An analysis of Census Bureau data shows that the nation's foreign-born or immigrant population (legal and illegal) reached a new record of more than 35 million in March of 2005. The data also indicate that the first half of this decade has been the highest five-year period of immigration in American history. This Backgrounder provides a detailed picture of both numbers and the socio-economic status of immigrants.
Among the report's findings:
The 35.2 million immigrants (legal and illegal) living in the country in March 2005 is the highest number ever recorded -- two and a half times the 13.5 million during the peak of the last great immigration wave in 1910.
Between January 2000 and March 2005, 7.9 million new immigrants (legal and illegal) settled in the country, making it the highest five-year period of immigration in American history.
Nearly half of post-2000 arrivals (3.7 million) are estimated to be illegal aliens.
Immigrants account for 12.1 percent of the total population, the highest percentage in eight decades. If current trends continue, within a decade it will surpass the high of 14.7 percent reached in 1910.
Of adult immigrants, 31 percent have not completed high school, three-and-a-half times the rate for natives. Since 1990, immigration has increased the number of such workers by 25 percent, while increasing the supply of all other workers by 6 percent.
Immigrants were once significantly more likely to have a college degree, but the new data show that natives are now as likely as immigrants to have a bachelor's or graduate degree.
The proportion of immigrant-headed households using at least one major welfare program is 29 percent, compared to 18 percent for native households.
The poverty rate for immigrants and their U.S.-born children (under 18) is 18.4 percent, 57 percent higher than the 11.7 percent for natives and their children. Immigrants and their minor children account for almost one in four persons living in poverty.
One-third of immigrants lack health insurance -- two-and-one‑half times the rate for natives. Immigrants and their U.S.‑born children account for almost three-fourths (nine million) of the increase in the uninsured population since 1989.
The low educational attainment of many immigrants and resulting low wages are the primary reasons so many live in poverty, use welfare programs, or lack health insurance, not their legal status or an unwillingness to work.
A central question for immigration policy is: Should we allow in so many people with little education, which increases job competition for the poorest American workers and the size of the population needing government assistance?
Immigrants make significant economic progress the longer they live in the United States, but even immigrants who have lived in the United States for 14 or 15 years still have dramatically higher rates of poverty, lack of health insurance, and welfare use than natives.
States with the largest increase in immigrants are California, Texas Georgia, New Jersey, Maryland, North Carolina, Pennsylvania, Washington, Virginia, Arizona, Tennessee, Minnesota, Nevada, New Mexico, South Carolina, and Mississippi.
Immigration accounts for virtually all of the national increase in public school enrollment over the last two decades. In 2005, there were 10.3 million school‑age children from immigrant families in the United States.
Immigrants and natives exhibit remarkably similar rates of entrepreneurship, with 13 percent of natives and 11 percent of immigrants self‑employed.
Recent immigration has had no significant impact on the nation's age structure. Without the 7.9 million post-2000 immigrants, the average age in America would be virtually unchanged at 36 years.
Data Source and Methods
Data Source. The information for this Backgrounder comes primarily from the March 2005 Current Population Survey (CPS) collected by the Census Bureau, which is also called the Annual Social and Economic Supplement. The March data used in this study include an extra‑large sample of minorities and are considered one of the best sources of information on the foreign born.1 The foreign-born are defined as persons living in the United States who were not U.S. citizens at birth.2 In this report the terms foreign‑born and immigrant are used synonymously. Because all children born in the United States to immigrants are by definition natives, the sole reason for the dramatic increase in the foreign- born population is new immigration. The immigrant population in the 2005 CPS includes between nine and 10 million illegal aliens and between one and two million persons on long‑term temporary visas, mainly students and guest workers. The CPS does not include persons in "group quarters," such as prisons and nursing homes. The survey is one of the most extensive conducted by the government and includes a host of questions on everything from poverty and income to welfare use, health insurance coverage, and educational attainment. We rely on responses to these questions to examine the demographic characteristics of the nation's immigrant population.
Recent Trends in Immigration
Figure 1 reports the number of immigrants living in the United States based on the CPS collected in March of each year from 1995 through 2005. The figure shows that between March 1995 and March 2000, the foreign-born population grew by 5.7 million, or about 1.1 million per year.3 The figure also shows that between 2000 and 2005 the immigrant population grew 5.2 million, or 1.04 million per year. These two numbers are the same statistically. Thus, it would appear that the growth in the foreign-born population during the economic expansion in the second half of the 1990s was the same as during the recession and recovery -- 2000 to 2005.4
Deaths and Out-Migration. When growth in the foreign-born population is discussed, it must be remembered that the increase over time represents a net figure and does not reflect the level of new immigration. New arrivals are offset by deaths and out-migration. Given the age, sex, and other demographic characteristics of the immigrant population, it is likely that there are about 7,500 deaths per million immigrants each year. This number does not change much from year to year, but it does increase gradually over time as the immigrant population grows. As a result, there were about 80,000 more deaths per year among immigrants in 2005 than in 1995 because the overall population grew by almost 11 million. This means that a slower net increase in the immigrant population may not indicate a falling level of new immigration.
There is more debate about the size of return migration. But the Census Bureau has estimated that about 280,000 immigrants living here return home each year.5 In total, deaths and return migration equal 500,000 or 550,000 a year. It should also be remembered that like any survey, there exists sampling variability in the CPS. The margin of error, using a 90-percent confidence interval, for the foreign-born is between 640,000 and 700,000 for data from 1995 to 2001 and between 520,000 and 540,00 for 2002-2005 data. (The survey was redesigned for 2002, so the size of the statistical error changed.) Thus one could say that in 2005 the immigrant population was 35.16 million plus or minus 538,000. Because of sampling error, even seemingly large year-to-year changes may not be meaningful. When looking for trends it is much better to compare differences over several years.
Flow of New Immigrants. Another way to examine trends in immigration is to look at responses to the year-of-arrival question. The CPS asks individuals when they came to America to stay. The 2005 CPS indicates that 7.9 million immigrants (legal and illegal) settled in the United States between January 2000 and March 2005, which means that on average more than 1.5 million immigrants arrived annually in the United States. The 2000 CPS shows that 6.64 million immigrants (legal and illegal) settled in the country between 1995 and 2000.6 The difference between these numbers is statistically significant, indicating that more immigrants have arrived in the United States in the five years since 2000 than in the five years prior to 2000. The period 2000-2005 appears to be the highest five-year period of immigration in American history.
A Peak After 2000? It is reasonable to wonder how the flow of immigrants has been affected by the downturn in the economy and September 11. A recent study by the Pew Hispanic Center found that immigration rose significantly at the end of the 1990s, peaking in 2000, and falling off thereafter.7 The study is based mainly on CPS data, and another survey called the American Community Survey (ACS), and the 2000 Census for the 1990s. In evaluating the Pew study it is very important to understand that the numbers in the study "are meant to show trends, not levels of immigration."8 In brief, we too find some evidence in each of these data sources that immigration may have been higher from 1999 to 2001 and lower before and after. But the Census Bureau, which collects the data, applies the same population controls to them, so by design the data are supposed to produce similar results.9 Given the limitations in the data itself, it is very difficult to measure changes in year-to-year immigrant flows. For one thing, the CPS itself was redesigned after 2001, making year-to-year comparisons before and after this date more difficult. As for the ACS, it is not fully implemented, covers less than half the nation's counties, and it too has undergone changes over the last five years. Moreover, in both surveys, the number of just-arrived immigrants comprises less than 1 percent of the sample in many cases. Thus the results can vary quite a bit from year to year.
