welfare

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

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.

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

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.

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