Immigration & welfare: solving the welfare problem will solve the welfare problem - not the immigration problem

National Review, June 16, 1997 by George J. Borias

Second, the safety net might also discourage immigrants who "fail" in the United States from returning to their home countries. A recent study (by economists Randall Olsen and Patricia Regan of Ohio State University) provides the first hint of such a magnetic effect by showing that the probability of out-migration is greatly reduced if the household receives public assistance in the United States.

Finally, magnetic effects arise from the huge disparities between different states' welfare benefits. In 1970, California's AFDC benefit level was only 68 per cent that of the median state; twenty years later it was 2.5 times that of the median state. By 1990, California's benefit package was the second most generous in the nation (surpassed only by Alaska's). It turns out that the fraction of new immigrants not on welfare who chose to live in California dropped between 1980 and 1990, from 30.1 to 28.9 per cent. But the fraction of new immigrants on welfare who chose to live in California rose sharply, from 36.9 to 45.4 per cent. The evidence, therefore, suggests a clustering effect upon immigrant welfare recipients as California's benefit level rose above that of other states.

The existence of ethnic networks and magnetic effects implies that immigrants respond to variations in welfare benefits. As a result, it should not be too surprising that the welfare problem in the immigrant population has grown considerably in the past two decades.

In 1996, after years of concern over the link between welfare and immigration, Congress included a number of immigrant-related provisions in the welfare-reform bill. According to the Congressional Budget Office, almost half of the $54-billion savings in this legislation can be traced directly to the restrictions on immigrant use of welfare. The welfare-reform bill banned most types of assistance for immigrants who would enter the country after August 22, 1996 (with the ban being lifted when the immigrants become citizens), and it mandated that most non-citizens present in the country on August 22, 1996, be kicked off the SSI and Food Stamp rolls within a year. The welfare-reform legislation was a capitulation by Congress to the idea that the problem was indeed welfare, not immigration.

Congress was wrong, however. Even before the ink dried the rumblings had begun that the restrictions on immigrant use of welfare were onerous, inhumane, and unjust. The immigrant provisions brought together a number of powerful interest groups all of which lobbied hard for their repeal. Governors and mayors could read between the lines of the welfare-reform bill: Hundreds of thousands of current (and future) immigrants on the federal payroll would, more likely than not, become charges of state and local governments. After all, someone would have to bear the costs of supporting the disabled, many of whom are elderly and not employable. Immigrant-rights organizations stressed the unfairness of a piece of legislation that made no provision for legal immigrants who had paid their taxes, had been eligible to be drafted, and had contributed in many other ways to U.S. economic life. Finally, as the shutting-off date approaches, the ever-alert media have begun airing case studies of very ill immigrants who received letters from the Social Security Administration notifying them that their benefits would be cut off within months.