One of the biggest issues when trying to measure year-to-year changes using the CPS is that the Census Bureau groups respondents by multiple years of entry, making it impossible to know the number of new arrivals for individual years. This is done to preserve the anonymity of respondents. (It is, however, possible to examine the number who entered in the last five years collectively because those years correspond to the grouping of data.) The number of new arrivals in some of these multiple-year groupings are not statistically different from each other, implying that there was no change in immigrant flows 2000 to 2005. In an effort to overcome this grouping of years, Pew tries to use another question in the CPS, which asks immigrants where they lived last year. But a very large share of respondents, in some cases nearly one-third, give an answer to this question that is inconsistent with their answer to the year-of-arrival question.10
Another issue is that for some years growth in the foreign-born population does not match what we would expect if immigration fluctuated in the way the Pew study indicates.11 There are other issues with the data as well.12 What's more, if there was a rise and fall, it is not at all clear that the change had anything to do with the economy, as the Pew study suggests.13 None of this means that there was not a rise in immigration in the late 1990s and a fall off after 2001. However, the limitations of the data make it very hard to say how the flow of immigrants changed year to year.
From a policy perspective, what is far more important than a possible temporary fluctuation in the flow of new immigrants is that immigration remained very high even during the economic downturn. What's more, if there was a slowdown, the 2005 data indicate that immigration has resumed its record pace.14 And the 7.9 million immigrants who arrived between 2000 to 2005 make it the highest five-year period of immigration in American history.
Illegals in the CPS. It is well established that illegal aliens do respond to government surveys such as the decennial census and the Current Population Survey. While the CPS does not ask the foreign-born if they are legal residents of the United States, the Urban Institute, the 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 population.15 Our preliminary estimates for the March 2005 CPS indicate that there were between 9.6 and 9.8 million illegal aliens in the survey. It must be remembered that this estimate only includes illegal aliens captured by the March CPS, not those missed by the survey. By design this estimate is consistent with those prepared by the Census Bureau, Immigration and Nationalization Service (INS), Urban Institute, and Pew Hispanic Center.16 While consistent with other research findings, it should be obvious that there is no definitive means of determining whether a respondent in the survey is an illegal alien with 100 percent certainty. We estimate that in 2000, based on the March 2000 CPS, that there were between seven and 7.2 million illegal aliens in the survey. This means about 2.5 to 2.7 million, or about half of the 5.2 million growth in the foreign born between 2000 and 2005 was due to growth in the illegal population. We also estimate that 3.6 to 3.8 million or almost half of the 7.9 million new arrivals are illegal immigrants.
Why Illegals Account for Such a Large Share of Growth. The fact that illegals account for about half of the overall growth in the immigrant population may seem surprising to some, especially since illegal aliens account for only a little over one-fourth of the total foreign-born population. There are several reasons for this. First, prior to the mid-1970s, there was little illegal immigration to the United States, thus older immigrants who entered at that time and are still here are almost all legal residents. Moreover, the United States has conducted both broad amnesties for illegal aliens in the past and each year also grants tens of thousands of illegal aliens legal status as part of the normal "legal" immigration process. For example, 2.7 million illegals were give green cards in the late 1980s and early 1990s as part of the Immigration Reform and Control Act (IRCA). Moreover, the immigration service estimated that, during just the 1990s, 1.5 million illegal aliens received green cards, not including IRCA.17 Because there is this constant movement out of illegal status to legal status, the size of the existing legal population is much bigger than the existing illegal population. Finally, it must be remembered that although the number of illegal aliens entering and remaining in the country is now enormous, the level of legal immigration is also very high, creating a very large legal immigrant population.
Immigration 1900 to 2005. While immigration has played an important role in American history, the level of immigration and the size of the immigrant population has varied considerably. Figure 2 shows the number of immigrants living in the United States over the course of the last 100 years and their share of the total population. The 35.2 million immigrants residing in the United States at the beginning of 2005 is by far the most ever recorded. Even during the great wave of immigration at the turn of the century, the immigrant population was very roughly a third what it is today.
Figure 2 shows that after growing in the early part of this century, the immigrant population stabilized at around 10 or 11 million for about four decades. In the mid‑1960s, changes in immigration law and other factors caused the annual level of legal immigration to rise steadily, from about 300,000 in the 1960s to roughly one million today. Illegal immigration has grown dramatically during this time period as well. Since 1970 the immigrant population has more than tripled. As already discussed, the number of immigrants has grown by more than five million just since 2000. The pace of growth is also very high by historic standards, averaging one million per year over the last 10 years. Growth in the 10 years between 1900 and 1910 was 3.2 million, much less than the 5.2 million in just the five years between 2000 and 2005.18
One of the interesting features of current immigration is that such a large share of immigrants stay permanently. Because so many immigrants in the early 20th century eventually returned to their home countries, the immigrant population did not grow as fast in the past as it does today.19
Immigrants as a Share of the Population. While the number of immigrants and the growth rate of the immigrant population are now much higher than in the past, Figure 2 shows that the foreign-born percentage of the population was higher in the first few decades of the 1900s, reaching 14.7 percent of the total U.S. population in 1910. As a result of World War I and changes in immigration law in the early 1920s, the level of immigration fell significantly. The current 12.1 percent of the population that is foreign-born is higher than at any time since the 1920 Census.
In terms of the impact of immigrants on the United States, both the percentage of the population made up of immigrants and the number of immigrants are clearly important. The ability to assimilate and incorporate immigrants is partly dependent on the relative sizes of the native and immigrant populations. On the other hand, absolute numbers also clearly matter -- a large number of immigrants can create the critical mass necessary to create ethnically-based media outlets and religious and civic institutions fostering linguistic, cultural, and spatial isolation. Whether the immigrants in question represent 10 percent or 30 percent of a city or state's population may not be so important; it's the raw numbers that would seem to matter most, and the numbers are approaching three times what they were in 1910. Moreover, absent a change in policy, the number of immigrants will continue to grow rapidly for the foreseeable future. If current trends continue, within about a decade the share of the population that is foreign-born will surpass the high of 14.7 percent reached in 1910.
Number of Immigrants by State. Table 1 ranks the states by the size of their immigrant populations. It also shows the number of immigrants who reported arriving in 2000 or later. California clearly has the largest immigrant population; New York, the state with next largest number of immigrants, has fewer than half as many. Table 2 also shows how concentrated the immigrant population is: Only a few states represent the majority of the foreign‑born population. The nearly 10 million immigrants in California account for 28 percent of the nation's total immigrant population, followed by New York with 11 percent, Texas with 10 percent, Florida with 9 percent, and New Jersey with 5 percent. These five states account for 63 percent of the nation's total foreign-born population, but only 35 percent of the native-born population.
