The Cost of Welfare Use By Immigrant and Native Households

In September 2015, the Center for Immigration Studies published a landmark study of immigration and welfare use, showing that 51 percent of immigrant-headed households used at least one federal welfare program — cash, food, housing, or medical care — compared to 30 percent of native households. Following similar methodology, this new study examines the dollar cost of that welfare use.

The average household headed by an immigrant (legal or illegal) costs taxpayers $6,234 in federal welfare benefits, which is 41 percent higher than the $4,431 received by the average native household.
The average immigrant household consumes 33 percent more cash welfare, 57 percent more food assistance, and 44 percent more Medicaid dollars than the average native household. Housing costs are about the same for both groups.
At $8,251, households headed by immigrants from Central America and Mexico have the highest welfare costs of any sending region — 86 percent higher than the costs of native households.
Illegal immigrant households cost an average of $5,692 (driven largely by the presence of U.S.-born children), while legal immigrant households cost $6,378.
The greater consumption of welfare dollars by immigrants can be explained in large part by their lower level of education and larger number of children compared to natives. Over 24 percent of immigrant households are headed by a high school dropout, compared to just 8 percent of native households. In addition, 13 percent of immigrant households have three or more children, vs. just 6 percent of native households.

Introduction

In September 2015, the Center for Immigration Studies published a landmark study of immigration and welfare use, showing that 51 percent of immigrant-headed households (legal and illegal) use at least one federal welfare program, compared to 30 percent of native households.¹ "Welfare" refers to means-tested anti-poverty programs. These include direct cash assistance in the form of Supplemental Security Income (SSI) and Temporary Assistance for Needy Families (TANF); food aid such as free school lunch, the Women, Infants, and Children (WIC) nutrition program, and food stamps; Medicaid; and housing assistance in the form of rent subsidies and public housing. Not included are social insurance programs for which participants must generally pay into the system before drawing benefits, such as Social Security and Medicare.

The earlier CIS study was notable for showing much higher welfare participation rates than previously reported. The reason is that earlier studies measured welfare participation with the Annual Social and Economic Supplement (ASEC) of the Current Population Survey. The ASEC is a simple cross-sectional dataset widely used in labor market research. However, the ASEC substantially undercounts welfare participation, in part because it asks respondents to recall their welfare use over a period between three and 15 months before the interview takes place. To address the undercount problem, CIS used a more complex dataset called the Survey of Income and Program Participation (SIPP). As the name implies, the Census Bureau specifically designed the SIPP to measure participation in government programs. In addition, the SIPP is a "longitudinal" dataset, meaning it follows the same respondents over time, asking them about their monthly program participation in three different interview "waves" throughout the year. The result is a much more complete picture of welfare participation compared to what the ASEC provides.

Table 1, adapted from that CIS study, quantifies the differences. While the SIPP shows that 51 percent of immigrant-headed households and 30 percent of native-headed households used at least one welfare program in 2012, the comparable figures in the ASEC for immigrant and native households are just 39 percent and 24 percent, respectively.