Immigrants Use Less Welfare Than Native-Born Americans

By David Henderson.

"The average value of welfare benefits per immigrant was $6,063 in 2020, or 27.3 percent less than the $8,335 average for native‐​born Americans. Figure 1 breaks down the numbers by type of welfare program. Immigrants consumed 36.9 percent less Social Security, 26 percent less Medicare, 10.7 percent less Medicaid, 11.5 percent less SNAP benefits, and 87.6 percent less TANF benefits than native‐​born Americans on a per capita basis. However, immigrants consumed 11.4 percent more in SSI benefits than natives, which translates to $19 more than natives on a per capita basis. Immigrants individually also consumed 42.9 percent more WIC benefits than native‐​born Americans, which translates to $7 more than natives per capita.

This is from Alex Nowrasteh, “Immigrants Use Less Welfare Than Native-Born Americans,” Cato at Liberty, February 1, 2023. It’s based on this longer study: Alex Nowrasteh and Michael Howard, “Immigrant and Native Consumption of Means-Tested Welfare and Entitlement Benefits in 2020,” Briefing Paper No. 148, January 31, 2023.

Nowrasteh is aware that 2020 was an unusual year because of the huge (hopefully temporary) expansion of the welfare state by a bipartisan Congress and and President Trump.

One thing these numbers reflect is that the biggest programs in the welfare state are Social Security and Medicare. A lot of immigrants have not been here long enough and/or have not earned high enough income (and paid the related FICA taxes) that they qualify for high Social Security payments. But Nowrasteh is aware of that and strips out Social Security and Medicare. He writes:

Immigrants still consumed less than natives when the entitlement programs of Social Security and Medicare are excluded from the analysis. The average immigrant consumed $2,273 in means‐​tested welfare benefits in 2020, about $310 less than the average American who consumed $2,583. That’s a difference of 12 percent.

As you can see, that narrows the difference substantially. So an immediate question to ask is whether immigrants pay their own way. Do they, as a whole, pay enough in taxes to make up for the welfare expenditures on them? Nowrasteh is aware that he hasn’t answered that question, writing:

Evaluating the net‐​fiscal effects of immigration – whether the taxes paid due to them being here is greater than their consumption of benefits – requires more complicated calculations and estimates. Stay tuned for those.

Whereas some advocates of allowing much more immigration have no problem with the welfare state, Nowrasteh isn’t in that category. He writes:

Elderly immigrants consume more Medicaid benefits than elderly native‐​born Americans, but natives are more expensive than immigrants in the same age groups on a per capita basis for all other large programs and most smaller ones. Immigrants are already legally restricted from accessing most welfare programs for some years after their arrival, but minor legal changes along the lines we suggest here would significantly reduce immigrant access to all these programs. Rep. Grothman (R‑WI) has introduced multiple bills to end welfare access to non‐​citizens, which is second best to massively scaling back welfare for all.

Note also his discussion of how immigration to Israel increased the welfare state in the short run and reduced it in the long run."