(Click here on on table to see a larger version.)
The table also shows evidence that the immigrant population is becoming more dispersed. Table 1 indicates that although the top-five states account for 63 percent of the total immigrant population, only 56 percent of post-2000 arrivals went to these states.
Share of State That Is Immigrant. Table 1 also shows the share of each state's population that is foreign-born. While many states with a large number of immigrants are also states where the percentage is high, there are some differences. Because of their relatively small total populations several states with high percentages of immigrants, such as Hawaii and Nevada, rank lower in terms of number of immigrants. It is very likely that the impact of immigration will be quite significant in these states even though the size of the immigrant population is much smaller than in a state like California.
Growth in the Immigrant Population by State. Table 2 compares the number of immigrants in 1995, 2000, and 2005 for each state.20 It also shows the share of the population that was foreign-born in each of these years. As already discussed, immigrants tend to be concentrated. However, Table 2 also shows that this has become less the case over time. In 1995, the top five states accounted for 69 percent of the total foreign -born population; in 2000 these same states accounted for 66 percent of the foreign born and dropped to 63 percent by 2005. Or looked at in a different way, these five states accounted for 69 percent of the total immigrant population in 1995, but only half the growth in the immigrant population between 1995 and 2005 occurred in these five states.
(Click here on on table to see a larger version.)
Table 2 also shows different patterns for different states. For example, in New York the number of immigrants increased 585,000 between 1995 and 2000, but grew by only 57,000 in the five years after 2000. New Jersey, which is right next to New York, is quite different. The he foreign-born population grew twice as fast between 2000 and 2005 as in the five years before 2000. The same holds for Texas. Perhaps the most dramatic increases can be found in Georgia and North Carolina, where the immigrant population increased threefold between 1995 and 2005. The key point to take from Table 2 is that there is no one pattern that reflects the entire country. The pace and scale varies by state and by time period as well. Table 3 shows the states where the growth was statistically significant between 2000 and 2005.
Region and Country of Origin
Sending Regions. Table 4 shows the distribution of immigrants by region of the world, with Mexico and Canada treated separately. Mexico accounts for 31 percent of all immigrants, with 10.8 million immigrants living in United States, more than the number of immigrants from any other region of the world. Immigrants from Mexico, Central and South America, and the Caribbean account for the majority of immigrants, with 54 percent of the foreign‑born coming from these areas. East Asia also makes up a significant share of the total, accounting for 18 percent of immigrants. This is about the same as the combined total for Europe, Sub-Saharan Africa, and the Middle East. The importance of the Western Hemisphere, excluding Canada, is even more striking when we look at recent arrivals. Of those who arrived 2000 to 2005, 58 percent are from Latin America.
Top Sending Counties. Table 5 ranks the top‑25 immigrant‑sending countries by the number of immigrants as of March 2005. Mexico is, of course, the largest sending country, accounting for almost six times as many immigrants as the combined total for China, Taiwan, and Hong Kong. As is clear from Table 4, Latin America and the Caribbean countries dominate the list of immigrant‑sending countries, accounting for almost half of the top‑25 countries. One of the striking things about contemporary immigration is that there has been a significant decline in the diversity of immigrants; Mexico accounted for 31 percent of all immigrants in 2005, up from 28 percent in 2000, 22 percent in 1990, and 16 percent in 1980. The top sending country in 1970 was Italy, which accounted for only 10 percent of the foreign-born.
Labor Market Characteristics
Educational Attainment. Immigrants now comprise 14.7 percent of the nation's total workforce.21 This is somewhat higher than the 12.1 percent of the total U.S. immigrant population because, in comparison to natives, a slightly higher percentage of immigrants are of working age. Table 6 reports the educational attainment and other characteristics of immigrants and natives in the workforce. The left side of the table shows the education level of all immigrants and natives in the labor force. In 2005, about 30 percent of immigrants 18 and over in the labor force had not graduated from high school. The table also reports the education of adult immigrants who arrived 2000 to 2005. For immigrants who arrived between 2000 and 2005, 34 percent had not completed high school. In comparison, slightly less than 8 percent of natives in the workforce lacked a high school education. This difference in the educational attainment of immigrants and natives has enormous implications for the social and economic integration of immigrants into America society. There is no single better predictor of economic success than education. As we will see, the fact that so many adult immigrants lack a high school degree means their income, poverty rates, welfare use, and other measures of economic attainment lag far behind natives. The table also shows that a slightly higher share of natives have a bachelor's degree than immigrants, and the share with a post-graduate degree is almost identical for the two groups.
The large number of immigrants with low levels of education means that immigration policy has dramatically increased the supply of workers with less than a high school degree, while increasing other educational categories more moderately. The last column in Table 6 shows the portion of each educational category composed of immigrants. This is important because it is an indication of which American workers face the most job competition from foreign workers. While immigrants comprise almost 15 percent of the adult total workforce, they comprise more than 40 percent of adults in the labor force who have not completed high school. Figure 3 shows how immigration in the last 15 years has increased the supply of different types of workers. It reports the share of each educational category comprised of post-1990 immigrants. The figure shows that the number of dropouts in the workforce is 23 percent larger than it would have been otherwise; however, it has increased the supply of workers in other educational categories by between 4 and 8 percent. This means that any effect immigration may have on the wages or job opportunities of natives will disproportionately affect less‑educated workers, who are already the lowest paid workers.
Income of Immigrants and Natives. Given the large proportion of immigrants with few years of schooling, it is not surprising that the income figures reported in Table 6 show that, as a group, immigrants have lower median incomes than natives. The annual median earnings of immigrants are only about 75 percent those of natives. And for the most recent immigrants, median earning is only 56 percent that of natives. Another way to think about immigrant's relative position to natives is to look at household income. The average annual household income of immigrant-headed households is $56,289, compared to $61,098 for native households. The difference of 9 percent, while not trivial, is not huge. However, immigrant households are a good deal larger on average than native households -- 3.1 persons versus 2.5 persons. As a result, the per capita household income of immigrants is only 72 percent that of natives -- $17,884 versus $24,901.
Immigrant Progress Over Time. The income figures in Table 6 only consider those in the workforce. Poverty figures on the other hand, can be used to examine the economic position of those both in and out of the labor force. Moreover, poverty controls for the number of people in a family. Table 7 reports the share of immigrants in poverty or who have incomes that place them in or near poverty. Near poverty is defined as less than 200 percent of the poverty threshold. The 200 percent of poverty threshold is an important benchmark because under that amount people generally do not pay federal income tax and typically begin to be eligible for means-tested programs. Those with income above this amount can be seen as middle class or even upper class, while those with incomes below this amount can viewed as the low-income population. Poverty figures are reported based on how long the immigrant has lived in the country in 2005.
