Immigrants, welfare reform, and the U.S. safety net

That is the title of an intriguing new economics paper by Marianne Bitler and Hilary W. Hoynes, official NBER version here.  Remember when they cut some benefits for immigrants, circa 1996?  That can form the basis for a natural experiment, because non-immigrant poor families did not experience a similar cut in benefits.

I urge extreme caution in the interpretation, but here is one result:

The difference-in-difference estimates show that poverty rates declined for children in immigrant-headed households compared to natives post-welfare reform (2008-2009) relative to pre-reform (1994-1995).

But why?  There is more:

This result is unexpected but may be explained by a change in the composition of immigrant children (see Figure 3).  That is…the difference-in-difference reflects the decrease in immigrant poverty in the 1994-1999 period.

You can take this as a mix of optimism about immigrants and skepticism about some welfare programs, or perhaps optimism about how a health job market helps immigrants more than non-immigrants.  I don’t in Figure 3 see any actual measurement of the composition of immigrants, although immigrant households do show rising income levels over the critical years.  Stick by the caution mentioned above.  In any case, following the decrease in welfare benefits immigrant households rely more heavily on earned income, which should be taken as good news.  I would rather offer fewer benefits to immigrants and take more people in, to the extent that is the choice.

I don’t think this paper gets to the bottom of the puzzle it is studying, but it is an important piece of work.


I would rather offer fewer benefits to immigrants and take more people in


We are all immigrants or descendants of immigrants.

So you are saying Native Americans "immigrated" from Asia? Not sure that counts. What about native Africans?

1) "Native" North Americans displaced the people where where here at the time (the modern native americans are of polynesian descent, the previous natives were not.

2) The various african groups displaced each other so its hard to say which was first or which was not an immigrant. The only people we can say almost definitely were not immigrants where the Basque people, although the Neanderthals may disagree if they were alive today.

In North America, we're ALL immigrants or descendants of immigrants. (Also in South America, Europe, Eurasia, Asia.

There is more genetic diversity among human beings in Africa than anywhere else, because a) that's where all humans came from and b) not all of the different genetic groups left Africa.

"The Human Family Tree" on DVD is recommended.

Also on Amazon,

If you want to find out your genetic "history" there are many DNA tests available, including the "deep genetic history" testing offered by National Geographic's Genographic Project.

For more detailed genetic history, see and And there are others.

Test both a male and a female member of your family.

You might be surprised who your ancestors and relatives really are. (My own testing confirmed several old family stories.)

So you are saying Native Americans “immigrated” from Asia?

No. All of them emigrated from Africa.

"We are all immigrants or descendants of immigrants."


Uh, no, it's S C I E N C E.

How is it relevant? Ths about future immigration.

This assumes that the non-immigrant poor were equipped with the same abilities and potential as the immigrant poor.

Remember when they cut some benefits for immigrants, circa 1996?

I'm skeptical. They also cut benefits for non-immigrants in 1996, making a comparative analysis difficult at best or meaningless at worst. I guess I'll have to read the paper to see if the authors were able to control for that...

Also, why only compare 1995-6 with 2008-9? A lot has changed in the intervening years.

The ASEC does not ask any questions about immigration status or country of origin. The ASEC sample also matches the CPS sample (where these questions are asked) less than 50%. So how the heck do the authors manage to assign data from the ASEC to households based on whether or not they're immigrants? They don't explain this at all in their methodology.

Without having read the paper, I offer one possible causal route:

Immigrants who were surviving mainly on benefits were much more likely to return home once the benefits were cut than immigrants who were supporting themselves through work, and future immigrants were more likely to be prepared to work than previous immigrants. Thus the conservative scaremongering about "immigrants taking welfare" was at least partially true, and the benefit cut made it less true (which is why you don't hear as much about it anymore).

And they keep cutting the financial aid for low income students, it will keep getting tough for all the immigrant families.

The law was that you had to be a permanent resident for five years before you could get benefits, if you became a citizen you got your benefits immediatly. Of course US born children of immigrants got benes immediatly also.
They held this up for a year or two, until the Supreme Court said it was constitutional.

I suspect this 1996 reform was a good law: the obvious comparison is to Northern European countries where much of immigration is, in essence, multigenerational welfare fraud, often carried out through arranged cousin marriages, forcing daughters born in Europe to marry their first or second cousins in the Old Country in order to import more of the clan to slack on welfare. The U.S. doesn't have as much of that kind of problem, thankfully, and the 1996 law works against that kind of culture of rip-off developing. (Of course, ending the study in 2008 makes things look better than in taking into full account the impact of the immigration-assisted Bubble: many illegal immigrants were employed in Housing Bubble-boosted work, such as building unneeded homes in the exurbs or putting in granite countertops for people with home equity loans. And population growth, much of it driven by immigrants or their children, was seen as justifying absurdly high home prices, especially as people tried to get their children into school districts away from school districts overrun by the children of illegal immigrants.)

That said, American society's expenditures on illegal immigrants and their children (they tend to have high fertility) are very large: emergency room medical care, schools, etc. Illegal immigration is, in economic terms, a scam where low-wage employers reap the benefits and the externalities get saddled on society as a whole. Privatize profits and socialize costs.

In Australia we have considerable numbers of so called 'Asylum Seekers'. In reality they are just people trying to migrate here. Once here they get substantial welfare from the government. The long term unemployment rate for these people is huge compared to the rest of the population, particularly for those from the Middle East and Africa. I personally would endorse an open borders policy with the proviso that those who come are unable to receive any government benefits for ten years. In return they could have a lower tax rate. It's a plan unlikely to be adopted especially as the groups who distribute the welfare, mainly charities as well as government bodies are supporters of the status quo. In effect they are as much beneficiaries of the system as the illegal immigrants.

Comments for this post are closed