Tim Smeeding Director, Institute for Research on Poverty, University of Wisconsin Madison

1. Social Transfer Support andPoverty for Immigrant Familieswith Children:Lessons from the LuxembourgIncome Study Tim Smeeding Director, Institute for Research on Poverty, University of Wisconsin Madison (with Coady Wing and Karen Robson) for the West Coast Poverty Center University of Washington, Seattle January 15, 2009

2. Introduction LIS and other datasets offer the possibility to compare ‘immigrants’ and ‘minorities’ to majorities in several nations for at least one time period (circa 2000). Research question: How much help do less-advantaged groups get from social tax-benefit programs and from their own market incomes in rich nations?

3. Working hypothesis: The country where ‘immigrants’ (also identified as minorities in some EU nations) live is more important than their legal (majority-minority/immigrant) status in determining net social benefits (cash and near-cash transfers ) and poverty status. If supported, then countries can make a difference for immigrant child well being—at least in income support policy terms.

4. General Research Questions • Migrants come to countries for work, but if something goes wrong, what do countries look like in terms of overall anti-poverty safety net effects on minority and immigrant groups—how do they fare? • How big are differences in safety net effects between groups within nations as compared to across nations? • Unanswered in this paper: How about education and healthcare?

5. The Paper and the Talk • Methodology and measurement • What is an “immigrant” (good question!) ? And is it more than a “minority”? • Literature (brief) and data • Results: General and group-specific • Discussion • Policy issues and policy impacts • Survey issues

6. Methods • Measure relative HOUSEHOLD poverty at 50 percent adjusted median disposable income • Market Income (MI) vs. Disposable Personal Income (DPI) • Net social benefits (cash and near-cash transfers minus direct taxes paid) • Not counting health or education benefits • But first, must define ‘immigrant’ and/or ‘minority’

7. Meaning of ‘Minority’ or ‘Immigrant’ in LIS data • US, France, Italy, Canada : ‘Born outside country’ • Australia, Germany, Sweden: ‘Non-national’ • UK: ‘Non-white or minority’ (with many categories of ethnicity) • Austria, Belgium, Portugal: ‘Multiple nationality’ • Finland: ‘Swedish speaking’ (HA!)

8. Idiosyncrasies • Europeans and Euro data sources have not yet recognized the concept of “immigrant,” some examples: • EU-ECHP (old panel samples and therefore bad for this purpose) compare to new cross-sectional data b. EU-SILC (birth, nationality, are consistent and are improvements—but no access yet)

9. Idiosyncrasies • Native American blacks not counted as minority in this go-around (though ‘minority’ is all you have in UK data) • ‘Naturalized’ vs. not (data question in only two surveys, so far) • ‘Documented’ vs. not (sampling question and response rate question) • Our decision: press on but be careful. See raw (Appendix Table 1)-- and weighted numbers -- next

12. Literature: Sparse • Lots out there on earnings for second vs. first generation minorities and on labor market effects of immigrants • Some PISA studies of immigrant educational attainment (not bad) • Lots on ‘rhetoric’ of pull-back of welfare state benefits in face of immigration • BUT, not much hard evidence on how cash welfare states react to immigrants in across country context

13. Results: Global Differences • Standard LIS finding: Big differences in welfare state across nations -- MI vs. Poverty ( Figure 1) -- All vs. Child Poverty (Figure 2)

16. Results: How About Poverty and Program Effects for ‘Immigrant’ vs. ‘Majority’? • Minority-Majority Poverty Rates (Table 2) • Overall System Effects: Majority, All and Kids (Figures 3a, 4a) vs. Minority, All and Kids (Figures 3b, 4b)

22. Results So Far: • Minority poverty rates exceed majority rates by 50-100 percent • But overall system effects for majority and minority households, including kids, appear to be very similar

23. Final Results • Majority vs. minority poverty reduction for all households with kids: Last figures (5 and 6) • Regression line (solid): Consistency of spending effects • 45-degree line (hatched): Similarity of effects on each group • Note red countries are echp samples

24. Figure 5. Household Antipoverty Effects for Immigrants and Majorities across Countries

25. Figure 6. Antipoverty Effects for Immigrants and Majority Children across Countries

26. Another larger set with small samples from the last draft: More “public use” ECHP files inred ( again )

27. ECHP in Red, Percent Reduction in Child Poverty: Immigrants vs. Majorities 100 90 80 Belgium Finland Italy (e) Sweden Austria 70 France Ireland (e) 60 England 50 Immigrant Children 40 Australia Portugal (e) Germany 30 Spain Canada 20 Greece 10 United States 0 0 10 20 30 40 50 60 70 80 90 100 MajorityChildren Countries in red use the echp

28. Discussion • Majority-minority poverty rates and welfare state treatment differ by nation, but biggest differences are across nations and not within nations • USA looks bad in most comparisons, especially compared to Canada and Australia, but mainly because of its weak welfare state—not because it’s welfare state mistreats immigrants in particular

29. Discussion • Countries CAN make a difference in poverty IF they decide to make reducing poverty a priority! • Case in point: UK 1999 PM Blair announces he will halve child poverty in 10 years and eliminate it in 20 ! –and he commits 1 percent of GDP to do so!

30. Result: Headline numbers on child poverty • When Blair declared war on poverty in 1999, 3.4 million children – 1 in 4 – were in poverty (whether defined in relative or absolute terms). • Relative* poverty fell 15% (500,000 children) by 2004 and 18% (600,000) by 2006-2007 • Absolute ( like US) poverty fell nearly 50% (1.6 million) by 2004 and >50% (1.8 million) by 2006-2007 *Relative poverty in EU and UK is defined as share of children below 60% of median income (BHC). Absolute poverty is share of children below threshold set to 60% of median income in 1998/99.

32. Quick Summary • Definitions of immigrant are rough and inconsistent and need more similarity and added consistency across nations • ‘Immigrant’ is not the same as ‘minority’—But when will EU learn? • Support for hypothesis that destination country more important than minority-immigrant status in determining poverty status

33. What is left to do? LOTS More work needed here in this paper : • Add results from EU-SILC (similar differences in PI poverty rates according to 2007 EU Report); • Breaks by age of kids; • Look at parental mix; • Look at time in country

34. What is left to do? LOTS—cont’d. • Really need comparable assessments for education and health care systems: --education appears to be almost universal , though not always of same quality -- health care is distributed on ‘need-only’ basis in other rich nations; but fight now with SCHIP and Medicaid to allow access for legal immigrants here less than 5 years

35. What to Lobby Surveys For?: Two Questions For ALL ADULTS: - Were you born in this country (Y or N)? - If no, when did you emigrate? For ALL Households with CHILDREN: - Were children born in this country (Y or N)? - If no, where were they born and when did they come to the US?