Table 7 shows that it takes a very long time for immigrants to close the economic gap with natives. In 2005, the table shows that the poverty rate of immigrants matches that of natives after being here for more than 20 years.22 As for the share in or near poverty, it takes more like 26 years for immigrants to match natives. Because it takes so long to match the rate of natives, at the point at which they have similar rates of poverty or near-poverty as natives, immigrants are on average much older than native-born Americans on average. This is shown in the third column of Table 7. Immigrants who arrived 20 years ago were 43 years old on average in 2005, seven years older than is the average native. Those who arrived 26 years ago are 48 years old, 12 years older than the average native. As a result, immigrants tend to have lower lifetime earnings and income than natives.
It was once argued that it took about 14 years for immigrants to close the economic gap with natives.23 Table 7 shows this is no longer the case, at least with regard to poverty and near-poverty. It is also not the case for income; we find that the median income of immigrants (18 and older) in 2005 who had lived here 14 or 15 years was only 72 percent that of natives. This despite the fact that such immigrants are overwhelmingly legal residents and are about the same age as natives. In terms of health insurance, 40 percent were uninsured compared to 13 percent of natives, and 36 percent of households headed by an immigrant who arrived 14 or 15 years ago used at least one major welfare program compared to 18 percent of natives.24
It should be noted that there is no way to know whether today's immigrants will take the same number of years to close the gap with natives, or even if they ever will. But given their education levels as shown in Table 6, it is not reasonable to expect that their rates of poverty will converge with natives any time soon. We do know that unskilled immigrants never come close to closing the gap with natives.25 Of course, we could change immigration policy and allow fewer immigrants into the country who have little formal education. If we did that, then immigrants who arrive in the future would almost certainly have incomes that match those of natives from the time they arrive in the United States or soon thereafter.
Age of Immigrants. In 2005 the average age of an immigrant was 39 years and 10 months compared to 35 years and eight months for the average native. Thus at least measured in this way, immigration does not make America much more youthful. Of course, those who argue that immigration fundamentally changes the age structure generally have in mind new arrivals. One simple way to measure the impact of immigration is to calculate the average in age in the United States with and without recent immigrants. If the 7.9 million immigrants who arrived in 2000 or later are removed from the data, the average age in the United States would be 36 years five months. Including post-2000 immigrants does lower the average age, but only to 36 years two months. Thus, over the last five years immigration had only a very small impact on the aging of American society.
It could be argued that the benefit to the age structure might take more than just five years of high immigration. In a recent reported we examined the impact of immigration on the aging of American society as well as on the Social Security system. Consistent with other research, we found that immigration has only a very small impact on the problem of an aging society now and in the future. While immigrants do tend to arrive relatively young, and have more children than natives, immigrants age just like everyone else, and the differences with natives are not large enough to fundamentally alter the nation's age structure. After looking at the impact of different levels of immigration over the next century, a Census Bureau report stated in 2000 that immigration is a "highly inefficient" means for increasing the percentage of the population that is of working age in the long-run.26 Our detailed look at the full impact of immigration on the nation's age structure is available online.27
Occupational Distribution. Table 8 shows the occupational concentration of immigrants and natives. The occupational categories are ranked based on native unemployment rates, which are shown in the first column. The table shows several important facts about U.S. immigration. First, there are millions of native-born Americans employed in occupations that have high concentrations of immigrants. It's simply not correct to say that immigrants only do jobs natives don't want. If that were so, then there should be occupations comprised almost entirely of immigrants. Just the occupational categories of farming/fishing/forestry, construction, building cleaning/maintenance, and food processing currently employ 15.3 million adult native-born Americans. The second important point to remember is that while employers often argue that there are no Americans available to fill such jobs, Table 8 shows that in the first four occupations listed there are 1.8 million unemployed natives. Moreover, native unemployment averages 10.8 percent in these occupations. Perhaps the labor is not where employers wanted, or there is some other reason businesses find these unemployed natives unacceptable, but on its face Table 8 indicates that there is quite a lot of unutilized labor of this kind in the United States.
Its also worth considering that the correlation between native unemployment rates and the share of an occupation that is immigrants is 0.86. The square of a correlation, in this case 0.74, can be interpreted to mean that the presence of immigrants in an occupation explains 74 percent of the variation in native unemployment rates across occupations. It's also worth pointing out that the correlation between the number of unemployed natives and the number of post-2000 immigrants employed in a occupation is 0.98, and this value squared is 0.96. Of course, correlations do not prove that immigration adversely impacts the employment prospects of natives. It would be a mistake to think that every job taken by an immigrant is a job lost by a native. Clearly many factors impact unemployment rates across occupations. But it would also be a mistake to assume that dramatically increasing the number of workers in these occupations as a result of immigration policy has no impact on the employment prospects of natives. Perhaps most important, the large number of unemployed natives calls into question the argument that America is desperately short of workers to do these less-skilled jobs.
Self Employment. Table 9 examines the self‑employment rates of immigrants and natives. The table shows that immigrants and natives exhibit remarkably similar levels of entrepreneurship. The table shows that about 11 percent of immigrants and 13 percent of natives are self‑employed. Turning to self‑employment income reported at the bottom of Table 9, we see that the average self‑employment income (revenue minus expenses) for immigrants and natives is virtually identical. While immigrants overall are not more entrepreneurial than natives, immigrants from such countries as Korea, Russia, and Iran are significantly more likely than natives to be self‑employed. But overall entrepreneurship is neither lacking nor a distinguishing characteristic of the nation's immigrants. If one removed immigrants from the data, the overall rate of self‑employment in the United States would be about same. Therefore, one must look elsewhere to make an argument for or against current immigration.
Poverty, Welfare, and the Uninsured
Poverty Among Immigrants and Natives. The first two columns in Table 10 report the poverty rate for immigrants by country and the number (in thousands) in poverty. Based on the March 2005 CPS, 17.1 percent of immigrants compared to 12 percent of natives lived in poverty in 2004 (Poverty statistics are based on annual income in the calendar year prior to the survey and reflect family size). The data by country indicate that there is an enormous variation in poverty rates among immigrants from different countries. For example, the 26 percent poverty rate for Mexicans is more than five times that of persons from Canada or the Philippines.
The higher incidence of poverty among immigrants as a group has significantly increased the overall size of the population living in poverty. Immigrants accounted for about one in six persons living in poverty. While this is a large percentage, it would be even larger if the native‑born children (under age 18) of immigrants, who are included in the poverty figures for natives, are counted with their parents. The poverty rate of minor children reflects their parents' income, therefore it is reasonable to view poverty among the U.S.‑born children of immigrants as attributable to their immigrant parents.28 The bottom portion of Table 10 shows that the poverty rate for immigrants and the U.S.‑born children of immigrant mothers together is 18.4 percent. If the native‑born children of immigrants are excluded, poverty among natives drops from 12 percent to 11.7 percent.
Of the 31 million natives living in poverty, 2.5 million (8 percent) are the U.S.‑born children (under 18) of immigrant mothers. Overall, if the six million immigrants in poverty are also excluded, along with their U.S.‑born children, the total number of people living in poverty drops by 8.5 million. This means that immigrants and their U.S.‑born children account for 23 percent of the nearly 37 million people living in poverty in the United States. Among persons under age 18 living in poverty, 27 percent are either immigrants or the child of an immigrant mother.
