The Poverty Reduction Success of Public Transfers For Working Age Immigrants and Refugees In the...

The Poverty Reduction Success of Public Transfers

For Working Age Immigrants and RefugeesIn the United States

Christopher R. Bollinger Paul Hagstrom

University of Kentucky Hamilton College

We thank Lindsay Allen for excellent research assistance. Author Bollinger thanks the University of Kentucky Center for Poverty Research for supporting this project.

Refugees/Immigrants/PRWORA

• Prior to PRWORA, all legal permanent residents were eligible for Food Stamp, AFDC, Medicaid and SSI.

• PRWORA Denied these program benefits to immigrants in general.

• Refugees, however, are eligible for the first 5 years they are in the US (and then eligible if they are citizens).

Previous Research• Program declines among immigrants and refugees (Fix and

Passell, 2002; Lofstrom and Bean, 2003; Borjas, 2002; Haider,2004; Bollinger and Hagstrom, 2006)

• Earnings and Assimilation (Borjas, 1987, 1990, 1994; Kosoudji, 1989; Aguilar and Gustafsson, 1991; Reitz, 1998; Galster et al 1999; Card et al. 2000; Butcher and DiNardo, 2002; Longva and Raaum, 2002)

• Poverty Rates (Lee, 1994; Ley and Smith, 1997; Clark 1998)• Previous research often ignored refugees or only used crude

measures (country of origin). Exception Bollinger and Hagstrom, food stamps, refugees are different.

Measuring Refugee Status

• No large public use cross sectional data sets have refugee status and income.

• CPS has detailed information on Income and Immigrant status (including country of origin and year of entry)

• Census of Legal Permanent Residents has refugee status, country of origin, year of entry, gender, and age at entry.

Methodology

• Calculate refugee probability from Census of LPR: age and age squared by country of origin, year of immigration and gender.

• Use model from Census to predict refugee probability in CPS.

• Use these probabilities for weighted averages and in likelihood functions for probits and other models (like 2 sample IV).

Poverty Measures

• Standard Poverty Threshold Used for all• Private Income: Only private income sources

such as earnings, investment income, private transfers (alimony, child support, pensions).

• Official Measure: Private Income + social security + means tested cash transfers.

• Policy Income: Private Income net of all taxes (including EITC effect) and transfers (including food stamps, housing subsidies and school lunch).

Trends in PovertyFigure 1: Three Poverty Measures Using Full Sample

.1.1

5.2

.25

.3

1994 1996 1998 2000 2002year

By Immigration StatusOfficial Poverty Rates over Time

.1.1

5.2

.25

.3

1994 1996 1998 2000 2002year

By Immigration StatusNet Poverty Rates over Time

.1.1

5.2.

25.3

1994 1996 1998 2000 2002year

Natives Immigrants

Refugees

By Immigration StatusPrivate Poverty Rates over Time

Poverty Rates

All Native Immigrants Refugees

Pre 96 Post 96

Pre 96 Post 96

Pre96 Post96 Pre96 Post96

Private 17.7% 15.7% 17.2% 15.3% 21.7% 18.5% 28.7% 20.9%

Official 12.9% 11.4% 12.5% 11% 16.6% 14.7% 22.1% 15.5%

Net 12.0% 10.1% 11.6% 9.8% 15.6% 12.9% 20.1% 13.5%

Basic Model Adding Labor Market

Adding Full Demographicsa

Local Unemployment 0.0610*** 0.0491***(0.0021) (0.0025)

Post Reform -0.0670*** 0.0110 0.0107(0.011) (0.013) (0.014)

Immigrant 0.144*** 0.153*** 0.383***(0.016) (0.035) (0.040)

Immigrant x Post Reform -0.0386* -0.0220 -0.0494**(0.020) (0.022) (0.025)

Immigrant x Local Unemployment

-0.00528 -0.0172***

(0.0045) (0.0050)Refugee 0.356*** 0.0584 -0.0888

(0.047) (0.13) (0.16)Refugee x Post Reform -0.270*** -0.170** -0.163

(0.075) (0.087) (0.10)Refugee x Local Unemployment

0.0387** 0.0582***

(0.017) (0.020)Constant -0.942*** -1.353*** -0.668***

(0.030) (0.033) (0.042)Observations 293075 293075 293075Standard errors in parentheses*** p<0.01, ** p<0.05, * p<0.1All Models include year and state fixed effects.a. Demographics include the Head of Household, Spouse, and Household variables from Table 2.

