In this section we examine characteristics of immigrants and natives by state. In order to obtain more statistically robust estimates at the state level, we use a combined two-year sample of the March CPS 2010-2011 for income, poverty, health insurance, educational attainment, and welfare use. Elsewhere in this paper, such as in Tables 10, 11, 12, and 26, we examined these and other issues at the national level based on only the March 2011 CPS. Thus, the national totals in the earlier tables will not exactly match the national totals found in the state tables. However, the difference between the national figures using only the 2011 CPS and a combined two-year sample are quite small. The state figures for public school enrollment, home ownership, and household crowding are based on the 2010 ACS and will match national totals found elsewhere in this report.
Household Income and Home Ownership. The first two columns of Table 29 report average household income in the top immigrant-receiving states. The second two columns report the more commonly used median household income of immigrant and native households. The states are ranked based on how much higher the native median income is than the immigrant median income. While in most of the top immigrant-receiving states native median income is higher, this is not true in every state. In Maryland and Virginia, the median household income of immigrant households is roughly the same as that of native households.
Where the difference in median household income between immigrant and native households tends to be much larger is in per-capita income. (Per-capita median income is calculated by dividing total household income by the number of people in the household.) Even in Maryland and Virginia, the per capita median income of immigrant households is 42 and 20 percent lower respectively than that of natives. In some states, the difference with natives is even larger. In Arizona, Colorado, Texas, California, Nevada, North Carolina, Illinois, and Massachusetts the per-capita household income of natives is at least 50 percent higher than immigrants. The per-capita figures indicate that immigrant households are a good deal poorer than native household once household size is taken into account.
The last two columns in Table 29 show the share of immigrant and native households that are owner-occupied. In most of the top immigrant-receiving states the gap between immigrant and native home ownership is 10 percentage points or more. However, it is interesting to note that in Nevada and Arizona, where immigrant household income tends to be much lower than that of natives, and as we will see poverty and welfare use tend to be much higher, home ownership rates are much closer than in many of the other top immigrant-receiving states.
Public Schools. Immigration has a very significant impact on public schools in many states. Table A3 in the appendix shows the number of public school students from immigrant and native households in all 50 states and the District of Columbia. Immigrants comprised the largest share of public school students in California, Nevada, New York, Texas, New Jersey, Florida, Hawaii, and Arizona. In these states more than one in four primary and secondary public school students are from immigrant households.
Table A3 also shows the share of public school students in immigrant and native households in poverty. Nationally, 28.9 percent of public school students from immigrant households are in poverty. Of all public school students in poverty, 29 percent are from immigrant households. In California 60.4 percent of public school students in poverty are from immigrant households, as are 41.8 percent in Nevada, 42.9 percent in Arizona, and 38.1 percent in Washington state. Even in some states not traditionally thought of as being heavily impacted by immigration, a very large share of public school students in poverty come from immigrant households. For example, 37.3 percent of public school students in Rhode Island in poverty are from immigrant households, as are 32.1 percent in Nebraska and 28.6 percent in Minnesota. Immigration has had a very large impact on the number of low-income public school students in the country and in many states.
Table A4 in the appendix shows the number and share of public school students by state who speak a language other than English. In 13 states, at least one out of five students lives in a household where a language other than English is spoken at home. In California and Texas, 48 and 37.2 percent respectively of all public school students live in such households. This does not necessarily mean that all of these students do not speak English well. But it does mean that school systems across the country will have to provide appropriate language instruction for some significant share of these students. Tables A3 and A4 show that immigration has added a large number of students to the public school system, many of whom speak a language other than English.
Table A5 in the appendix shows the average number of students per 1,000 households for all 50 states plus the District of Columbia. Like the national numbers already shown in Table 20, in almost every state there are many more public school students per immigrant household than per native household. In fact, Table A5 shows that in 28 states the number of students per immigrant household is 50 percent larger than for native households. In North Carolina, Arizona, California, Colorado, and Nevada the number of public school students per immigrant household is roughly twice that of native households.
Table 29 showed that immigrant household income tends to be a good deal less than native household income for most of the top immigrant-receiving states. For example, in Arizona the median household income for immigrant households is 60 percent less than that of natives and the mean household income is 40 percent less. Table A5 shows that immigrant households have twice the number of public school students than native households in Arizona. Even in Virginia, where immigrant household income is slightly higher than natives’, the average household still has 59 percent more public school students compared to native households. Since households are the primary unit by which taxes are assessed and collected, the relatively low income of immigrant households coupled with the much greater demand they create for public education means that in many parts of the country there will be a significant increase in school enrollment without a corresponding increase in the local tax base.
