Welfare Recipiency and Its Effect on Immigrant Earnings

Mark A. Leach, University of California, Irvine
Raaj Tiagi, University of California, Irvine

Public and scholarly debates surrounding immigration policy often focus on illegality and concerns that immigrants will become public charges after their arrival while ignoring immigrants’ contributions to the U.S. economy and society at large. While much research has investigated levels of immigrants’ welfare recipiency, few investigations have attempted to answer questions surrounding the effects of welfare recipiency on immigrants’ subsequent labor market outcomes. Our results suggest that such outcomes run counter to conventional knowledge about welfare recipiency and labor market experiences among natives. Immigrant groups that have higher rates of welfare recipiency experience faster earnings growth in the subsequent decade relative to other immigrant groups that have lower rates of receipt. We theorize that transfer payments offer immigrants an adjustment period upon arrival into the country that allows them to better position themselves in the labor market relative to other immigrants who cannot afford such a transition.