claims by using the National Academy of Sciences’ estimates and information from the Current Population Survey of the U.S. Census (CPS).

France at the Brink (Again)?

This Sunday, French voters will return to the polls to decide the country’s next president. Last month’s first-round vote reduced the field to two unconventional candidates: Emmanuel Macron, formerly a top official of the left-wing Parti Socialiste and now leader of the fledgling En Marche! party; and Marine Le Pen, until recently the leader of the nationalist-right Front National.

Both candidates are unconventional not just because their parties have never held political power, but because the candidates have fashioned themselves as populist/outsider champions of downtrodden workers. Granted, sans-cullottes appeals are standard fare in French politics, but they have renewed force in this election, following a half-decade of French unemployment hovering around 10% and with youth unemployment (under age 25) well above 20%.

French employment and the country’s overall economy have sagged before, of course. U.S. observers often attribute those downturns in part to France’s labor laws, which they say (with irony) protect current workers by discouraging employers from creating new jobs. But French employment and the country’s economy have also surged before; typically France is Europe’s 2nd largest economy, after Germany. The past several decades have heard many predictions that France has reached “the end of the road” (to borrow from Ronald Reagan in 1964) unless it reforms its labor, entitlements, and other domestic policies, but neither economic doom nor dramatic reform has occurred.

Université du Québec en Outaouais economist Pierre Lemieux explored this in last fall’s cover story for Regulation magazine. It’s a great read if you want to learn more about what has led to France’s current conditions and what may lie ahead.

Is Mobility a Right or a Privilege?

Michael Lind, a co-founder of left-leaning New America, is urging the federal government to create universal mobility accounts that would give everyone an income tax credit, or, if they owe no taxes, a direct subsidy to cover the costs of driving. He argues that social mobility depends on personal mobility, and personal mobility depends on access to a car, so therefore everyone should have one.

This is an interesting departure from the usual progressive argument that cars are evil and we should help the poor by spending more on transit. Lind responds to this view saying that transit and transit-oriented developments “can help only at the margins.” He applauds programs that help low-income people acquire inexpensive, used automobiles, but–again–thinks they are not enough.

Lind is virtually arguing that automobile ownership is a human right that should be denied to no one because of poverty. While I agree that auto ownership can do a lot more to help people out of poverty than more transit subsidies, claiming that cars are a human right goes a little to far.

Did Welfare Reform Increase Naturalizations?

The 1996 Welfare Reform Act (PRWORA) made it more difficult for non-citizens to access means-tested welfare benefits.  However, that law also allowed states to use their own funds to extend means-tested welfare benefits to non-citizens and some took advantage of this.  After 1996, the only sure-fire way for a non-citizen to get welfare benefits was to naturalize and become a citizen. 

Twelve states did not change non-citizen eligibility for four large welfare programs (TANF, SNAP Medicaid, and SSI) in response to PRWORA while the other 39 states and the District of Columbia became more restrictive.  If non-citizens responded to welfare reform by naturalizing in order to gain access to benefits then there would be a larger increase in naturalizations in states with more restrictive post-PRWORA policies.  The evidence bears this out for immigrants based on country of origin.  The state by state evidence is more mixed. 

I then compared the increased percent in the number of naturalizations per state from the 1993-1995 period (first period) to the 1997-1999 period (second period).  Unfortunately, the 1996 data is unusable because some of it is unavailable and computer problems delayed naturalizations for that year, causing a 100 percent drop off in some states that had nothing to do with welfare reform.    

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