Who Is A Public Charge?

According to the Washington Post, the Trump administration is considering a number of changes in current immigration policy, focusing more on the economic side of things this time around. That WP article is already cluttered with half-truths (spouted by the usual suspects at Cato and the like), so I thought it’d be a good idea to clarify the muddied waters regarding one particular proposal that is being considered to reduce welfare use in the immigrant population.

Since 1882, the United States has banned the entry of anyone who has the potential of becoming a “public charge.” This is how current law reads:

Any alien who, in the opinion of the consular officer at the time of application for a visa, or in the opinion of the Attorney General at the time of application for admission or adjustment of status, is likely at any time to become a public charge is inadmissible.

Since 1903, the United States has allowed for the deportation of immigrants who became a public charge after they entered the country, and this is how the law now reads:

Any alien who, within five years after the date of entry, has become a public charge from causes not affirmatively shown to have arisen since entry is deportable.

Given these very straightforward–and very old–restrictions, it seems puzzling that we would find many immigrants on welfare. But, as always, the devil is in the details. The law is often not enforced, and the common-sense definition of a public charge that we carry in our heads has little to do with how the immigration regulators have defined it. This is how that definition now reads:

For purposes of determining inadmissibility, “public charge” means an individual who is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at government expense.

Note the big elephant in the room. Immigrants who receive non-cash benefits–including the most expensive benefit of all, Medicaid–are not considered to be public charges. In the words of DHS: “Non-cash benefits (other than institutionalization for long-term care) are generally not taken into account for purposes of a public charge determination.”

If we began to actually enforce the law with a common-sense interpretation of the century-old statutes, the policy shift will affect an awful lot of people. I took data from the March Current Population Surveys (CPS) from 1994 through 2016 to calculate the fraction of immigrant-headed households who receive some type of assistance (either cash, food stamps, or Medicaid). I then divided the foreign-born households into 2 categories–those where the household head is naturalized, and those where the household head is not. Any proposed shift in policy would affect the non-naturalized households. And this is what the trend in the fraction of households receiving assistance looks like:

welfare-use-non-citizens

In 2016, there were 8.9 million households headed by a non-citizen. Almost 42 percent of those households received some type of assistance. Put bluntly, taking the public charge provisions of immigration law seriously could potentially affect 3.7 million households, making the recent kerfuffle over a relatively small number of refugees look like small potatoes.

The policy challenge is obvious, and the economic and social ramifications will be dramatic. Before we start envisioning deportations by the hundreds of thousands, however, let’s remember that we all respond to incentives. Few economists would be surprised if some of the affected households begin to find other ways of providing for their needs.

Some additional information:

  1. No need to take my word for the graph. The trends are very easy to reproduce by anyone who is willing to spend a little time looking at the publicly available CPS data. Here is the program, the data can be downloaded here; and click here if you are really geeky and want to see the computer output and detailed statistics.
  2. The recent immigration report of the National Academy of Sciences (NAS) has similar statistics on the number of immigrant households on welfare. Table 3-15 shows the fraction of households with children receiving some type of assistance (here’s a screenshot of the table). According to the NAS, 41.8 percent of native households and 55.8 percent of immigrant households receive assistance (but they do not break up the immigrant households according to citizenship status).
  3. The NAS report also calculated the size of the fiscal burden implied by these numbers; that discussion is in Chapters 8 and 9 of the report. See here and here for a User’s Guide to the NAS fiscal impact discussion.
  4. The CPS data are notorious for understating the extent of welfare participation in the population. The Survey of Income and Program Participation (SIPP) is supposed to provide much better measures of welfare use, but it is a much harder data set to manipulate. As I note in We Wanted Workers (Table 9.1), the welfare participation rate of immigrant households implied by the SIPP is far higher than what the CPS suggests (at least 10 percentage points higher).

We Wanted Workers On EconTalk

Russ Roberts and I talked about immigration and We Wanted Workers for over an hour back on December 20. Obviously, there’s no discussion of the various immigration-related brouhahas from the past week, but I think many people will still find it to be an interesting conversation. Russ and I have known each other since 1977, dating back to our University of Chicago days. Immigration was not something that I (or many other people) gave much thought to back then. Funny how times change.

Extreme Vetting

Not surprisingly, over-the-top and often erroneous reactions to President Trump’s executive order tightening refugee admissions are flooding the web today. So I thought it’d be useful to repost what I wrote about extreme vetting last summer when then-candidate Trump first floated the idea. Here is the article I wrote for Politico. And here’s a short excerpt that helps put the president’s actions in context:

Immigrant vetting, and even extreme immigrant vetting, has a very long tradition in American history. Since before the founding even, U.S. policies about whom the country chooses to welcome and reject have changed in response to changing conditions.

