Welfare Reform and Immigrant Participation in the Supplemental Security Income Program

We examine the effect of the 1996 welfare reform legislation on participation in the Supplemental Security Income (SSI) program by immigrants. Although none of the immigrants on the SSI rolls before welfare reform lost eligibility, the potential exists for future impacts on the SSI caseload and the well-being of recent immigrants. We use microdata files from the Social Security Administration’s Continuous Work History Sample matched to administrative data on SSI participation for the period 1993 to 1999. We estimate simple models of SSI participation and compare our results to the existing literature. We then estimate a series of difference-in-differences models of SSI participation. These models compare SSI participation by immigrants relative to nativeborn individuals, and among affected immigrants relative to unaffected immigrants and native-born individuals, before and after welfare reform. Descriptive results indicate that the percentage of immigrants and natives receiving SSI decreased after welfare reform, but by a larger percentage for natives than for immigrants. The probability of SSI participation decreased after welfare reform for immigrants who were affected by the legislation relative to immigrants who were unaffected. The difference-in-differences estimate is positive for immigrants relative to otherwise similar natives, but the estimated effect among affected immigrants is about half as large as the effect for unaffected immigrants. When the sample is limited to low earners as a proxy for the SSI means test, the results are qualitatively unchanged but quantitatively much stronger. Authors’ Acknowledgements We are grateful to Ulyses Balderas for assisting with the collection of some data used here. A previous version of this paper was presented at the 2004 Western Regional Science Association Annual Meeting, February 25-28, 2004, Maui, HI.