Back Where We Started: 1996 Law Failed to Cut Overall Immigrant Welfare Use

By Steven A. Camarota March 2003

Read the report.

WASHINGTON (March 17, 2003) -- "Since passage of the Welfare Reform Act of 1996, welfare use by immigrant households has plunged."

So claimed a leading voice in the immigration debate last year. In 1996, Congress chose to address the problem of heavy immigrant welfare use not by reducing future immigration levels but rather by denying many legal immigrants access to welfare programs.

Has this approach worked? Are the claims of "plunging" welfare use by immigrants true?

No. A new report from the Center for Immigration Studies finds that, after falling slightly, the percentage of immigrant households using at least one major welfare program is now back where it was in 1996.

The report - "Back Where We Started: An Examination of Trends in Immigrant Welfare Use Since Welfare Reform," by Steven A. Camarota, the Center's Director of Research - examines use of four major welfare programs: Temporary Assistance to Needy Families (TANF), food stamps, Supplemental Security Income (SSI), and Medicaid. The findings show that while TANF and food stamp use by immigrant households has declined significantly, when all four programs are considered together, the welfare gap with natives has actually widened. Moreover, immigrant households comprise a growing share of households using the welfare system. The largest increases were in California, New York, Texas, Florida, Massachusetts, and Colorado.

Among the findings:


  • In 1996, 22 percent of immigrant-headed households used at least one major welfare program, compared to 15 percent of native households. After declining in the late 1990s, welfare use rebounded, with 23 percent of immigrant households using welfare compared to 15 percent of native households in 2001.

  • The persistently high rate of welfare use by immigrant households stems from their heavy reliance on Medicaid, which has actually risen modestly. In contrast, immigrant use of TANF has fallen significantly, from a little under 6 percent in 1996 to slightly over 2 percent in 2001, and food stamp use has also declined significantly, from about 10 percent to 6 percent These rates are now only modestly above those of natives.

  • The decline in TANF and food stamp use has not resulted in a significant savings for taxpayers because it has been almost entirely offset by increases in the costs of providing Medicaid to immigrant households. The average value of benefits and payments received by immigrant households has changed little and remains about $2,000 - 50 percent above that of natives.

  • Continuing high rates of immigrant welfare use, coupled with continuing very high levels of new immigration, has meant that the number of immigrant households using welfare has increased by 750,000 since 1996.

"If one of the goals of welfare reform was to reduce immigrant use merely of TANF and food stamps, then it has been a success. But if the goal was to save taxpayers money and foster less dependence on government, then it has largely failed," said Camarota. "Trying to cut immigrants off from the welfare system after they have been allowed into the country not only has been unsuccessful but is of questionable fairness. Such an approach sends the message that immigrants may come but should not expect to be treated like one of us. If we want immigrants to use less welfare, then we are going to have to consider changes in immigration policy."

Other findings:


  • Estimating welfare use for only households headed by legal immigrants also shows a significant decline in TANF and food stamp use. However, continued heavy reliance on Medicaid has meant that the percentage of legal immigrant households using the welfare system remained constant at about 22 percent between 1996 and 2001.

  • About 650,000 households headed by illegal aliens receive welfare, primarily Medicaid on behalf of their U.S.-born children. However, the value of benefits and payments received by legal immigrants is about twice that of illegal alien households. Thus an unintended consequence of enacting an amnesty for illegal aliens would to be to significantly increase welfare costs.

  • Welfare use remains high over time; immigrants in the country for more than 20 years still use the welfare system at significantly higher rates than natives.

  • Refugees do not account for the basic findings of this report. In 2001, 21 percent of households headed by non-refugee legal immigrants used a welfare program compared to 15 percent of natives.

  • The high rate of welfare use associated with immigrants is not explained by their unwillingness to work. In 2001, almost 80 percent of immigrant households using welfare had at least one person working.

  • One reason for the heavy reliance of immigrants on welfare programs is that a very large share have little education. The modern American economy offers very limited opportunities for such workers, thus many immigrants work, but their low incomes allow them to use the welfare system.

Policy Discussion: The last five years has show that politically and practically, it is almost impossible to exclude immigrants and their children from the welfare system once they have been allowed into the country. In fact, Congress repealed some restrictions on immigrants shortly after passing them, and many states chose to cover otherwise ineligible immigrants with their own funds. Legal immigrants can also avoid these restrictions simply by becoming citizens. Perhaps most important, immigrants can receive welfare benefits on behalf of their U.S.-born children. The only way to significantly reduce immigrant welfare use in the future is to admit fewer unskilled immigrants. In 2001, 42 percent of households headed by a legal immigrant without a high school degree used welfare, compared to 10 percent of immigrant households headed by a college graduate. The solution is not punitive welfare-eligibility bans but rather changes in immigration policy.

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The Center for Immigration Studies is a non-profit, non-partisan research organization which examines and critiques the impact of immigration on the United States. It is not affiliated with any other group.