Tag: welfare

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.    

CIS Exaggerates the Cost of Immigrant Welfare Use

Yesterday the Center for Immigration Studies (CIS) published a report authored by Jason Richwine on the welfare cost of immigration. The CIS headline result, that immigrant-headed households consume more welfare than natives, lacks any kind of reasonable statistical controls.  To CIS’s credit, they do include tables with proper controls buried in their report and its appendix.  Those tables with proper controls undermine many of their headline findings.  In the first section, I will discuss how CIS’ buried results undermine their own headline findings.  In the next section, I will explain some of the other problems with their results and headline findings. 

CIS’s Other Results

The extended tables in the CIS report paint a far more nuanced picture of immigrant welfare use than they advertised.  To sum up the more detailed findings:

“In the no-control scenario, immigrant households cost $1,803 more than native households, which is consistent with Table 2 above. The second row shows that the immigrant-native difference becomes larger — up to $2,323 — when we control for the presence of a worker in the household. The difference then becomes gradually smaller as controls are added for education and number of children. The fourth row shows that immigrant households with the same worker status, education, and number of children as native households cost just $309 more, which is a statistically insignificant difference. The fifth row shows that immigrants use fewer welfare dollars when they are compared to natives of the same race as well as worker status, education, and number of children.” [emphasis added]

All of the tables I reference below are located in CIS’s report.   

CBO: Tangled Web of Welfare Programs Creates High Tax Rates on Participants

The dozens of different programs that form our tangled welfare system often impose high effective marginal tax rates that make it harder for low-income people to transition out of these programs and lift of those programs and into the middle class. As the people in these programs enter the workforce, get a promotion, or work more hours, they can lose a significant portion of those earnings through reduced benefits and increased taxes. A new report from the Congressional Budget Office (CBO) illustrates this predicament: many households hovering around the poverty level face steeper effective marginal tax rates than even the highest earners. These prohibitively high tax rates can discourage work and limit their prospects, ultimately making them less likely to escape poverty.

Center for Immigration Studies Report Exaggerates Immigrant Welfare Use, Part 2

Steve Camarota of the Center for Immigration Studies (CIS) wrote a response to my criticism of his recent report.  Camarota and I have gone back and forth before on similar issues in the past (here and here).      

Camarota responded to few of the points I made and many that I didn’t make.  The gist of his response is that I changed the subject rather than replying to his paper which is odd since, in his response, he dodged many of my specific points while going off on tangents.  Camarota wrote, “Readers should carefully note when would-be critics try to change the subject.”  Good advice – Camarota should have followed it.     

Here are the points I made in my initial post that he didn’t respond to: 

  1. The head of household variable that forms the core of CIS’s analysis isn’t useful or used much anymore by scholars who study this issue.  That variable counts many native-born Americans, including American-born spouses of immigrants, as part of the welfare consuming households.  This significantly exaggerates welfare use rates.  There are other reasons why households are not a useful unit of comparison.  Camarota didn’t respond to this.   
  2. The CIS report does not report the dollar value of welfare benefits consumed.  When immigrants consume welfare, the dollar value of the benefits is typically far lower for them than it is for natives – sometimes substantially so.  CIS could have included the value of welfare benefits consumed but they did not.  Camarota did not response to this.    
  3. Larger immigrant households could be driving the results.  Camarota did not respond to this. 
  4. Social Security and Medicare should be included because they are the largest programs in the welfare state.  Camarota sort of responded to that but then oddly implied that I support these welfare programs.  CIS frequently cites the existence of the welfare state to argue against immigration – whether legal or illegal.  I frequently use immigration as a means to argue for restricting or eliminating the welfare state.  You decide who is more opposed to the welfare state. 

CIS claims that welfare use rates for immigrants are higher because our immigration policy favors poorer family members over higher skilled workers.  That point would be noteworthy if CIS supported skilled immigration – which they don’t.  CIS opposes skilled immigration, making their complaint that immigrants are not skilled enough seem like merely a rhetorical play rather than a serious argument.

Camarota’s response was as unsatisfying as his initial report.  He impugns my motives, broadly misrepresents my positions on immigration, and responded to strawmen with only a vague resemblance to my actual criticisms rather than taking on the criticisms directly.  Frankly, I’m disappointed because CIS and Cato readers deserve a real debate on this issue.  

Center for Immigration Studies Report Exaggerates Immigrant Welfare Use

The Center for Immigration Studies (CIS) released a new report this morning on immigrant welfare use. CIS found that immigrants use far more welfare than natives do. CIS’ methodology, parts of which are suspect, is what produced this result – as we’ve pointed out to CIS multiple times. They also omitted a lot of information that would make for a better comparison between immigrants and natives. Simply put, the CIS study does not compare apples to apples but rather apples to elephants.

The first issue is that CIS counts the welfare use of households, which includes many native-born American citizens, rather than individuals. There might be some good reasons to do this but the immigrant-headed household variable CIS uses is ambiguous, poorly defined, and less used in modern research for those reasons. To CIS’ credit they try to separate out households with children but didn’t separate out American-born spouses. There is debate largely over whether to count the American born children of immigrants as a welfare cost of immigration. If we should count them, shouldn’t we also count the welfare use of grandchildren, great-grandchildren, and great-great-grandchildren of immigrants?  Such a way of counting would obviously produce a negative result but it would also not be informative.

Another problem with counting households rather than individuals is that immigrants and natives have different sized households. According to the American Community Survey, immigrant households have on average 3.37 people in them compared to 2.5 people in native-born households. All else remaining equal, we should expect higher welfare use in immigrant households just because they’re larger. CIS should have corrected for household size by focusing on individual welfare use – which is included in the SIPP.

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