Association for Public Policy Analysis & Management

We study welfare receipt among immigrants and natives over a 24-year period from 1994-2017. Two diverse trends emerge. Immigrant receipt of cash and near cash programs fell substantially below those of natives after the 1996 welfare reform and remained so for the next two decades across periods of economic recessions and recoveries. A broader definition of safety net programs that includes health insurance coverage as well as receipt of cash and near cash programs depicts a divergent trend since mid-2000s with immigrants’ receipt of safety net programs rising above those of natives, at a slow pace before the Great Recession and much faster with ACA and SCHIP reauthorization.

We use an Oaxaca-Blinder decomposition analysis to investigate these trends. Estimates suggest that immigrant receipt of cash and near-cash programs would be 6.5 percentage points lower than those of natives if the two groups had the same endowments; it would be 4.8 points higher if the two groups had same coefficients (response to endowments). Immigrant participation in safety-net programs (including health insurance) would be 10 percentage points higher than those of natives on account of differences in endowments and statistically the same on account of differences in response to endowments. Further analysis showed that the difference in welfare use gap on account of endowments is largely driven by differences in demographic and labor market characteristics of the two groups, and the differences in coefficients is largely driven by variation in state welfare generosity (policy) towards immigrants. Differences in immigrant and native settlement patterns, business cycle, local immigration enforcement policies and other policies specific to immigrants have modest roles “explaining” the gap in welfare receipt of the two groups.