Overcrowded Households. Table A6 in the appendix shows household crowding by state. Table A6 shows household crowding is much more common among immigrant households than native households — 12.7 percent versus 1.9 percent. Because overcrowding is so much more common among immigrant households, they account for a larger share of all overcrowded households. As Table A6 shows, nationally 13.8 percent of all households are headed by an immigrant, yet immigrant-headed households account for 52 percent of all overcrowded households. In California, immigrant households account for 71.8 percent of all overcrowded households, even though they are 31.4 percent of all households.
It may not be surprising that immigrant households account for a very large share of overcrowded households in states such as New York (63.9 percent), Texas (54.9 percent), Illinois (54 percent), Nevada (52.7 percent), and Arizona (45.8 percent). What is more surprising is that they are 57.3 percent of overcrowded households in Maryland, 52.1 percent in Nebraska, 48 percent in Minnesota, and 39.7 percent in Utah. Immigration has added significantly to the stock of overcrowded households in many states, including some that are not traditionally seen as heavily impacted by immigration. In all, immigrant households account for one-third or more of overcrowded households in 25 states plus the District of Columbia.
Poverty and Near Poverty. Table 30 reports the percentage and number of immigrants and their U.S.‑born children who live in poverty compared to natives and their children. As in the other tables in this report, the figures include immigrants and the U.S.-born minor children (under age 18) of immigrant fathers. While the foreign-born tend to have much higher poverty rates in the top-receiving states, in Virginia, Maryland, and New Jersey the difference with natives is not that large. In contrast, immigrants and their children tend to have much higher rates of poverty in Arizona, Colorado, Illinois, Minnesota, North Carolina, Texas, and Washington State. Turning to the share in or near poverty, (defined as below 200 percent of the poverty threshold), with the exception of Virginia, immigrants and their young children have much higher rates of poverty/near poverty than natives in the top states of immigrant settlement. As already discussed, those with incomes below this amount usually do not pay income taxes, and they typically become eligible for means-tested programs.
Health Insurance Coverage by State. Table 31 shows the share of immigrants and their children without health insurance by state. With the exception of Massachusetts, the difference between immigrant and native insurance coverage rates is enormous. In 10 of the states shown, immigrant rates of uninsurance are double those of natives.
The impact of immigration on the health care system as a whole can also be seen when we consider the share of immigrants and their minor children who are either uninsured or enrolled in Medicaid, which is shown in the second half of Table 31. Based on the 2010-2011 CPS, the share of immigrants and their children on Medicaid or without health insurance is 49 percent.49 In comparison, 28.5 percent of natives and their young children are uninsured or on Medicaid. In Texas, North Carolina, Arizona, California, New York, Georgia, and Minnesota, more than half of immigrants and their children are either uninsured or on Medicaid. Moreover, in New York, Colorado, Florida, Illinois, and Washington state nearly half of immigrants and their children are uninsured or on Medicaid. The impact of immigration on the health care systems in these states and the nation is clearly very large.
It is worth noting that by subtracting the share on Medicaid or uninsured from the share who are uninsured the percentage on Medicaid alone can be calculated. In most of the states listed in Table 31, immigrants and their children are more likely to be on Medicaid than natives and their children. In Massachusetts, where the rates of uninsurance are very similar for immigrants and natives, part of the reason for this is that 30 percent of immigrants and their young children are on Medicaid compared to 18.4 percent of natives.
Earlier in this report we observed that immigration had a very large impact on the nation’s health care system. Table 32 shows the share of each state’s population comprised of immigrants and their minor children and their share of the uninsured and in poverty. The table reads as follows: immigrants and their minor children comprise 36.8 percent of California’s overall population and they are 51.2 percent of those in poverty. They are also 52.3 percent of the uninsured in the Golden State. Table 32 shows that immigrants tend to be a much larger share of the poor and uninsured in these states than they are of the overall population.
