NCPA - National Center for Policy Analysis

Immigrant Welfare Receipt Versus Taxes Paid

June 24, 2002

Immigrants are not a drag on the economy, according to an NCPA analysis. The most recent and comprehensive data on the subject is from the 1976 Survey of Income and Education (SIE). It showed that American-born families received more benefits than immigrant families.

  • In 1976, American-born families, on the average, received a total of $922 a year from the federal government for retirement, including Social Security, Medicare and Medicaid.
  • The average immigrant family, received $92 in elderly entitlement benefits during their first five years, $227 during the second five years, $435 the third five years and $520 in years 16 through 25.

Elderly immigrants may receive more than they contribute economically. However, only 5 percent of immigrants come after retirement; and 80 percent before they are 45. Thus taxes paid by younger immigrants more than pay the government benefits for their elders. And since the average immigrant is 28 years old, while the average American-born citizen is 33, on the whole, immigrants are supporting American-born citizens in such pay-as-you-go systems as Medicare and Social Security, not the other way around.

Although immigrants receive less assistance from the federal government, the average immigrant family pays more in taxes than the average American-born family (see figure).

  • The SIE reported in 1976 that the average American-born family paid $3,008 in taxes per year.
  • In comparison, immigrant families who had been in the United States 10 years or less paid $3,369.
  • Those living here 11 to 15 years paid $3,564 and those here 16 to 25 years paid $3,592.

Similarly, a 1995 Cato Institute study found that illegal immigrants paid approximately 46 percent as much in taxes as American-born citizens, but received only 38 percent as much from the government.

Source: Lauren Mutti (NCPA intern), "Immigrants, Welfare and Work," Brief Analysis No. 400, June 24, 2002.

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