Scope and Impact of Welfare Reform's Immigrant Provisions, The

Assessing the New Federalism Discussion Paper No. 02-03

Assessing the New Federalism is a multi-year Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states. It focuses primarily on health care, income security, employment and training programs, and social services. Researchers monitor program changes and fiscal developments. Alan Weil is the project director. In collaboration with Child Trends, the project studies changes in family well-being. The project provides timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.

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Table of Contents

Introduction
    Summary
    Background

PRWORA's Immigrant Provisions: A Brief Overview
    Comprehensive Revision of Immigrant Eligibility
    Differing Goals for Immigrants
    Eligible Immigrant Populations Sponsorship
    hift in Responsibility to the States

Major Changes Since Enactment
    Congressional Restorations
    Administrative Responses
    The States' Responses
    The Courts' Responses

PRWORA's Impact on Immigrant Benefit Use
    Early Evidence — "Chilling" Effects
    New Analyses of Immigrant Program Participation
        Overall Declines
        Low-Income Families with Children
        Mixed Status Families
        Refugees
        Change in TANF Caseloads and the Recipient Population
        Medicaid Use and Health Insurance
        State Level Changes
    Explaining the Trends in Immigrant Program Participation
        Naturalization Rates and Benefits Use
        Income Changes
        Citizen-LPR Differences in Program Participation


Considering Reform

References

Figures

1. Participation in Means-Tested Benefit Programs for Legal
Permanent Resident Alien Families: 1994 and 1999

2. Participation in Means-Tested Benefit Programs for Low-Income
Legal Permanent Resident Alien Families with Children: 1994 and 1999

3. Participation in Means-Tested Benefit Programs for Low-Income
Legal Permanent Resident Alien and Citizen Families with Children: 1994 and 1999

4. Participation in Means-Tested Benefit Programs for Low-Income
Families with Children:  Refugee Aliens — 1994 and 1999; Citizens and LPR Aliens — 1999

5. Participation in Medicaid for Low-Income Working-Age Adults (18-64),
by Nativity and Legal Status:  1994 and 1999

6. Participation in Medicaid for Low-Income Children (under 18),
by Nativity and Status of Parents and Children:  1994 and 1999

7. Health Insurance Coverage for Low-Income Children (under 18),
by Status of Parents and Children: 1999

8. Participation in TANF for Low-Income Legal Permanent Resident Alien
Families with Children: U.S., California, and Selected Groups of States, 1994 and 1999

Tables

1. Number of Families and Families Receiving TANF, by
Citizenship of Head and Spouse: 1994 and 1999

2. Partition of 1994-1999 Change in Use of Welfare, Food Stamps, and
Medicaid into Effects of Poverty-Family-Specific Use Rates, Poverty Distribution,
and Presence of Children Distribution, Using Standardization Techniques for
Families in the United States, by Nativity and Status

3. Partition of Citizen-LPR Difference in Use of Welfare, Food Stamps, and
Medicaid into Effects of Poverty-Family-Specific Use Rates, Poverty Distribution,
and Presence of Children Distribution, Using Standardization Techniques
for Families in the United States:  1994, 1999.

Introduction

The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) not only overhauled the nation's welfare system, it redefined immigrants' access to public benefits. Indeed the law's immigrant provisions — to which an entire title is dedicated (Title IV) — can be viewed as a watershed in the related domains of immigrant integration and immigration policy, as well as the federalism issues the new provisions raise.¹

In this paper, we discuss the background and character of the changes introduced by this comprehensive, far-reaching law and then sketch the post-enactment responses of the Congress, the states, and the courts.  We further explore the impacts that the law has had on benefit use among immigrants, highlighting the changes in usage among different immigrant groups and factors related to these changes, such as naturalization and rising incomes. We conclude by discussing a number of issues that may be examined within the context of welfare reauthorization.

Summary

For immigrants, welfare reform went well beyond conditioning access to cash benefits on work.  Rather, the law set out a comprehensive scheme for determining immigrant eligibility for a wide range of social benefits that are provided by governments at all levels.  Reform represented a major departure from prior policy by making citizenship more central to the receipt of benefits, by granting the states rather than the federal government the power to determine immigrant eligibility for benefits, and by drawing a sharp distinction between immigrants arriving before and after PRWORA's enactment on August 22, 1996.

Our recently completed analysis of the 1995 and 2000 Current Population Surveys (CPS) reveals a number of striking trends in immigrants' use of public benefits:

• There were substantial declines between 1994 and 1999 in legal immigrants' use of all major benefit programs:  TANF (-60 percent), food stamps (-48 percent), SSI (-32 percent), and Medicaid (-15 percent).
 