Welfare Use by State. Table 33 shows the percentage of immigrant- and native-headed households using at least one major welfare program. Programs included are TANF, SSI, general assistance, Food Stamps, WIC, free/subsidized school lunch, public/rent subsidized housing, and Medicaid. As we saw in Table 12, the biggest difference in program use is for Medicaid and food assistance programs. For state governments, Medicaid is a particular concern because between one-third to one-half of the program’s costs are typically borne by state taxpayers. The largest percentage-point differences in overall welfare use for immigrants and natives are found in Minnesota, New York, Texas, California, Colorado, Washington, and Arizona. The smallest differences are in Virginia, Georgia, Nevada, Maryland, and New Jersey.
Estimated State and Federal Income Tax. In addition to welfare use, Table 33 also shows estimated income tax payments for immigrant and native households. Based on the characteristics of immigrant families and individuals, the Census Bureau estimates tax liability. That is, what should be paid in income taxes given income, dependents, home ownership, etc. This estimate does not have any information about tax compliance. It is only an estimate of what should be paid if the law is followed. Figures for state and federal tax are shown in the far right of Table 33. In terms of state income tax, native households have higher tax liability than immigrant households in every state but Virginia. The average difference across the states shown is 29 percent, which is significant. The Census Bureau’s estimated state tax liabilities indicate that in almost all of the top immigrant-receiving states that have state income taxes, immigrants pay less than natives. It is worth noting the Bureau’s estimated tax liability (state and federal) likely understates tax liability for those with high incomes.
In terms of federal income tax, the difference with natives is much larger. On average native households have federal income tax liability that is 40 percent higher. Again, Virginia is the exception. This report has shown that immigrant households have higher rates of welfare use and public school enrollment. And immigrants and their children are much more likely to lack health insurance. Perhaps most important, immigrant households are much larger on average than native households. These facts coupled with lower average income tax liability raise the clear possibility that immigrant households are a significant net fiscal drain. However, several things must be kept in mind. First the tax estimates are not actual tax payments or even self-reported tax payments, they are Census Bureau derived estimates. Tax compliance rates are likely to differ significantly for immigrant and native households, particulary for illegal immigrant households, which are included in the data. Second, state and federal income are not the only taxes collected by government. Third, welfare and education are by no means the only sources of expenditures for state or federal government. In short, the tax estimate and the other information in this report are not a balance sheet of taxes vs. expenditures. But the information is consistent with the very real possibility that immigrant households are on balance a net fiscal drain.
Education Levels by State. Table 34 shows the education level of immigrants and natives (ages 25 to 65) in the top immigrant-receiving states. As has already been discussed at length, a much larger share of immigrants than natives have not completed high school. This is also the case in every state in Table 34. The difference is largest in Colorado, followed by Texas, California, and Arizona. The gap is smallest in Virginia, Florida, and Massachusetts. At the high end of the educational distribution the situation is somewhat different. In states such as Colorado, Arizona, California, Texas, and North Carolina immigrants are much less likely to have at least a bachelor’s degree. However, in a number of states immigrants are as likely or even more likely to have completed college, including Florida, Washington, Minnesota, Maryland, and Virginia. Looking back on Tables 29 to 33, they show that, in general, in states where immigrant educational attainment is lowest relative to natives the gap with natives in socio-economic status tends to be the highest. In contrast, where immigrants are more educated, the gap is much smaller.
State Work Force. Table 35 shows work force characteristics by state. The first column shows the number of immigrant workers in each state based on 2010/2011 data. The second column shows the number of immigrant workers in the state who arrived in 2000 or later. The third column shows the share of all workers in the state who are foreign-born. Thus the table reads as follows: Based on 2010 and 2011 data there were 5,537,000 immigrant workers in California, 1,457,000 of whom arrived in 2000 or later. Overall, 34.4 percent of all workers in the state were immigrants. The fourth column shows the number of natives (18 to 65) not working, the fifth column shows the percentage of natives (18 to 65) working in 2010-11, and the sixth column shows the share of natives (18 to 65) working in 2000/2001. Thus, in California, 5,405,000 natives ages 18 to 65 were not working in 2010/2011. Overall, 64.9 percent of natives in this age group held a job. Column six shows that in California at the beginning of the last decade 74.1 percent of natives in this age group worked. The last three columns in the table show the same information as columns four, five, and six, except that the figures are only for young natives (18 to 29) with no more than a high school education. This includes high school dropouts and those who have graduated high school but have no additional schooling. Young workers are reported separately because they are the group most likely to be in competition with immigrants for jobs at the bottom end of the labor market.
