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Elderly immigrants’ labor supply response to supplemental security income. (Kaushal 2010)

Absence of conflict of interest.

Citation

Kaushal, N. (2010). Elderly immigrants’ labor supply response to supplemental security income. Journal of Policy Analysis and Management, 29(1), 137-162.

Highlights

  • The study objective is to examine the impact of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 on employment outcomes of foreign-born people and noncitizens ages 60 to 74
  • The study used a statistical model and the data from the Current Population Survey’s monthly outgoing rotation group and the March Current Population Survey from 1994 to 2005 to estimate the impact.
  • The study found that the PRWORA is associated with increased employment and decreased retirement for foreign-born men compared with U.S.-born men, but it found no statistically significant association with the employment for foreign-born women.
  • The quality of the causal evidence presented in this report is low because the study is a nonexperimental analysis that does not demonstrate that the groups were similar before the policy change. This means we are not confident that the estimated effects are attributable to PRWORA; other factors are likely to have contributed.

Intervention Examined

Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Features of the Intervention

The PRWORA prohibited noncitizens ages 65 and older from receiving Supplemental Security Income unless they had worked in the United States for at least 40 eligible quarters. The act went into effect in August 1996.

Features of the Study

The study is a nonexperimental analysis that used statistical models to estimate the association between the PRWORA and the employment rate, number of hours worked, retirement rate, and growth in annual family income of foreign-born people and noncitizens ages 60 to 74. The study examines data from 1994 to 2005 on about 230,000 men and 260,000 women. The data are from several sources, including survey data from the Current Population Survey, state unemployment rates from the Bureau of Labor Statistics, and state per capita income data from the Bureau of Economic Analysis.

Findings

Employment

  • The study found that PRWORA was associated with an increased employment rate and hours worked and a decreased retirement for foreign-born or noncitizen men compared with U.S.-born men. The study found no statistically significant relationship of PRWORA on employment for foreign-born women.

Earnings

  • The study found that PRWORA was associated with an increase in annual family income for noncitizen men.

Considerations for Interpreting the Findings

The study shows differences in employment rates between foreign-born and U.S.-born older men and women before the enactment of PRWORA, and it does not account for these existing differences in the study’s analyses. These differences in the groups could explain the study’s findings. In addition, foreign-born older men and older women might have changed their employment behavior in anticipation of the changes to Supplemental Security Income benefits under PRWORA.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the study does not demonstrate that the treatment and comparison groups are similar before the policy change. This means we are not confident that the estimated effects are attributable to PRWORA; other factors are likely to have contributed.

Reviewed by CLEAR

September 2019

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