Shaking Up The Narrative

Some people have asked me what I thought of the actions against illegal immigration that President Trump announced yesterday. As far as I can tell, he did exactly what he promised he was going to do, so there were few surprises in terms of what was going to happen.

But along the way, the President did something else that really struck me: he forced a much-needed late-course correction in the media narrative. Practically every story about illegal immigration in the MSM tells of immigrants who overcome incredible hardships and make an amazing contribution to American life (how many times have we read about the illegal children who end up going to Ivy League colleges), or they describe the suffering that immigrant families endure when immigration enforcement breaks up the family unit.

These stories are real, and are definitely part of what we should be considering when we think about illegal immigration. But there are other stories to be told, stories that don’t fit in with the narrative. Some illegal immigrants commit crimes, and natives have been harmed; some drive cars under the influence and natives sometimes end up getting hurt; and some native families have suffered a great personal loss, a different type of family separation due to (the lack of) immigration enforcement. For the most part, the MSM has made sure that these stories are hidden away, never to be acknowledged or discussed in polite discussions of illegal immigration. I’ve seldom learned about these cases from CNN, the Washington Post, or the New York Times.

President Trump specifically emphasized that other side of illegal immigration yesterday. Not only did he personally call out some of those families that have suffered irreparable harm from illegal immigration, but it seems that there will now be a weekly report of criminal acts by illegal immigrants. Needless to say, that listing would never have been prepared under the old regime. Regardless of where one stands on illegal immigration, it is hard to argue against the fact that more information about the issue is far better than the one-sided-stories the MSM has been feeding us for years.

The Wall Of Peace

I took a trip to the Red Bloc, and I don’t mean Texas and the South, after I finished college. I mean the old Red Bloc, specifically the Soviet Union and East Germany. I was very curious to find out if my childhood memories of communist life were a figment of my imagination, or if that life was indeed as I remembered it. For the record, what I saw in the Soviet Union and East Germany, and particularly a very memorable trek across the Berlin Wall, more than reinforced my pre-existing impressions.

My wife and I are thinking of downsizing and while rummaging through old boxes and lots of old junk, I came across this tourist guide that I purchased in East Berlin back in the early 1970s. I thought the book had been lost long ago in one of my many moves, but somehow it survived all the way to today.

berlin-tourist-guide

I specifically remember this book because it was where I first found out that travel between East and West Berlin had not been restricted prior to the building of the Berlin Wall on August 13, 1961. I ended up using this very interesting fact in We Wanted Workers to illustrate the sizable “cost” that influences the migration decision. There was little reason for most East Germans to remain behind the Iron Curtain when all it took to escape the poverty and oppression was a cheap subway or train ride from East to West Berlin. And yet fewer than 15 percent of East Germans chose to move.

Rereading the brief socialist history of East Berlin (and the German Democratic Republic) in this tourist guide is very eye-opening. Unfortunately, the propagandist style seems faintly familiar and brings to mind how the mainstream media writes about many politically charged topics today. I thought this passage was particularly interesting, and I really like the reference to “experts” to quantify the costs and benefits.

wall-of-peace1

West Berlin became the cold war stronghold of the imperialists against the entire socialist camp…In West Berlin, more than 80 centres for agents and espionage were established which were intended to disturb the construction of socialism in the GDR. The American radio station RIAS and the western press poisoned the atmosphere, creating unrest against the population through hate propaganda and deliberately set out to entice scientists and specialists away from the GDR…

The hate campaigns of the press, the enticement and the acts of sabotage increased. The “Cold War” threatened to become a “hot war”–the third World War…On 13 August 1961 the GDR, through the action of the National People’s Army and the workers’ militia, overnight secured its borders also towards West Berlin…To make it quite clear to any aggressor that the border to West Berlin is a state frontier, the workers have made it well discernible by the anti-fascist protective wall…

According to expert estimates, the GDR lost 100,000 million marks through the open border, money which otherwise could have been used for construction work. The closing of the border brought an immediate and discernible easing. With new vigor, the Berlin working people started constructing their capital.

And that is how the “Wall of Peace” came about.

 

 

Chinese Graduate Students And The Productivity Of Their Advisors

Kirk Doran, Ying Shen, and I have just finished the final draft of our paper that looks at how the increase in the number of Chinese graduate students affected the productivity of their advisors in American universities. I can’t believe it’s been 9 years since Kirk and I met and began to collaborate on what turned out to be a very productive research project that examined various aspects of the productivity of professional mathematicians. (See here,  here,  here, and here, for some of the papers we’ve already published).