Table 35 shows that immigrants make up a large share of workers in almost all of these states. In California, immigrants are more than a third of workers, and they are roughly a quarter of all workers in New Jersey, New York, and Nevada and about a fifth of workers in Florida, Texas, and Maryland. The table also shows that in all of these states there is a very large population of working-age, native-born people who are not employed. For example, in California, New Jersey, New York, Florida, Texas, Arizona, Washington, Massachusetts, Illinois, Virginia, Georgia, and North Carolina there are more than one million working-age natives not employed. If we compare the number of natives not working to the number of post-2000 immigrants it shows that in almost every state the number of natives (18 to 65) not working is about four times the number of newly arrived immigrants. And in many states the proportion is even larger.
Those who are not working are either unemployed, which means they have looked for a job in the last four weeks, or they are not looking for work. In total, there are 30 million adult working-age (18 to 65) natives not employed in the 16 states shown in Table 35. There are an additional 22.7 million working-age natives not working in other states. Of those who are not employed, some are discouraged workers who would like to work, but have not looked in the last four weeks and so are not counted as officially unemployed. Some of those not working are disabled, some are parents taking care of young children, and others are college students who could work but do not wish to do so. (There are virtually no college students in the right side of Table 35 because those attending college have at least some education beyond high school and are therefore not included.) It would be mistake to think that all of those not working want to work or are even able to do so. But even if only one in five of the 52.7 million working-age natives not employed got a job, they would be a larger population than the 7.14 million new immigrant workers added in the last decade. Put a different way, if employment rates nationally for working-age natives simply returned to 2000-01 levels (75.2 percent), then 12.2 million more natives would be working in 2010/2011.
The starkest finding in Table 35 is the dramatic deterioration in the employment rate of working-age natives. On average, their employment rate declined by more than seven percentage points in these states from the beginning of the decade. This is a very large decline because, like unemployment rates, employment rates do not swing dramatically. A seven percentage-point decline is a very large change. Even more striking is the decline in the employment rate of young (18 to 29) less-educated natives. On average, the share holding a job in this group declined 15 percentage points in these states. Employment rates were already relatively low for this group, so the decline is that much more profound. In California, New Jersey, New York, Florida, Washington, Illinois, and North Carolina fewer than half of these individuals had a job in 2010 and 2011. In these same states, in 2000 and 2001, roughly two-thirds of this demographic held a job.
Although not shown in Table 35, the dramatic deterioration in employment among natives began before the recession. The share of 18 to 65 year olds working was 72.9 percent in 2006/2007, lower than the 75.2 percent at the start of the decade, even though March of 2006/2007 represents the peak of the last economic expansion. More striking is that the share of young, less-educated natives working was 61.1 percent in 2006/2007 compared to 65.9 percent at the start of the decade. Clearly the current downturn caused a massive decline in work among this population. But the decline began well before the Great Recession.
Table 35 shows that immigrants comprise a large share of workers in many states. But these same states also have a very large number of native-born people not holding a job. If immigration was curtailed in the future, there certainly seems to be a very large pool of potential workers for employers to draw upon. Of course, as mentioned above, many people not working do not wish to work. But again, if employment rates nationally for working-age natives simply returned to 2000-2001 levels, then 12.2 million more natives would be working, which is more than all of the new immigrant workers allowed into the country in the prior decade — legally and illegally.
Illegal Immigration by State
It is well established that illegal aliens do respond to government surveys such as the decennial census and the Current Population Survey. While Census Bureau surveys do not ask the foreign-born if they are legal residents of the United States, the Department of Homeland Security (DHS), former INS, the Pew Hispanic Center, and the Census Bureau have all used socio-demographic characteristics in the data to estimate the size of the illegal alien population. We follow this same approach.50 Using a combined two-year sample of the CPS (March 2010 and 2011) we estimate 10.5 million illegal immigrants, or slightly less than 28 percent of the foreign-born population. It must also be remembered that these figures are only for those in the CPS, not those missed by the survey. Estimates prepared by other researchers often adjust for undercount in Census Bureau data. While there is debate about the number missed, most research indicates that roughly 10 percent of illegals are not counted in Census Bureau surveys such as the CPS.51 Thus, the true size of the illegal population could be 11.5 million. If the undercount is larger, then the total illegal alien population is larger. By design, this estimate is consistent with those prepared by the Census Bureau, DHS, and Pew Hispanic Center.52
While it may seem obvious, it is important to note that in the discussion that follows immigrants can only be legal or illegal. As a practical matter, this means, for example, that if our estimate for poverty among illegals is too high, then the poverty rate for legal immigrants must be correspondingly too low. Conversely, if the estimated poverty among illegal immigrants is too low, then the poverty rate for legal immigrants must be too high.
