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Coronavirus’ Disproportionate Economic Impacts on Immigrants

By , and ·June 17, 2020
University of Colorado Denver, University of California, Berkeley and Williams College

The Issue:

Unemployment has risen dramatically in the wake of COVID-19. The adverse labor market effects of the virus are disproportionately experienced by minority groups including Hispanics and Blacks. Immigrants (people born outside of the United States) may face particular hardship because they are more likely to work in affected occupations. Labor market distress among non-citizen immigrants is of particular concern because, unlike immigrants who have become citizens through naturalization, non-citizen immigrants are frequently excluded from safety net programs, and many are ineligible for emergency benefits under the CARES Act. Indeed, the early evidence on measures of economic hardship show particular vulnerability among non-citizens compared to citizens.

Many U.S. citizen children of immigrants are being left out of the safety net at a time when they disproportionately need assistance.

The Facts:

  • 40 million foreign-born people live in the U.S., and foreign-born workers made up 17% of the U.S. labor force in 2017. 25 million immigrants are non-citizens, and, of those, 10.5 million are estimated to be unauthorized. Additionally, many children live in mixed-status households: 11 million U.S. citizen children have at least one non-citizen parent. And an estimated 5 million U.S.-born children have at least one unauthorized parent. 
  • The economic shock resulting from COVID-19 is impacting non-citizen immigrants harder than citizens. The unemployment rate in the U.S. increased by 11.2 percentage points between February and April 2020: from 3.5 percent to 14.7 percent, according to the Bureau of Labor Statistics (BLS). Our analysis of working age adults using the BLS data finds the jump in the unemployment rate to be 13.4 percentage points for non-citizens, 3.2 percentage points more than the increase for citizens. There was also a 2.5 percentage point larger reduction in the labor force participation rate for non-citizens than citizens (see chart).
  • The social safety net provides front line assistance in times of job loss and economic shocks. However, access to safety net programs is limited for some non-citizen immigrants and the U.S. programs do not provide benefits for unauthorized immigrants. Unemployment insurance (UI) is the most important program to provide income protection against job loss. Though legal permanent residents are eligible for UI, unauthorized workers are not, and are therefore uninsured against job loss. The means-tested social safety net also provides income protection for families and individuals experiencing economic hardship, notably through the Supplemental Nutrition Assistance program (also known as SNAP or Food Stamps). However, unauthorized immigrants are ineligible for almost all benefit programs including SNAP. Also, in many states, authorized immigrants are ineligible for SNAP and other assistance during their first five years in the country.
  • Additionally, eligible non-citizens participate in means-tested social assistance programs at lower rates than eligible citizens. For example, 62% of non-citizens who are eligible for Food Stamps participate, relative to 80% of eligible citizens. One explanation for this lower participation rate is “chilling effects”: fear of participation in public programs among immigrant communities. This reluctance to interact with government agencies has likely been magnified by the administration’s 2019 “public charge rule” discouraging immigrant use of public programs by expanding the criteria under which participation in safety-net programs counts as a negative factor in immigration status decisions.
  • Nationally representative data from before the pandemic show the disparities in non-citizens’ access to precisely the social safety net programs that are central in assisting Americans at this time (see chart). According to our estimates using data from the Census Current Population Survey, in 2018 unemployed non-citizens were 6 percentage points less likely to receive unemployment insurance than unemployed citizens. Among low-income households (total income below 185% of the poverty line), we estimate that households with a non-citizen head of household were 14 percentage points less likely to receive Food Stamps than those with a citizen head of household. This gap increases slightly to 17 percentage points when comparing households with children. 
  • The relief packages passed by Congress to date provide some important unemployment insurance expansions and relief payments, but these too are not equally accessible across immigrant and U.S.-born people. The additional UI payments of $600 per week as part of the CARES Act are only available to immigrants who are authorized to work in the U.S. In addition, the relief payments established under the CARES act cannot go to anyone who listed a spouse or dependent without a valid Social Security Number on their tax form, even if they are themselves a U.S. citizen. Similarly, U.S. citizen children are not eligible for these benefits if their parents do not have valid Social Security Numbers. Finally, the optional state expansions to SNAP under the Families First Act, that increase benefit amounts and make benefit receipt easier, are only available to authorized immigrants after the five year residence requirement and are not available to unauthorized immigrants.
  • Early evidence shows high levels of economic hardship. Data from week 2 of the COVID Impact Survey reports that 22 percent of respondents were food insecure. A family is categorized as food insecure in the COVID Impact Survey if they respond "often or sometimes true" to the statement that “We worried our food would run out before we got money to buy more” over the past 30 days. Though immigrant status is unknown in the survey, some information can be gleaned from the questions about ethnicity. 33.9 percent of Hispanics were food insecure compared to 14.4 percent among Whites; and the growth in food insecurity between 2016 and 2020 was 18% larger for Hispanics than Whites. Among families with children, 44.3 percent of Hispanics reported food insecurity. Additionally, the Urban Institute found that in March and April of 2020, families with at least one non-citizen member were roughly 14 percentage points more likely to experience any material hardship (“problems paying the rent or mortgage, problems paying utility bills, food insecurity, or unmet needs for medical care”) than families with all citizens.
  • Research suggests that early life access to the safety net improves children’s long-run health and economic outcomes. For example, early life access to Food Stamps improves children’s health at school age and improves their health and economic outcomes as adults. Many U.S. citizen children of immigrants are being left out of the safety net at a time when they disproportionately need assistance, and this is likely to have detrimental effects on health care costs and economic productivity for years to come.
  • Some states are responding where the federal government is not. California is offering a $75-million fund for unauthorized adults who are not eligible for other forms of government assistance; a qualifying undocumented adult can receive $500, with a maximum of $1,000 per household.

What this Means:

The COVID-19 job losses are particularly large among non-citizens – whose unemployment rate stood at 17.7 percent as of April 2020. Non-citizens are particularly vulnerable at this time because they have limited access to social safety net protections. Unauthorized individuals, estimated at 10.5 million in the U.S., do not have access to unemployment insurance. The CARES act relief payments of $1,200 for singles and $2,400 for married couples are unavailable to unauthorized immigrants, their spouses and their children. Many authorized immigrants, as well as unauthorized immigrants, are excluded from the SNAP program, which provides critical assistance toward meeting food needs. In states that do not fill in the gaps, there will likely be long run consequences for non-citizens, their children, and the broader economy.

Topics:

Coronavirus / Immigration Policy / Unauthorized Immigration
Written by The EconoFact Network. To contact with any questions or comments, please email [email protected].
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