The Cultural Revolution destroyed the Chinese higher education system and China sent few students to doctoral programs abroad during those years. There was a pre-existing body of Chinese-ethnic scientists in the United States, but the flow into this group was virtually halted. After 1978, Deng Xiaoping’s reforms encouraged Chinese students to acquire their graduate training in Western universities. This policy shift led to a huge increase in the number of Chinese students studying in doctoral programs abroad, and particularly in American universities.

china-opening

Our paper measures the impact of this supply shock on the productivity of their advisors in the discipline of mathematics, and the figure neatly summarizes our key findings. The number of papers published by American advisors with Chinese ancestry increased substantially after the opening up of China. Because of “ethnic complementarities,” a tendency for the Chinese students to be mentored by Chinese-American advisors, the supply shock opened up many new sources for research collaboration for these advisors, resulting in more published papers.

The supply shock also affected the American advisors who did not have Chinese ancestry. The relatively fixed size of mathematics graduate programs virtually guarantees that American graduate students were crowded out by the Chinese students. The departments that attracted most of the Chinese students were ethnically “mixed” departments–a  Chinese-American mathematician was present in the department actively advising students prior to the opening of China. There was an obvious drop in the productivity of the American (i.e., non-Chinese) advisors employed in the mixed departments most affected by the supply shock. Those advisors experienced a decline in the number of students they mentored and in the number of papers they published.

The lesson is obvious, but worth emphasizing repeatedly. As is typical with supply shocks, there are winners and losers. In fact, there are winners and losers even when there are very sizable ethnic complementarities that benefit a particular segment of the scientific workforce.

The paper is forthcoming in the Journal of Human Resources.

Cato On Mariel

The Cato Institute’s Alex Nowrasteh posted a very interesting piece that reproduces and expands the findings in my Mariel paper. Although the title, “The Mariel Boatlift Raised the Wages of Low-Skilled Miamians,” is very misleading (making it a good example of Cato publicists gone wild), I actually liked the essay and recommend it to anyone interested in the subject.

My paper showed that the wage of high-school dropouts fell significantly after Mariel, but recovered by 1990. Here’s the graph that goes with that conclusion (where the shaded area indicates the margin of error):

Mariel_Figure_2

In early drafts of my Mariel paper, as well as in We Wanted Workers (Figure 7.5 on p. 148), I documented that the wage drop was not experienced by high school graduates, the group of workers on the next rung up the skill distribution. In contrast to the dropouts, high school graduates actually saw their wages rise. Here’s the graph from my book:

mariel-high-school-graduates

A few months ago, Joan Monras and I followed up on this insight to document a pattern common to many refugee supply shocks: refugees have harmful wage/employment effects on the workers that they most resemble, but beneficial effects on the workers that are different.

Nowrasteh’s conclusion that “low-skilled Miamians” gained comes about because he pools the two groups of workers (high school dropouts and high school graduates) into a large “low-skilled” workforce, and he shows that the wage of the average worker in this group increased as a result of Mariel. He concludes: “The Marielitos redistributed wages from dropouts to workers with only a high school degree with a net positive effect on all low-skill workers.”

The exercise illustrates two very important points that Nowrasteh does not emphasize. First, it shows just how easy it is to hide the adverse wage impact of immigration by redefining skill groups. This is a trick that, unfortunately, is used much too often to “prove” that immigration is good for everyone. As I wrote in We Wanted Workers (p. 196): “The more one aggregates skill groups, the more likely one hides away the specific group of affected workers–making it harder to document whether immigration made anyone worse off. The more laser-focused the group of native workers examined, the easier it is to detect that immigration affected the targeted group.”

Second, Nowrasteh (perhaps unwittingly) blows up the cornerstone underlying the Card-Peri argument that immigration has not made low-skill Americans worse off. That cornerstone is the assumption that high school dropouts and high school graduates are productive clones (or “perfect substitutes”). That assumption is what gives the researcher “permission” to pool those two groups. Because there are many fewer dropouts, the wage trend will essentially reflect whatever happened to the wage of high school graduates.

Nowrasteh’s documentation that Mariel had very different effects on high school dropouts and high school graduates flatly contradicts the assumption that the two groups are productive clones. If the two groups were clones, they should have reacted in exactly the same way to Mariel. But they didn’t. Instead, they are complements, implying that the two groups should be studied separately. Those who buy into the Card-Peri argument need to go back to the drawing board if they want to salvage the conclusion that immigration didn’t really harm the least skilled Americans.