In or Near Poverty. In addition to poverty, Table 10 also reports the percentage of immigrants and natives living in or near poverty, with near-poverty defined as income less than 200 percent of the poverty threshold. As already discussed, those with incomes under 200 percent of poverty generally do not pay federal income tax and often qualify for means-tested programs. As is the case with poverty, near-poverty is much more common among immigrants than natives. Table 10 shows that 42.5 percent of immigrants compared to 29.7 percent of natives live in or near poverty. Among the children of immigrants (under 18), 53.9 percent live in or near poverty, in contrast to 35.6 percent of the children of natives. If the U.S.‑born children of immigrants are excluded from the figures for natives, the rate of poverty/near poverty among natives drops from 29.7 percent to 28.7 percent. If these children are counted with their immigrant parents, the rate of poverty/near poverty for immigrants and their children is 44.9 percent. The 20.8 million immigrants and their U.S.‑born children in or near poverty account for 23 percent of all persons in or near poverty.
Without Health Insurance. Table 11 reports the percentage of immigrants and natives who were uninsured for all of 2004. (The CPS asks about health insurance in the calendar year prior to the survey) The table shows that lack of health insurance is a significant problem for immigrants from many different countries. Overall, 33.7 percent of the foreign-born lack insurance compared to 13.3 percent of natives. Immigrants now account for 26 percent of the uninsured. The lower portion of Table 11 reports the percentage and number of immigrants and the U.S.‑born children (under 18) of immigrant mothers who are uninsured. In 2005, 29.3 percent of immigrants and their minor children were uninsured. In total, the 13.6 million uninsured immigrants and their children account for 30 percent of the uninsured, nearly double their 15.9 percent of the overall population.29
The low rate of insurance coverage associated with immigrants is primarily explained by their much lower levels of education. Because of the limited value of their labor in an economy that increasingly demands educated workers, many immigrants hold jobs that do not offer health insurance, and their low incomes make it very difficult for them to purchase insurance on their own. A larger uninsured population cannot help but strain the resources of those who provide services to the uninsured already here. Moreover, Americans with insurance have to pay higher premiums as health care providers pass along some of the costs of treating the uninsured to paying costumers. Taxpayers also are affected as federal, state, and local governments struggle to provide care to the growing ranks of the uninsured. There can be no doubt that by dramatically increasing the size of the uninsured population, our immigration policy has wide‑ranging effects on the nation's entire health care system.
A recent study found that, after controlling for such factors as education, age, and race, uninsured immigrants impose somewhat lower costs than uninsured natives. However, when the authors simply compared uninsured immigrants to uninsured natives the cost differences were not statistically significant. In other words when using the actual traits that immigrants have, the costs that uninsured immigrants create were the same as uninsured natives.30 Of course, even if there was a difference in the costs uninsured immigrants create compared to uninsured natives, it would have to be enormous to offset the fact that immigrants are two-and one-half times more likely to be uninsured than native-born Americans.
Immigration Accounts for Most of Increase in the Uninsured. According to the Census Bureau, since 1989 the population without health insurance has grown by 12.44 million and stood at 45.82 million in 2004. Much of this growth has been driven by immigration. To understand the impact of immigration, we can remove from the CPS immigrants who arrived after 1989 and who are uninsured. According to the March 2005 CPS, there were 8.34 million immigrants who arrived in 1990 or later who did not have health insurance. This is equal to 67 percent of the growth in the uninsured population. Moreover, there were nearly 700,000 children born to post-1990 immigrants who lacked insurance, meaning that new immigrants and their U.S.-born children accounted for 73 percent of the growth in the uninsured population. Thus, it is reasonable to say that the nation's health insurance crisis is, to a large extent, being driven by its immigration policy.
Uninsured or on Medicaid. The large share of immigrants and their children who are uninsured is even more striking when one considers their high rate of Medicaid use. The 2005 CPS shows that 17.4 percent of immigrants and their U.S.-born children under 18 are on Medicaid, compared to 12 percent of natives and their children.31 The last two rows at the bottom of Table 11 report the combined share of immigrants and their U.S.-born children who are either uninsured or on Medicaid. Nearly 47 percent of immigrants and their children either have no insurance or have it provided to them through Medicaid.
Welfare Use. As the Census Bureau does in its publications, we report welfare use based on whether the head of household is immigrant or native.32 With regard to immigrant households, this means we are reporting welfare use for immigrants and their U.S.-born children who live with them and comparing them to natives and their children. Table 12 shows the percentage of immigrant‑ and native‑headed households in which at least one member of the household receives public assistance (including Temporary Assistance to Needy Families and state administered general assistance programs); Supplemental Security Income (SSI), which is for low-income elderly and disabled persons; Food Stamps; Medicaid (health insurance for those with low incomes); live in subsidized or government-owned housing, or use the Women, Infants and Children (WIC) nutrition
Table 12 indicates that even after the 1996 welfare reforms, which curtailed eligibility for some immigrants, immigrant households' use of the welfare system remains higher than that of natives for most programs and most entering cohorts. Use of public assistance and SSI tend to be quite similar for immigrant and native households. Thus if by "welfare" one only means cash assistance programs, then immigrant use is roughly the same as natives. Of course, there is the question of whether native use of welfare is the proper yardstick by which to measure immigrants. Some may reasonably argue that because immigration is supposed to benefit the United States, our admission criteria should, with the exception of refugees, select only those immigrants who are self‑sufficient. Yet Table 12 shows that welfare use, even of cash programs, is not at or near zero. For other programs such as food stamps and housing, immigrant use tends to be somewhat higher. The biggest differences are for Medicaid and WIC. From the point of view of taxpayers, immigrant use of Medicaid is the most problematic because that program costs more than the combined total for the other five programs.
As was the case with lower income and higher poverty rates, the higher welfare-use rates by immigrant households are at least partly explained by the large proportion of immigrants with few years of schooling. Less‑educated people tend to have lower incomes and higher levels of unemployment and poverty. Therefore, it is not surprising that immigrant use of the welfare system is significantly higher than that of natives.
While immigrants' use of some welfare programs is higher than natives', Table 12 shows that most households, immigrant or native, do not use the welfare system. On the other hand, even though most households do not use the welfare system, the programs listed in Table 12 cost the government some $500 billion annually. Moreover, there are other means-tested programs not listed in the table that are linked to those reported in Table 12. For example, 15 percent of immigrant households reported having at least one child receiving subsidized school lunches, compared to only 6 percent of native households. There are many possible reasons to support high levels of immigration. But if the benefit to the United States is one of them, then selecting only immigrants who can support themselves and their children and do not need government assistance would certainly make sense.
Use of EITC. In addition to welfare programs, Table 12 reports the share of households in which at least one worker is eligible for the Earned Income Tax Credit (EITC).33 The Credit is for low-income workers. Persons receiving the EITC pay no federal income tax and instead receive cash assistance from the government based on their earnings and family size. The figures for the EITC probably overstate receipt of the EITC for both immigrants and natives because they are imputed (by the Census Bureau) based on income and family size. All persons who file a return should receive the EITC -- the IRS will process it automatically for you if you qualify. Even illegal aliens sometime receive it. With an annual cost of over $30 billion, the EITC is the nation's largest means‑tested cash assistance program for workers with low incomes. Table 12 shows that 15.8 percent of native-headed households qualify for the credit, compared to 30 percent of immigrant households. Again, given the education level of so many immigrants it is not surprising that a large share work but that their incomes are low enough to qualify for the EITC.