• By 1999, low-income legal immigrant families with children had lower use rates for TANF and food stamps than their low-income citizen counterparts.  Medicaid use rates for these families did not vary by citizenship, testifying, perhaps, to the success of policies intended to broaden the health insurance coverage among children.
 
• Nonetheless, individual-level analyses reveal that low-income, working-age noncitizens had substantially larger declines in Medicaid use rates than their citizen counterparts. Loss of  Medicaid is not being made up by other forms of health coverage, but rather is resulting in a total loss of health insurance.
 
• Benefit use rates among U.S. citizen children in low-income immigrant families (i.e., in poor mixed-status families) were substantially lower than for citizen children of native parents in poor families.
 
• Declines in benefit participation were especially steep among low-income refugee families whose use rates for TANF, food stamps, and Medicaid were comparable to citizens by 1999.
 
• Declines in immigrants' use of benefits are evident across all areas of the country.  They are especially steep among poor families living in states that make few benefits available to immigrants, but which have rapidly rising immigrant populations.
 
• In general, the declining benefit use occurring between 1994 and 1999 was not accounted for by increased naturalizations or by rising incomes within immigrant families.
 

Despite reduced use of public benefits, half of immigrant families were poor in 1999; poor legal immigrants were far more likely to be uninsured than their citizen counterparts; and immigrant children were more likely to be food insecure than children of citizens (Capps 2001).

With a recession descending and welfare reform reauthorization looming, these precipitous declines in the face of continuing high poverty rates raise important questions.  As this is written, some participants in the reauthorization debate, concerned that that the reforms went too far, have proposed restoring food-stamp eligibility to legal immigrants and granting states the authority to extend Medicaid and the State Children's Health Insurance Program (SCHIP) to some post-enactment immigrants.  These measures would grant non-cash aid to many families and place immigrants arriving before and after welfare reform on a more equal footing.  Proposed restorations raise issues regarding the extent of sponsors' responsibility for immigrants, welfare reform's impact on successfully integrating immigrant residents into the broader society, substantially altered incentives to naturalize, equitable intergovernmental cost sharing, and the limits to delegating federal immigration control powers to the states, especially in an era of global competition.

Background

At the time of welfare reform's passage, some researchers contended that the availability of public benefits was increasingly influencing immigrants' migration decisions, explaining in part a perceived decline in the quality of new immigrants — that is, their education, incomes, and propensity to use benefits (Borjas and Hilton 1995).  In fact, the power of the so-called "welfare magnet," the perceived decline in the quality of immigrants, and even the disproportionately high use of benefits among noncitizen populations were all heavily contested in the literature (Duleep and Regets 1994; Fix and Passel 1994; Van Hook, Glick, and Bean 1999).  Nonetheless, the influence of this linkage of welfare to immigration flows can be seen in PRWORA's departing premise that "self-sufficiency has been a basic principle of United States immigration policies"² (emphasis added).

While often associated with fiscally conservative Republicans, political interest in restricting immigrants' access to welfare evolved in a bipartisan manner through the mid-1990s.  Initial proposals limiting noncitizens' access to SSI³ and, eventually, to other public benefits originated in the Democratically-controlled House of Representatives and the Clinton Administration.  In due course, more far-reaching restrictions were written into The Contract With America (Gingrich and Armey 1994), the policy blueprint for the Republican Congress elected in 1994.  Finally, the redefinition of immigrants' rights to benefits that was eventually codified in Title IV of PRWORA, was drafted by a Republican Congress and signed into law on August 22, 1996 by a somewhat uneasy President Clinton who, despite his intent on "ending welfare as we know it," expressed reservations about the bill's immigrant provisions.

The political context within which PRWORA's immigrant restrictions were created should also be recalled.  The law was enacted during a period of anti-immigrant sentiment, one that witnessed the enactment of two broad laws — The 1996 Antiterrorism and Effective Death Penalty Act⁴ and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996⁵ — that, among other things, limited noncitizens' rights of residence and judicial appeal as well as the ability of undocumented immigrants to adjust to legal status.

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1. The law's impacts on immigrants and their families are not confined to Title IV. PRWORA's restructuring of TANF, the imposition of time limits, new incentives to work, and the many other changes introduced affect low-income immigrant families eligible to receive benefits.

2. 8 U.S.C. Section 1601(1) (Supp. V 1999).

3. The proposal was to extend the deeming period during which a sponsor's income is ascribed to the immigrant from 3 to 5 years.

4. Pub.L. 104-132 (1996).

5. Pub.L. 104-208 (1996).

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