New Emigration (from the U.S.) Measure Shows Japan Is Favored, Iran Is not

By David North on October 21, 2019

International migration is a two-way street. We at CIS tend to spend much more time writing about the arrivals of migrants, rather than their departures. And we are much more likely to deal with non-voluntary departures (deportations) than the voluntary ones.

This is totally appropriate as there is much more movement in than out; and the non-voluntary exits are a matter of public policy, while the voluntary ones are largely the results of private decisions.

Nevertheless, there is one steady stream of voluntary departures that could be subject, to an extent, to public policy.

I am referring to the overseas flow of America's Social Security benefit payments. Routinely a hair less than 1 percent of all Social Security beneficiaries collect their payments abroad; the other 99 percent do so in the States. The most recent available data, for December 2017, indicates that there are 659,454 recipients, mostly former workers, overseas. Of these, the vast majority are citizens — you can collect benefits out of the country if you are an alien, but only for six months.

The people who leave this country and take their monthly checks with them do have substantial ties here — and of course, some of them are U.S.-born. Those who were born abroad have to have enough Social Security earning credits — usually 40 quarters or 10 years of earnings — and have to be naturalized before they can have their checks mailed overseas. Many incoming migrants cannot qualify for the overseas benefits because either they did not become citizens, or because they did not have enough work in the formal economy (that which involved payroll taxes).

The distribution among other nations of the 659,454 presents both a puzzle as to why people go to where they go, and a policy opportunity that I have not seen expressed before.

Puzzle. The table that follows shows the distribution of Social Security beneficiaries overseas for the nations that have more than 10,000 of them; also included in the list is Iran. The other variable displayed for those 16 countries is the extent of the current foreign-born population in this country, the group from which the beneficiaries had been, largely, drawn.

Migrants: Where Do You Want to Retire?
The Homeland or the U.S.?

The foreign-born population here and the
location of overseas Social Security beneficiaries
1 2 3 4
Nation Foreign-Born
Population Residing
in the U.S., 2017 (rounded)
Social Security
Living Overseas,
2017, by Location*
Column 3 as a
Percentage of
Column 2
Iran 395,000 4 0.0%
Mexico 11,270,000 57,710 0.50%
All Nations 44,525,000 659,454 1.50%
Philippines 2,008,000 30,995 1.50%
U.K. 703,000 36,878 5.20%
Portugal 205,000 12,650 6.20%
Poland 419,000 30,068 7.20%
Germany 553,000 40,300 7.30%
France 186,000 15,711 8.50%
Ireland 120,000 10,219 8.50%
Italy 334,000 29,182 8.80%
Israel 143,000 12,644 8.80%
Spain 118,000 12,375 10.50%
Canada 809,000 110,779 13.70%
Australia 94,000 14,812 15.90%
Greece 131,000 23,487 17.90%
Japan 344,000 81,479 23.70%

Source: Data for column 2 is from the U.S. Census Bureau and for column 3 is
from the Social Security Administration’s "Annual Statistical Supplement, 2018",
Table 5.J11.

* An unknown portion of Social Security beneficiaries living abroad are U.S.-born
and are included in column 3; most of the beneficiaries in each row are assumed
to have been born in the country listed.

The table shows all nations in which there were 10,000 or more U.S. Social Security
beneficiaries in 2017, plus Iran.

The column on the right side of the table shows that the proportionate distribution of these retirees is far from even. The percentages of people with Japanese or Greek connections who take their checks overseas are much higher than those from Mexico and Iran. The last named nation is so toxic for people who have experienced the United States that only four of them receive retirement checks there. (This is not a published number — I called the Social Security Administration's data people and they checked and came up with this figure.)

Why the distribution shown? Why, particularly, is such a large portion of the American-Japanese population back in Japan? My sense is that if you are from a relatively prosperous homeland, like those in the bottom part of the table, you are more likely to return than to a poorer place like Mexico or the Philippines.

My further sense is that once that decision is made, the number of benefits, by country, also relates to how long people live, and the average life expectancy in Japan is 85.8 years while it is 78.0 for Mexico. The longer-lived countries have greater populations of Social Security beneficiaries, all else being equal, than those with shorter average lives. (The number in the United States is 79.4, and there are 52 countries with longer life expectancies than we have, a dismaying fact.)

Policy Opportunity. Although this will sound counter-intuitive, the United States would save money if more beneficiaries took their checks with them to other lands. This is because the retired are much more likely to use income-transfer programs like Medicaid, Medicare, food stamps, SSI, and public housing than younger people; one cannot collect from these programs when out of the country. What the nation would lose by more Social Security checks going overseas would be more than balanced by the savings that would result in those other programs.

My suggestion is that the Social Security policy that denies more than six months' worth of benefits to aliens going overseas to aliens be eliminated, which would, I suspect, increase the numbers of overseas beneficiaries by a substantial amount, and thus reduce costs to the Treasury. Perhaps the benefits for those out of the country should be funded by federal tax moneys, rather than by the Social Security trust fund.

On the other hand, many of the elderly aliens who might be tempted to leave the nation would examine the factors covered in the prior paragraphs and say "thanks, but no thanks."

The author is grateful to Emma Cummins, a CIS intern, for her research assistance.