Welfare Use by Country. While on the whole immigrant households have higher welfare use rates, this is not true for immigrants from all countries. Table 13 shows that immigrants from some countries have lower welfare use rates than natives. From the list of countries in Table 13, it is also clear that refugee‑sending countries, such as Russia and Vietnam, tend to use the welfare system a good deal. On the other hand, Mexican and Dominican households have welfare use rates that are much higher than natives -- higher even than Russia or Vietnam -- and virtually none of these immigrants are refugees. In fact, if one excludes the primary refugee-sending countries, the share of immigrant households receiving welfare does drop, but as reported at the bottom of Table 13, only from 28.6 percent to 28.2 percent.34 Refugees are simply not a large enough share of the foreign-born, nor are their rates high enough to explain the level of welfare use by immigrant households.
Education Level of Immigrants. The statistics reviewed thus far indicate that a larger share of immigrants than natives have low incomes, lack health insurance, and access means-tested programs. As already mentioned, one of the primary reasons for this situation is that many immigrants have relatively few years of schooling. Table 14 reports, by country, the share of immigrants who have less than a high school education and the share who have at least a bachelor's degree. (The overall figures do not exactly match those in Table 6 because in that table the percentages are for only those in the labor force) The big difference between the education level of the two groups is found at the bottom end of the education distribution. In 2005, 31 percent of immigrants age 25 to 64 lacked a high school diploma, compared to less than 9 percent of natives.
At the top end, natives now have a slight advantage in terms of having at least a bachelor's degree. Historically, immigrants enjoyed a significant advantage in terms of having a college education. In 1970 for example, 18 percent of immigrants (25 to 64) had at least a college degree compared to 12 percent of natives.35 But as Table 14 shows this is no longer the case, with 28 percent of immigrants and 30 percent of natives having at least a college degree. Because education is now so important to economic success, the large share of immigrants with relatively little education has enormous implications for their economic and social integration into American Society. Table 14 shows that there is great variation in the education level of immigrants by country. As we have seen, there is also great variation in the poverty, welfare use, and health insurance coverage rates by country. In general, countries with the lowest levels of education are also the ones with highest rates of poverty, welfare use, and lack of health insurance.
Importance of Education. To see just how important education is to economic success, Table 15 reports income, welfare use, poverty, and health insurance rates for immigrants and natives by education level. Table 15 shows that the median annual income of immigrants without a high school degree is just $15,600, very similar to the $15,000 for natives. For those with only a high school degree it is only $20,000 -- again, not that different from the $24,000 for natives. Table 15 also shows that for welfare use, poverty, and health insurance rates, immigrants tend to do somewhat worse than natives with the same education. But more important, the table also shows that how well immigrants do is heavily dependent on their education level. This is consistent both with common sense and very large body of research.
The current immigration system allows legal immigrants into the country primarily based on whether they have a relative here. This fact, coupled with widespread toleration of illegal immigration, means the foreign-born population as a whole is much less educated than the native-born population. Given the nature of the modern American economy and the existence of a well-developed welfare state, it seems unavoidable that less-educated immigrants will tend to have lower incomes and make heavier use of means-tested programs than natives.
In the last few years, a good deal of attention has been focused on the dramatic increase in enrollment experienced by many school districts across the country. All observers agree that this growth has strained the resources of many school districts. While it has been suggested that this increase is the result of the children of baby boomers reaching school age, the so called "baby boom echo," it is clear from the CPS that it is immigration policy that accounts for the dramatic increase in school enrollment. Table 16 shows that there are 10.3 million school‑age children of immigrants (ages 5 to 17) in the United States, accounting for 19.2 percent of the total school-age population. While fewer than one‑third of these children are immigrants themselves, the use of public education by the U.S.-born children of immigrants is a direct consequence of their parents' having been allowed into the country. The children of immigrants account for such a large percentage of the school‑age population because a higher proportion of immigrant women are in their childbearing years, and immigrants tend to have somewhat larger families than natives. In addition, the effect of immigration on public schools will be even larger in the coming years because 21 percent of children approaching school age have immigrant mothers.
Table 16 also shows that immigration has significantly increased the school‑age population in all of the top immigrant‑receiving states. Of course, a dramatic increase in enrollment may not create a problem for public education if tax revenue increases proportionately. But as we have seen, immigrants generally have lower incomes than natives, so their tax contributions are unlikely to entirely offset the costs they impose on schools. This is especially true because of the higher costs associated with teaching children whose first language is not English.
The absorption capacity of American public education is clearly an important issue that needs to be taken into account when formulating a sensible immigration policy. Table 16 suggests that the failure to consider this question may have significant consequences for America's schools.
Characteristics by State
In this section we examine the demographic characteristics of immigrants by state. Since the state samples are much smaller than for the nation as the whole, the results should be interpreted with caution, especially for the smaller states.
Educational Attainment by State. Table 17 reports the education level and poverty rates for immigrants. After the first column, which reports the share of immigrants 18 and over who are citizens, the second two columns report the percentage of adult immigrants and natives who lack a high school degree. The table shows that in every state of the country the share of adult immigrants without a high school education is significantly higher than that of natives. The largest gap is found in western states such as California, Arizona, and Colorado, where four to eight times as many immigrants as natives are high school dropouts. This huge gap has enormous implications for the social and economic integration of immigrants because there is no single better predictor of one's economic and social status in modern America than education.
(Click here or on table to see a larger version.)
Poverty and Near-Poverty by State. The two columns after educational attainment in Table 17 report the percentage and number of immigrants and their U.S.‑born children (under age 18) who live in poverty compared to natives and their children. While the foreign-born tend to have higher poverty rates in the top-receiving states, in Massachusetts, Illinois, Virginia, Maryland, and Georgia the difference with natives is not that large. In contrast, immigrants and their children tend to have much higher rates of poverty in New Jersey, North Carolina, Texas, Colorado, Arizona, and California. Turning to the share in or near poverty we see a somewhat different pattern. (Near poverty is defined as having an income below 200 percent of the poverty threshold.) With the exception of Virginia, immigrants and their children have much higher rates of poverty/near poverty than natives in every major immigrant state. As already discussed, those with incomes below this amount usually do not pay federal income taxes and typically become eligible for means-tested programs. As a share of all persons in or near poverty, immigrants and their children account for more than one‑half of the poor and near poor in California and roughly one‑third in New York, New Jersey, Florida, Texas, and Arizona.
Welfare Use by State. Table 18 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, public/rent subsidized housing, WIC, and Medicaid.) Nationally, 28.6 percent of immigrant households use a welfare program compared to 18.2 percent of natives. As we saw in Table 12, the biggest difference in program use is for Medicaid and WIC. For state governments, Medicaid is a particular concern because half to two-thirds of the program's costs are borne by state taxpayers. The biggest difference in welfare use is found in California, Georgia, Florida, Texas, Arizona, Massachusetts, New York, and Maryland. As a result of their higher use rates, immigrant households account for a very significant percentage of those using the welfare system. In California, almost half of households using a welfare program are headed by immigrants, and in New York, Florida, Texas, New Jersey, and Arizona immigrant households account for between a quarter to a third of households using the welfare system. Use of welfare programs by immigrants does raise the question of why we have an immigration policy that admits so many individuals who are not self-sufficient.