One of the most important characteristics of illegal immigrants is the very large share with little formal education. We estimated that 54 percent of adult illegal immigrants (25 to 65 years of age) have not completed high school, 25 percent have only a high school degree, and 21 percent have education beyond high school. As already discussed, this is critically important because education is such a determinant of socio-economic status in the modern American economy. We also estimate that 58 percent of the illegal population comes from Mexico, 12 percent is Central American, 9 percent is from East Asia, and 7 percent is from South America, while Europe, South Asia, and the Caribbean account for about 3 percent each. Although these estimates are consistent with other research findings, including those produced by the federal government, it should be obvious that there is no definitive means of determining whether a respondent in the survey is an illegal alien.
Illegals by State. Below we examine the demographic characteristics of illegal aliens by state. Since the sample size is much smaller for individual states than for the nation as a whole, the results should be interpreted with caution, especially for the smaller states. In addition to issues associated with sample size, it should also be remembered that the identification of illegals in the survey also contains some error. Table 36 reports our best estimates for the number of illegals by state in the CPS. (It should be noted that even if the undercount is 10 percent nationally, as many researchers think, it is possible that this not uniform across states.) Table 36 shows that California has by far the largest illegal population, followed by Texas, Florida, and Illinois. Those four states account for half of the illegal immigrant population.
Employment of Illegal Immigrants. Table 36 shows the number of illegal immigrants in the labor force in each state. In total, nearly 7.1 million illegal immigrants (7.8 million if adjusted for undercount) are in the U.S. labor force. This equals 67 percent of the total illegal immigrant population in the United States. Table 35 showed the number of native-born 18- to 65-year-olds not working and the number of young (18 to 29) less-educated natives not working by state. Table 36 reports the number of less-educated natives 20 to 65 not working and the number of teenagers (16 to 19) not working. Less-educated is defined as having no education beyond high school. It is often suggested that there are simply no young or less-educated Americans available to fill jobs taken by illegal immigrants. Like Table 35, Table 36 shows that there are a very large number of potential workers in the top immigrant-receiving states. In the states shown in Table 36, there are 12.5 million less-educated adult natives (20 to 65) not working and 7.3 million native-born teenagers not employed. Nationally, there are 35.6 million people in these two categories. While many of the individuals not working many not wish to work or cannot work, if only one in five took a job it would roughly equal the entire illegal immigrant work force.
Poverty Among Illegals. Table 37 reports the share of illegals and their U.S.-born children (under 18) who live in poverty or near poverty, with near-poverty defined as less than 200 percent of the poverty threshold. Not surprisingly, Table 37 shows that illegals tend to have a very high rate of poverty and near-poverty. Recall from Table 30 that, based on the 2010 and 2011 CPS, 13.2 percent of natives and their children lived in poverty.53 At 26 percent, the national rate for illegal immigrants by themselves is about twice that of natives. The rate is even higher (30 percent) when their U.S.-born children are included.
The share of illegals in or near poverty follows the same pattern as the share in poverty. Rates for illegals tend to be dramatically higher than those of natives. In every state shown, with the exception of Massachusetts, Washington, and Virginia, the majority or close to a majority of illegal immigrants and their minor children live in or near poverty.
Nationally, illegal immigrants and their U.S.-born children account for 9.9 percent of all persons in poverty, compared to their 4.9 percent share of nation’s total population. Illegal aliens clearly have low incomes, and the low-income population in the United States is clearly larger because of immigration. Nonetheless, illegal immigration accounts for only a modest share of the total population in poverty. Moreover, it should also be clear that most illegal immigrants do not live in poverty.
It is worth noting that of all immigrants and their children who live in poverty, 40 percent are illegal aliens or the young children of illegal aliens. Based on the 2010 and 2011 CPS, 4.4 million illegal immigrants and their children live in poverty, out of 11.4 million immigrants and their children in poverty. Most low-income immigrants are not illegal aliens. Put a different way, legal immigration has a larger impact on the size of the poor population in the United States than does illegal immigration.
