Does immigration expand the welfare state by increasing the share of voters that benefit from government programs?  Or does immigration contract the welfare state by undermining voters’ sense of national identity?  Critics of the welfare state tend to think the former; fans tend to think the latter.  Who’s right?

The latest Cato working paper from my co-author Zachary Gochenour and my former student Alex Nowrasteh concludes that – at least in the United States – both sides are wrong.  Yes, most of the European evidence supports the view that immigration paves the way for austerity:

[I]ncreasing diversity could be a concern for the political supporters of the welfare states of Europe: in 2000, over 50 percent of the European population was concerned about immigrant abuse of the welfare, with those living in nations with higher social expenditures convinced that immigrants are more likely to abuse welfare [7]. A Norwegian survey about the political feasibility of introducing a minimum income found that 66 percent of Norwegians initially favored the scheme. However, merely mentioning that non-Norwegians residing in the country would receive the same benefits reduced support for the program to only 45 percent [5]. In Sweden, increased immigrant population share led to less support for redistribution among native Swedes according to surveys conducted every election year by the Swedish National Election Studies Program [12]. Furthermore, some authors have suggested that immigration has given new life to political parties that bundle anti-welfare policies with xenophobic policies [18]. [see the paper for cites]

If you look at the fifty United States, however, immigration has no detectable effect on TANF/AFCD, K-12 education, or Medicaid spending.  This is true for both per capita and total spending:

These findings are consistent and robust. No effect was found for immigrant population share or diversity on TANF benefits levels available per family of beneficiaries or the total spent on the program. Likewise, there was no effect for total or per-pupil K-12 spending or for total or per-capita Medicaid spending. Therefore, these findings lend no support to the idea that immigration or the resulting immigration driven increases in diversity is linked to higher public spending by any of these measures.

You might think the TANF result is driven by immigrants long eligibility lag, but that’s not it:

Limited TANF eligibility for immigrants could help explain the lack of native reaction to increased immigration and diversity. However, data from the GSS suggests that the median American thinks the government provides too much assistance to immigrants. In reality, the programs have stricter eligibility requirements than before: the Personal Responsibility and Work Opportunity Reconciliation (welfare reform) and Illegal Immigrant Reform and Immigrant Responsibility Acts (IIRIRA) of 1996 restricted non-citizen eligibility for TANF. Prior to 1996, non-citizens were generally eligible for the same welfare benefits as citizens but welfare reform and the IIRIRA barred TANF for new immigrants for five years after their entry. After the five year bar, states were allowed discretion in allowing non-citizens access to TANF. As of 2010, 34 states and Washington, D.C. allowed lawful permanent residents who have been in the U.S. for more than five years to draw on TANF. Many states restored portions of the welfare benefits limited by welfare reform. Because of these laws and a diminishing poverty rate among immigrants, 4 percent of immigrants were using TANF in 1995 but only 1 percent were in 2009 [36]. [see the paper for cites]

What’s going on?  The simplest story is that immigration has two roughly offsetting political effects: Although immigrant voters are a little more pro-welfare state, their very presence makes native voters a little more anti-welfare state.  Gochenour-Nowrasteh explore other stories at the end of the paper.  Read the whole thing.

P.S. If your economics or public policy department wants to hire an excellent assistant professor, Gochenour is on the market this year.