Table 4: Probit Estimation Results for Dependent Variable Private Poor Using Full Sample

Basic ModelAdding Labor Market



Post Reform -0.00783 -0.00303 0.00307(0.012) (0.012) (0.014)

Immigrant 0.161*** 0.142*** 0.359***(0.017) (0.034) (0.039)

Immigrant x Post Reform 0.00659 0.0272 0.00819(0.021) (0.022) (0.025)


-0.00125 -0.0154***

(0.0042) (0.0048)Refugee 0.346*** -0.0722 -0.449***

(0.049) (0.13) (0.17)Refugee x Post Reform -0.320*** -0.191** -0.148


0.0553*** 0.111***

(0.017) (0.021)Constant -1.231*** -1.553*** -0.932***

(0.031) (0.034) (0.043)Observations 293075 293075 293075Standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1All Models include year and state fixed effects.a. Demographics include the Head of Household, Spouse, and Household variables from Table 2.

Table 5: Probit Estimation Results for Dependent Variable Officially Poor (Counted Income less than Poverty Threshold) Using Full Sample

Basic Model Adding Labor Market



Post Reform -0.00990 -0.00407 -0.0786***(0.013) (0.013) (0.014)

Immigrant 0.164*** 0.181*** 0.368***(0.017) (0.035) (0.039)

Immigrant x Post Reform -0.0103 -0.000703 -0.0169(0.021) (0.022) (0.025)


-0.00610 -0.0168***

(0.0043) (0.0049)Refugee 0.298*** -0.0280 -0.230

(0.050) (0.13) (0.16)Refugee x Post Reform -0.267*** -0.166* -0.140


0.0426** 0.0670***

(0.017) (0.020)Constant -1.312*** -1.615*** -0.941***

(0.033) (0.035) (0.044)Observations 293075 293075 293075Standard errors in parentheses*** p<0.01, ** p<0.05, * p<0.1All Models include year and state fixed effects.a. Demographics include the Head of Household, Spouse, and Household variables from Table 2.

Table 6: Probit Estimation Results for Dependent Variable Net Poverty Using Full sample

Removed -Official Basic Model Adding Labor Market


Local Unemployment -0.0206 -0.00706(0.025) (0.027)

Post Reform -0.0160 -0.102 -0.129(0.025) (0.076) (0.079)

Immigrant 0.128*** 0.178*** 0.151***(0.033) (0.045) (0.047)

Immigrant x Post Reform 0.111*** 0.0312*** 0.0224**(0.042) (0.0096) (0.0100)


-0.170 -0.451

(0.24) (0.28)Refugee 0.103 -0.167 -0.0843

(0.096) (0.16) (0.18)Refugee x Post Reform -0.269* 0.0340 0.0979***


0.451*** 0.326*** 1.185***

(0.061) (0.066) (0.076)Constant 48353 48353 48353

Table 7: Probit Estimation Results for Dependent Variable Removed from Official Poverty Using Private Poor Subsample

Removed-Net Basic Model Adding Labor Market

Adding Full Demographics

Local Unemployment -0.0118 -0.00697(0.024) (0.024)

Post Reform -0.0124 0.0761 0.0532(0.024) (0.067) (0.068)

Immigrant 0.106*** 0.0510 0.0451(0.031) (0.041) (0.042)

Immigrant x Post Reform 0.0402 0.00326 0.00177(0.039) (0.0082) (0.0083)


-0.0637 -0.0301

(0.22) (0.23)Refugee 0.00263 -0.0945 -0.0868

(0.088) (0.15) (0.16)Refugee x Post Reform -0.121 0.00760 0.0177


0.121* 0.794***

(0.064) (0.071)Constant 48353 48353 48353

*** p<0.01, ** p<0.05, * p<0.1All Models include year and state fixed effects.a. Demographics include the Head of Household, Spouse, and Household variables from Table 2.

Table 7: Probit Estimation Results for Dependent Variable Removed from Net Poverty Using Private Poor Subsample

Conclusions

• Immigrants are more likely to be poor, refugees most likely.

• Policy, both pre- and post-reform appears to move refugees and immigrants out of poverty more effectively than native counterparts.

• Differences in poverty rates, in general, are due to differences in private sources of income rather than policy differentials.

The Poverty Reduction Success of Public Transfers For Working Age Immigrants and Refugees In the...

Documents

Transcript of The Poverty Reduction Success of Public Transfers For Working Age Immigrants and Refugees In the...