Health Insurance Among Illegals. Table 38 reports the share of illegal immigrants and their minor children without health insurance coverage. Not surprisingly, most illegals are uninsured. Nationally, we estimate that 62 percent of illegals lack health insurance, compared to about 14 percent of natives (see Tables 11 and 31). When their U.S.-born children are counted the figure is 50 percent. Because these children are eligible for Medicaid, they tend to be more likely to be covered by insurance than their illegal immigrant parents.
Illegals also account for a large share of the total uninsured population. Nationally, 14.6 percent of all uninsured persons in the United States are estimated to be illegal aliens or the young children of illegal immigrants. This compares to their 4.9 percent share of the nation’s total population. In some states the impact is much larger. In Arizona, California, Nevada, and Texas, roughly one-fourth of the uninsured are illegal immigrants and their children. In New Jersey, Washington, and North Carolina roughly one-fifth of the uninsured are illegal immigrants.
Welfare Among Illegals by State. Table 39 shows the share of households headed by illegal aliens using various welfare programs. It shows that a large share of illegal alien households use the food assistance programs (food stamps, WIC, and free lunch) and Medicaid. But use of cash assistance (TANF, State General Assistance, and SSI) is generally very low. It should also be added that the share of households headed by illegals in public or rent-subsidized housing is zero in our estimates.54 It must be remembered that, in general, illegals cannot use the welfare system themselves. But their U.S.-born children can be enrolled in Medicaid and receive food assistance. Table 39 reflects the fact that a very large share of illegal immigrants have low incomes and as a result their children can enroll in means-tested programs. This is important because it means that efforts to bar illegals from using welfare programs will be ineffective. Very few are using these programs directly and their U.S.-citizen children will continue to enjoy the same welfare eligibility as any other American citizen.
It should also be noted that the high rates of Medicaid and food assistance use by illegal immigrant households is not caused by an unwillingness to work on the part of illegals. In fact, 96 percent of illegal household have at least one worker, much higher than the rate for native households. Rather, with half of adult illegals not having completed high school, their average income in the modern economy will be very low. The American welfare system is geared toward helping low-income workers, especially those with children. Since a very large share of illegals work, have low incomes that reflect their education, and have U.S.-born children, it should not be surprising that many illegal households use the welfare system. Use of means-tested programs by illegal workers is important because it indicates that the desire of employers to have access to large numbers of unskilled immigrant workers creates significant costs for taxpayers. This does not mean that the overall effort to help low-income workers is misplaced. But it does raise the question of why we have an immigration policy that tolerates so many unskilled illegal workers.
Illegals and the School-Age Population. Table 40 reports the estimated number and share of the school-age population (five to 17) in the United States that is comprised of illegal immigrants. Overall, illegals account for 1.3 million school-age children, or 2.4 percent of all five- to 17-year-olds. This is smaller than the 3.4 percent illegals represent of the nation’s total population because immigrants, including illegal aliens, generally come to the United States after age 17, so there are relatively fewer illegal immigrants under age 18. Table 40 also shows that school-age illegal aliens plus the U.S.-born children of illegal aliens comprise about 7.2 percent (3.9 million) of the total school-age population. In states like Nevada, Arizona, Texas, California, Washington, Illinois, and New Jersey illegal immigrants comprise a much larger share of the school-age population than they do nationally.
Since per-student expenditures in the United States are roughly $10,000 a year, it is likely that some $13 billion annually goes to educate illegal aliens in public schools. The total cost for educating illegal aliens and their U.S.-born children likely comes to over $39 billion a year.
School expenditures for illegal immigrants and their children provide a good example of how what one chooses to include in a cost estimate of illegal immigrants will have a very large impact on the results, even if there is some agreement on numbers. There are many more U.S.-born school-age children of illegal immigrants than there are children who are illegal immigrants themselves. Including the U.S.-born children in any cost estimate dramatically increases the expenditure side of the ledger. Because the presence of these students in the country is entirely the result of illegal immigration, it is reasonable to count them as a cost. But some researchers may choose not to do so. And this decision will likely change the results. Therefore, it is important when examining cost estimates to see what is included, particularly as it relates to the U.S.-born children of illegals.
Illegals’ Household Income. Table 41 shows the average income and size for households headed by illegal immigrants. We use average income and not median income because at the state level it is not possible to calculate median income figures because of sample size in most states.55 Thus, the incomes in Table 41 may seem high, but they are mean or average incomes, not median incomes. (For those interested, the last row at the bottom of Table 41 does show the median household income of illegal immigrants for the entire country.) Proportionately, the difference between the median income of illegal immigrants and natives is very similar to the difference in mean incomes.