(Click here or on table to see a larger version.)
Health Insurance Coverage. In addition to welfare use, Table 18 shows the share of immigrants and their children without health insurance by state. In the nation as a whole, 29.3 percent of immigrants and their children (under 18) are uninsured -- compared to 13.2 percent of natives and their children. The difference between immigrant and native insurance coverage rates can only be described as enormous in many states. In Maryland, North Carolina, Colorado, and Arizona, the rate of uninsurance among immigrants and their children is triple that of natives. In New Jersey, Illinois, Georgia, Florida, Texas, and California the rate is double.
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 on Medicaid. The last column in Table 18 shows the share either uninsured or enrolled in Medicaid. The 2005 CPS shows that 17.4 percent of immigrants and their children are on Medicaid, compared to 12 percent of natives and their children. When we combine the percentages without health insurance we find that, in the nation as a whole, 46.7 percent of immigrants and their children (under 18) are either uninsured or enrolled in Medicaid, compared to 25.2 percent of natives. In North Carolina, Georgia, Florida, Colorado, and California roughly half or more of immigrants and their children are uninsured or on Medicaid. In Texas and Arizona it is over 60 percent. The impact of immigration on the health care system in these states and the nation is clearly enormous.
Immigration's Impact on the Size of the Low-income Population. Figure 4 shows the percentage of the each state's total population comprised of immigrants and the U.S.-born children under 18 of immigrant mothers compared to their share of those in or near poverty or uninsured. As a share of all persons in or near poverty, immigrants and their children account for more than half of the poor and near-poor in California, and roughly one‑third in New York, New Jersey, Florida, Texas, and Arizona. The impact of immigration on the overall size of the uninsured population is even larger. In California, immigrants and their U.S.-born children under 18 are 55.6 percent of the uninsured, and they are almost half of the uninsured in Arizona and New Jersey. They also represent a third or more of the uninsured in New York, New Jersey, Florida, Texas, Colorado, and Maryland.
Unfortunately the Commerce Department, of which the Census Bureau is a part, changed how it defines metropolitan areas for the 2005 CPS. The reasons and extent of the changes need not concern us here. But they do mean that it is no longer possible to easily compare the largest metro areas, formally called Consolidated Metropolitan Statistical Areas (CMSAs), over time using the CPS. Starting in 2005, these large metro areas are called Consolidated Statistical Areas (CSAs) and are not directly comparable to CMSAs. Looking at metropolitan areas using the CPS has now become much more difficult. Table 19 attempts to make comparisons with just a few of the very largest CSAs. (Note Miami is not a CSA.) The table shows that the New York and Los Angles CSAs have the largest foreign-born population, while Miami has the largest foreign-born share. The results in Table 19 should be interpreted with caution. The March CPS data is new, and Census Bureau documentation dealing with metro area definitions is not entirely clear.
Illegal Population Overall. So far we have examined the size, growth, and characteristics of the nation's total foreign-born population. As discussed in the methods section of this report, the foreign-born population in the CPS includes both legal and illegal immigrants. We estimate that of the 35.2 million immigrants in the March 2005 CPS, between 9.6 and 9.8 million are illegals. This estimate is not significantly different from those of other researchers who have examined this question.36 It must also be remembered that these figures are only for those in the CPS, not those missed by the survey. Our estimates indicate that illegal aliens comprise 3.3 percent of the nation's total population and 28 percent of the total immigrant population. 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 the illegal population is not counted in the CPS. Thus, if one wants to know the "true" size of the illegal population, then 10 percent -- or about one million illegals -- should be added to our estimate of the number captured in the CPS for a total of nearly 11 million in March 2005.
One of the most important characteristics of illegal immigrants is the very large share with little formal education. We estimated that of adult illegals over age 21, 61 percent have not completed high school, 25 percent have only a high school degree, and only 14 percent have education beyond high school. As already discussed, this is critically important because education is so important to socio-economic status in the modern American economy.
Illegals by State. Below we examine the demographic characteristics of illegal aliens by state. Since the samples are much smaller than for the nation as the whole, the results should be interpreted with caution, especially for the smaller states. In addition to issues associated with sample size, the identification of illegals in the survey also contains some error. Table 20 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, this may not be uniform across states.) The table shows that California has by far the largest illegal population, followed by Texas, Florida, and New York. However, with the exception of Texas, these states do not rank at the top in terms of the illegal share of the total foreign-born. In Arizona, Colorado, and North Carolina illegals account for half or nearly half of the foreign-born.
Poverty Among Illegals by State. One advantage of not adjusting for undercount is that it is possible to see what share of those in poverty or uninsured are illegals in the CPS. If we had adjusted upward for illegals missed in the CPS, then we would have also had to adjust for the undercount of legal immigrants and natives so that we could calculate the share that illegals represent. Table 21 reports the estimated share of illegals who live in or near poverty, with near-poverty defined as less than 200 percent of the poverty threshold. Not surprisingly, Table 21 (page 26) shows that illegals tend to have very high rates of poverty and near poverty. Recall from Table 10 that roughly one in nine natives lives in poverty compared to one in four illegal aliens in poverty. Nationally, about 6.2 percent of those in poverty are illegal aliens, or about double their 3.3 percent share of the total population.
Table 21 also shows poverty for illegals by state. Poverty among illegals is the highest in states like Texas and Colorado. The table also shows that poverty among illegals tends to be even higher when their U.S.-born children under age 18 are counted.37 Nationally, more than 26 percent of illegals and their American-born children live in poverty, accounting for 9 percent of the total poverty population in the United States. In states such as California, Arizona, Texas, New Jersey, and Colorado, illegals and their U.S.-born children accounted for about a fifth of those in poverty. In Virginia, Florida, and North Carolina, illegals are about one-tenth of those in poverty, as is the case for the nation as a whole. If we compare Table 21 with figures from Table 16, which reported the share of all immigrants and their children in poverty, we find that in just about every state, the majority of immigrants and their children in poverty are not illegal aliens or the young children of an illegal born here. Even in a state with a huge illegal population like California, only about one-third of the poverty associated with immigrants is from illegal immigration.
The same general pattern holds when we consider those in or near poverty, which is shown on the right side of Table 21. Rates for illegals tend to be dramatically higher than those of natives. In just about every state, the majority of illegals and their minor children live in or near poverty. And illegal immigrants account for a large share of the overall low-income population. However, as is the case with poverty, most immigrants and their children in or near poverty are not illegal aliens or the minor child of an illegal alien.
