Economic Well-Being of the Elderly Immigrant Population George J. Borjas Harvard University August 2009
1. Elderly immigrants, as share of population
2. Questions What are the trends in the relative economic status of elderly immigrants? And what factors cause disparities in incomes between elderly immigrants and natives? Data: decennial censuses, and the American Community Surveys.
3. Income gap between elderly immigrants and natives,
4. Income gap, by years since migration
5. Income sources of elderly immigrants and natives, 2007 NativesImmigrants Recipiency rate Mean income ($1000s) Recipiency rate Mean income ($1000s) All sources Earnings Investment Social Security Other retirement Public assistance Other
6. Log difference in total income, 2000 Recent immigrantsEarlier immigrants Raw difference Adjusted difference Raw difference Adjusted difference Log total income (.008)(.007)(.003)(.002) Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence.
7. Log difference in earned income, 2000 Recent immigrantsEarlier immigrants Raw difference Adjusted difference Raw difference Adjusted difference Fraction of time worked (.002) (.001)(.002) Log hourly income (.020) (.007) Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence. “Recent immigrants” arrived in the past 10 years.
8. Log difference in investment income, 2000 Recent immigrantsEarlier immigrants Raw difference Adjusted difference Raw difference Adjusted difference Recipiency rate (.004)(.003)(.001)(.003) Log income (.044)(.043)(.009) Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence. “Recent immigrants” arrived in the past 10 years.
9. Log difference in Social Security income, 2000 Recent immigrantsEarlier immigrants Raw difference Adjusted difference Raw difference Adjusted difference Recipiency rate (.002) (.001) Log income (.008)(.007)(.001)(.002) Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence. “Recent immigrants” arrived in the past 10 years.
10. Log difference in “other” retirement income, 2000 Recent immigrantsEarlier immigrants Raw difference Adjusted difference Raw difference Adjusted difference Recipiency rate (.001) (.003) Log income (.025)(.005)(.024)(.022) Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence. “Recent immigrants” arrived in the past 10 years.
11. Log difference in public assistance income, 2000 Recent immigrantsEarlier immigrants Raw difference Adjusted difference Raw difference Adjusted difference Recipiency rate (.002) (.001) Log income (.014) (.009) Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence. “Recent immigrants” arrived in the past 10 years.
12. Assimilation and cohort effects Cohort effects Pre-1990 arrivals Post-1990 arrivals Assimilation effect Log total income (.005)(.006) The cohort effects measure the difference (holding years-since-migration constant) between the outcomes observed for the immigrant cohort and natives. The assimilation effect measures the difference (for a given cohort) between immigrants who have been in the country at least 10 years and immigrants who have been in the country fewer than 10 years.
13. National origin differences CanadaMexicoCubaChinaPhilippinesVietnam Log income Log earned income Social Security recipiency rate Other retirement: Recipiency rate Log income Public assistance: Recipiency rate Log incomes are relative to natives.
14. Main source countries Source countries of immigrants aged 18-64aged 65+ Percent of immigrants Mexico32.4Mexico13.1 Philippines4.4Cuba6.6 India4.2Philippines5.6 China3.2China5.5 El Salvador3.1Germany5.5 Vietnam3.1Canada5.2 Korea2.7Italy4.4 Cuba2.1India2.5 Dominican Republic2.1England2.5 Guatemala2Vietnam2.4
15. Persistence of national origin differences,
16. Predicted impact of shift in national origin Actual mean, using current national origin Predicted mean, using future national origin Log total income (relative to natives) Earned income: Fraction time worked Log hourly income (relative to natives) Investment income: Recipiency rate Log income (relative to natives) Social security income: Recipiency rate Log income (relative to natives) Other retirement income: Recipiency rate Log income (relative to natives) Public assistance income: Recipiency rate Log income (relative to natives)
17. Conclusion Significant decline in the relative income of elderly immigrants. In 1970, the average income of elderly immigrants was only 5 percent below that of elderly natives. By 2007, the income gap had widened to 30 percent. Elderly immigrants have significantly lower recipiency rates for investment incomes, Social Security benefits, and other retirement benefits. But they are more likely to received earned income and public assistance. The national origin mix of elderly immigrants will shift rapidly, with the aging of the large immigrant population that originated in less developed countries. Because these immigrants tend to exhibit worse economic outcomes, the average income gap between elderly immigrants and natives will widen in the future.