Not surprisingly, Table 41 shows that the mean income of illegal households is much less than the mean income of native households in every state. At the same time, these households are much larger on average than native households. Overall, the average income of natives is 39 percent higher than those of illegal immigrants and illegal alien households are 56 percent larger on average. As already discussed, lower household income coupled with larger household size means that illegal alien households will pay less in taxes and use more in services than native households because households are the primary basis on which taxes are assessed and benefits distributed in the United States. Even assuming that illegals pay all the taxes they are supposed to, given their average household income and size it is difficult for them not to create a significant fiscal drain.
The fiscal problem associated with illegal immigrant households can be seen in the area of public education. As discussed above, the total cost for educating the children of illegal immigrants is roughly $39 billion a year. We estimate the combined total income of illegal immigrant households at about $162 billion. If these estimates are correct, it would mean that just to cover the costs of education they would have to pay 24 percent of their income. Even if illegal immigrants paid all the income and payroll taxes that they should, given their lower income and large household size it seems doubtful that they would pay enough in taxes to cover the education of their children, let alone all the other costs they create.
But again, this is because of the education level of illegals, not because they do not work. The vast majority of working-age illegals work. In fact, we estimate that 96 percent of illegal alien households have at least one person working. This compares to 76 percent of native-headed households. But because of their education levels, a very large share of illegal immigrants have low incomes. This is the primary reason that their presence in the United States tends to strain public coffers.
Table 42 shows the characteristics of adult immigrants by legal status based on the 2010 and 2011 CPS. It also shows characteristics for less-educated legal immigrants. (Less-educated is defined as having no more than a high school diploma.) There are several important findings that can be drawn from the table. First, the inclusion of illegal immigrants in Census Bureau data does reduce the overall socio-economic status of immigrants. But in most cases it does not fundamentally change the overall picture. For example, the poverty rate for adult immigrants overall is 18.5 percent — 61 percent higher than for native-born adults. When adult illegal immigrants are removed, the figure for adult legal immigrants alone is still 15.9 percent — 38 percent higher than for adult natives. The share of adult immigrants in or near poverty follows a similar pattern. It is 51 percent higher than adult natives overall and it is 33 percent higher for legal immigrants alone. Health insurance coverage shows a more significant narrowing with natives when illegal immigrant are excluded, but legal immigrants are still much more likely than natives not to have insurance. Table 42 shows that the overall welfare use rate for all immigrants is 63 percent higher than native households. When illegal immigrants are excluded it is still 45 percent higher.
Average income and median earnings show a somewhat different pattern. The gap between immigrants and natives is moderate in size to begin with and excluding illegals narrows the difference further. For example, the average income of all adult immigrants is 81 percent that of natives, for adult legal immigrants it is 90 percent. This confirms what has been shown elsewhere in this report: A large share of immigrants have very low incomes and live in or near poverty, lack insurance, and use the welfare system. But the overall averages or median incomes are closer to natives. This is true for immigrants generally as well as for legal immigrants.
The second conclusion to draw from Table 42 is that legal status is no guarantee of success. Less-educated legal immigrants have low income, low health insurance coverage rates, and high welfare use relative to natives. Many in Congress, as well as President Obama, have argued for giving legal status to illegal immigrants as well as increased levels of legal immigration. Since illegal aliens are overwhelmingly less-educated, we can gain insight into the possible effects of legalization by looking at the economic situation of less-educated legal immigrants. As will be recalled, we estimate that 54 percent of illegal immigrants have not graduated high school and 25 percent have only a high school degree. Thus eight out of 10 illegal immigrants have no more than a high school education.
Table 42 shows that legal immigrants with this level of education make extensive use of the welfare system. Nearly half of households headed by less-educated legal immigrants use at least one major welfare program. The share of adult less-educated legal immigrant adults living in poverty is 23 percent and the share in or near poverty is 52 percent. Poverty and near-poverty are very common among less-educated legal immigrants, as is the share without health insurance (30 percent). Because education is such a key determinant of economic outcomes, legalization will not solve the problems of welfare use or low income associated with an illegal immigrant population that is largely unskilled.56 Further, the results in Table 42 do not mean the socio-economic status of illegal immigrants would not improve with legalization. What it does mean is that a legalization would almost certainly leave illegal immigrants much poorer on average than natives or even the average legal immigrant.57