Immigrants Use Less Welfare, Even Counting Their U.S.-Born Children

Countering a persistent critique of our welfare analysis

Steven Camarota of the Center for Immigration Studies recently criticized our research on immigrant welfare use at National Review. His central complaint is that by classifying U.S.-born children of immigrants as natives, we fail to fully capture the fiscal burden that immigration places on the welfare state.

There are many good counterarguments to that position such as the fact that we include immigrant children, native-born children are not immigrants, and the logic of Camarota’s argument means we should count all welfare consumed by native-born Americans as actually coming from immigrants because none of us would be here without immigrants. We’ve made those arguments before, so this time we decided to rerun our analysis under some assumptions Camarota sounds like he would approve of. This time, we grouped immigrants together with their U.S.-born dependent children and compared their per-capita welfare use to that of natives (excluding children with two immigrant parents). The results are clear: even under this revised framework, immigrants and their children use significantly less welfare per capita than native-born Americans do.

Camarota’s preferred metric is the share of households that use at least one welfare program. But household use rates are an imprecise way to measure fiscal impact. A household with one member receiving a modest benefit counts the same as a household with 10 people receiving far more in total assistance. Use rates alone do not measure fiscal burden, while dollar amounts do. There’s no good methodological reason to compare welfare use in households of different sizes when we can compare individuals. Just to hammer this point home, individuals all contain the same number of people (one) while households contain different numbers.

Our analysis focuses on per-capita welfare expenditures. Our metric captures the actual fiscal cost per person and allows for meaningful comparisons across populations with different household sizes and demographic structures. We also adjust for survey undercounting in both use rates and benefit amounts. Administrative data would be ideal, but in its absence, careful adjustments to the SIPP survey data are the best available method.

Camarota does raise a fair point: U.S.-born children of immigrants would not exist in the United States had their parents not immigrated. If the goal is to estimate the total fiscal effects attributable to immigration, then including those children alongside their parents is a reasonable exercise. Of course, that argument also means we should include the grandchildren of immigrants in the analysis because they wouldn’t be here without immigrants either. Great-grandchildren too. On second thought, Camarota doesn’t have such a good argument.

After reclassifying immigrants’ dependent U.S.-born children as part of the immigrant population, we found that immigrants and their children still use less welfare per person than native-born American adults and their dependent children. On a per-capita basis, immigrants and their U.S.-born children consumed $2,734 less in welfare benefits annually than natives on average. They used less in Social Security, Medicare, SNAP, SSI, and TANF. They did use more Medicaid, the Earned Income Tax Credit (EITC), and WIC. But in total, they used 25 percent less welfare per capita (Figure 1).

Native-born adults and their dependent children used an average of $10,878 of welfare per capita, in comparison to $8,144 for immigrants and their dependent children. Of that, native-born adults and their children used $7,370 in old-age entitlements and $3,508 in means-tested welfare. Immigrants and their children used $3,993 in old-age entitlements and $4,150 in means-tested welfare. While immigrants and their children used 18 percent more means-tested welfare under this new measure, the U.S.-born and their children used 85 percent more old-age entitlements, driving the nearly $3,000 extra use among the U.S.-born and their children.

That reveals another reason why Cato’s research on immigrant welfare use is better than Camarota’s work at the Center for Immigration Studies. He published the rate of welfare use by households, but he doesn’t publish the amount of welfare consumed by households, nor does he reveal the duration of their use. That leads to whacky results. For instance, Camarota counts a hypothetical immigrant who uses $200 of food stamps for one month of the year and no other welfare for the rest of the year the same as a native-born American who consumes $1,500 in benefits from Medicaid, Social Security, TANF, and SNAP every month. Camarota’s rates of welfare use by households hide extreme variation, while Cato’s analysis of the amount of money consumed will give you a more accurate picture of what’s going on.

Think of it this way: Federal welfare and entitlement reform that lowers the welfare consumed by the hypothetical native-born American above from $1,500 to $200 a month would be a monumental achievement. Scholars would write books, academic papers, and a million blog posts and news stories about it. American taxpayers would save money and the scale of welfare in this country would shrink to a level so low that European stereotypes about American state stinginess would start to match reality. But you’d never know it happened if you relied on Camarota’s method of measurement.

Camarota concludes that because an estimated 51 percent of legal immigrant households use at least one welfare program, the United States should select immigrants based on their likelihood of welfare use and more aggressively enforce immigration laws. But this conclusion depends entirely on a metric that does not measure fiscal burden. When measured properly on a per-capita basis, immigrants and their children consume less welfare than natives, whether or not dependent children of immigrants are included.

Policymakers concerned about welfare expenditures should use this simpler policy rather than trying to predict which immigrants might someday use public benefits or to lock out the enormous economic gains from immigration: reform welfare itself. Build a wall around the welfare state, not around the country. Better yet, combine that with shrinking the welfare state for everyone. Nativists have long been skeptical of these methods because, we suspect, they want to use the existence of the welfare state as an argument for reducing immigration. We propose a simpler and more popular way to resolve that complaint: Use immigration as an argument to reduce welfare. Even though immigrants use less, we can make sure they use less still. A system that limits immigrant access to public benefits removes the incentive problem altogether and avoids turning the government into a central planner tasked with forecasting individual immigrants’ future economic trajectories.