Welfare Among Illegals by State. Table 22 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 and WIC) and Medicaid. But use of cash assistance (TANF, State General Assistance, and SSI) is in most cases is very low. It should also be added that the share of households headed by illegals in public or rent-subsidized housing is virtually zero. 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 22 reflects the fact that a very large share of illegals have low incomes and, as a result, their children can enroll in means-tested programs. This is important for a number of reasons, not the least of which because it means that efforts to bar illegals from using welfare programs will be ineffective. Their U.S.-citizen children will continue to enjoy the same welfare eligibility as any other American citizen. Or put a different way, as long as illegals are allowed to stay in the country, their children will continue to access the welfare system at very high rates, at least for some programs.
It should also be noted that this situation is not caused by an unwillingness to work on the part of illegals. In fact, we have estimated that a larger share of illegal alien headed households have at least one worker than do native headed households.38 Rather, with 60 percent or more of adult illegals lacking even a high school degree, their average incomes in the modern economy will be very low. Moreover, 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 income, and have children, most of whom were born here, it should be no surprise that many illegal households use the welfare system. Use of means-tested programs by illegal workers is important because it indicates that employers' desire to have access to large numbers of unskilled immigrant workers may come at a very significant costs to 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 adds so many unskilled workers to the country.
Health Insurance Among Illegals by State. The right-hand portion of Table 22 reports the share of illegals and their minor children without health insurance coverage. Not surprisingly, most illegals are uninsured. Nationally we estimate that 65 percent of illegals lack health insurance, compared to about 13 percent of natives. Table 22 also shows that in many states the figure is even higher. Illegals also account for a very large share of the total uninsured population. Nationally 14 percent of all uninsured persons in the United States are estimated to be illegal aliens. This compares to their 3.3 percent share of the nation's total population. In some states the impact is much larger. In Arizona, about one-third of the uninsured are illegal aliens, in California it is one-fourth and in Colorado they are one-fifth of the uninsured.
Table 22 indicates that, when their U.S.-born children (under 18) are included, the illegal share of the uninsured is lower than when illegals are considered alone. This is in contrast to the poverty figures reported above, which showed that poverty is higher when the U.S.-born minor children of illegals are included. Nationally, 56 percent of illegals and their minor children are uninsured. In general, lack of health insurance among the U.S.-born children of illegals is much lower than for their parents because, unlike their parents, the U.S.-born children of illegals can enroll in Medicaid. Most of the children in illegal-alien families are U.S.-born, and this is the main reason that the figures for Medicaid use for illegals are high -- their American-citizen children use the program. As a share of the total uninsured population, illegals and their children account for 15 percent of the all the uninsured in the United States. In Arizona, 37 pecent of the uninsured are illegals or their U.S.-born children under age 18; in California, it's 27 percent; in Colorado, it's 24 percent; in Texas and New Jersey, it's 21 percent; in North Carolina it's 17 percent; and in the rest of the states it's between 13 and 16 percent. The large number of illegals without insurance, and the likely impact this creates for taxpayers, again reminds us that the desire of some businesses to have access to large numbers of unskilled immigrant workers may create significant problems for the health care system and taxpayers.
Characteristics of Unskilled Legal Immigrants. Illegal immigration is one of the most contentious issues of our time. Many in Congress, as well as the president, have argued for some form of legal status for those here illegally as well as increased levels of legal immigration. Since illegal immigrants are overwhelmingly unskilled, we can gain some insight into the possible effects of legalization by looking at the economic situation of unskilled legal immigrants. Figure 5 reports the estimated welfare use and poverty rates of legal immigrants who have not completed high school. It should be noted that if we have overestimated welfare use for households headed by illegal aliens, then legal immigrants, particular the unskilled, must have higher welfare use rates than reported here. This would mean that legalization would be even more costly because the difference between what illegals currently use and what they would use once legalized is even larger than we have estimated here. This has to be the case mathematically because immigrant households accessing the welfare system can only be either legal immigrants or illegals and we simply take the welfare use rates for the foreign-born as reported in the CPS.
Figure 5 shows that unskilled legal immigrants make extensive use of the welfare system. In fact, our estimate is that nearly half (48 percent) of households headed by unskilled legal immigrants use at least one major welfare program. Their use of welfare programs is much higher than that of illegal aliens for every type of program. In contrast to welfare use, the poverty statistics show that unskilled legal immigrants are somewhat better off than illegal aliens. But the difference in poverty rates is not that large -- 22 versus 24 percent. The share of unskilled legal immigrants in or near poverty is somewhat lower than that of illegals. But unskilled legal immigrants are still almost twice as likely as natives to live in or near poverty.
Figure 5 indicates that legalization will probably not solve the problems of welfare use or low income associated with illegal immigration. In fact, with regard to welfare use, legalization will almost certainly make the problem worse. Of course, not all illegal aliens are unskilled. Those with more education can be expected to do better than unskilled legal immigrants. On the other hand, legal unskilled immigrants in the CPS have lived in the United States significantly longer than have the average illegal immigrant, the majority of whom have lived here for less than 10 years. Over time, income rises with greater workforce experience. The estimates for unskilled legal immigrants reflect this fact. Thus, unskilled legal immigrants in the CPS have higher incomes than would be expected for legalized illegal aliens at least at the onset of any amnesty.
Legal Status No Guarantee of Success. Figure 5 makes clear that immigrants who have legal status, but little education, generally have low incomes and make heavy use of welfare programs. If we decide to legalize illegal immigrants, we should at least understand that it will not result in dramatically lower rates of welfare use or poverty. This does not mean legalization is necessarily a bad idea. But it does mean that those who advocate such a policy need to acknowledge this problem and not argue that legalization will save taxpayers money or result in a vast improvement in the income of illegal aliens. Legalized illegals will still be overwhelmingly uneducated and this fact has enormous implications for their income and welfare use and for American taxpayers.
The latest data collected by the Census Bureau show that the years 2000 to 2005 are the almost certainly the highest five years of immigration in American history. Immigration continues to be the subject of intense national debate. The 1.5 million immigrants arriving each year have a very significant effect on many areas of American life. Immigrants and their young children (under 18) now account for one-fifth of school age population, one-fourth of those in poverty, and nearly one-third of those without health insurance, creating enormous challenges for the nation's schools, health care system, and physical infrastructure. The low educational attainment of many immigrants, 31 percent of whom have not completed high school, is the primary reason so many live in poverty, use welfare programs, or lack health insurance, not their legal status or an unwillingness to work.
Setting aside the lower socio‑economic status of immigrants, no nation has ever attempted to incorporate more than 35 million newcomers into its society. Whatever one thinks of contemporary immigration, it is critically important to understand that its effect on America represents a choice. Selection criteria can be altered, as can the total number of people allowed into the country legally. Moreover, the level of resources devoted to reducing illegal immigration can be reduced or increased. With illegal immigrants accounting for more than one in four immigrants, their effect on the nation by themselves is now very large.
The goal of this Backgrounder has been to provide information about the impact of immigration on American society to better inform the policy discussion about what kind of immigration policy should be adopted in the future. If there is no change in immigration policy, it is almost certain that over the next 10 years, at least 15 to 16 million new legal and illegal immigrants will settle in the United States. Thus immigration's impact will continue to grow if current trends are allowed to continue.
Click HERE to read the Endnotes to this study.