Economic Well-Being of the Elderly Immigrant Population

George J. BorjasHarvard University

August 2009

2. Elderly immigrants, as share of population

3. 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: 1970-2000 decennial censuses, and the 2005-2007 American Community Surveys.

4. Income gap between elderly immigrants and natives, 1970-2007

5. Income gap, by years since migration

6. Income sources of elderly immigrants and natives, 2007

Natives Immigrants

Recipiency rate

Mean income

($1000s)

Recipiency rate

Mean income ($1000s)

All sources 23.2 17.1

Earnings 17.7 25.8 16.8 29.8

Investment 34.1 12.2 20.1 13.6

Social Security 91.0 9.0 71.2 7.9

Other retirement

40.0 13.1 21.9 11.5

Public assistance

4.4 5.1 13.1 5.1

Other 9.0 10.6 6.3 9.0

7. Log difference in total income, 2000

Recent immigrants Earlier immigrantsRaw

difference

Adjusted difference

Raw differenc

eAdjusted

differenceLog total income

-.760 -.660 -.223 -.182

(.008) (.007) (.003) (.002)

Controls in calculating adjusted difference: gender, age, race, educational attainment, marital status, family size, householder status, state of residence.

8. Log difference in earned income, 2000

Recent immigrants Earlier immigrantsRaw

difference

Adjusted difference

Raw differenc

eAdjusted

differenceFraction of time worked

-.007 -.018 .013 .016

(.002) (.002) (.001) (.002)Log hourly income

-.220 -.173 .072 .013

(.020) (.020) (.007) (.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.

9. Log difference in investment income, 2000

Recent immigrants Earlier immigrants

Raw difference Adjusted

difference

Raw differenc

eAdjusted

differenceRecipiency rate -.337 -.190 -.101 -.060

(.004) (.003) (.001) (.003)

Log income -.666 -.405 .051 .078

(.044) (.043) (.009) (.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.

10. Log difference in Social Security income, 2000

Recent immigrants Earlier immigrants

Raw difference Adjusted

difference

Raw differenc

eAdjusted

differenceRecipiency rate -.639 -.555 -.132 -.108

(.002) (.002) (.001) (.001)

Log income -.261 -.195 -.079 -.070

(.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.

11. Log difference in “other” retirement income, 2000

Recent immigrants Earlier immigrants

Raw differenc

eAdjusted

difference

Raw differenc

eAdjusted

differenceRecipiency rate -.120 -.099 -.300 -.236

(.001) (.001) (.003) (.003)

Log income -.184 -.157 -.210 -.154

(.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.

12. Log difference in public assistance income, 2000

Recent immigrants Earlier immigrants

Raw differenc

eAdjusted

difference

Raw differenc

eAdjusted

differenceRecipiency rate .216 .182 .068 .056

(.002) (.002) (.001) (.001)

Log income .174 .009 .070 -.036

(.014) (.014) (.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.

13. Assimilation and cohort effects

Cohort effects

Pre-1990 arrivals

Post-1990 arrivals

Assimilation effect

Log total income

-.943 -.450 .304

(.005) (.006) (.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.

14. National origin differences

Canada Mexico Cuba China

Philippines

Vietnam

Log income 0.085 -0.897-

0.547 -0.604 -0.357 -0.855Log earned income 0.166 -0.433

-0.157 0.122 -0.025 -0.108

Social Security recipiency rate 0.833 0.684 0.787 0.568 0.611 0.512Other retirement:Recipiency rate 0.377 0.128 0.182 0.147 0.225 0.102

Log income -0.024 -0.440-

0.420 -0.254 -0.023 -0.278Public assistance:Recipiency rate 0.031 0.133 0.143 0.218 0.175 0.312

Log incomes are relative to natives.

15. Main source countries

Source countries of immigrants

Source countries of immigrants

aged 18-64 aged 65+Percent of immigrant

sPercent of immigrants

Mexico 32.4 Mexico 13.1Philippines 4.4 Cuba 6.6India 4.2 Philippines 5.6China 3.2 China 5.5El Salvador 3.1 Germany 5.5Vietnam 3.1 Canada 5.2Korea 2.7 Italy 4.4Cuba 2.1 India 2.5Dominican Republic 2.1 England 2.5Guatemala 2 Vietnam 2.4

16. Persistence of national origin differences, 1990-2007

17. 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) -0.377 -0.553Earned income:

Fraction time worked 0.126 0.138Log hourly income (relative to natives)

0.017 -0.080

Investment income:Recipiency rate 0.201 0.138Log income (relative to natives) 0.089 -0.025

Social security income:Recipiency rate 0.712 0.650Log income (relative to natives) -0.138 -0.213

Other retirement income:Recipiency rate 0.219 0.170Log income (relative to natives) -0.182 -0.226

Public assistance income:Recipiency rate 0.131 0.146Log income (relative to natives) 0.208 0.170

18. 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.