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(Article appears on the Personal Responsibility and Work Opportunity Act page)

Immigrant Welfare

A lesser known provision of the Personal Responsibility and Work Opportunity Act of 1996 (PRWORA) made immigrants entering the United States ineligible for federal welfare funds for five years after arriving in the United States. In light of the restrictions to federal funding under the law, states were allowed to grant aid out of their own funds to address the welfare needs of immigrants.

Benefit Programs

Two of the key policies under PRWORA are the inclusion of immigrants in Temporary Assistance for Needy Families (TANF) and Medicaid. In 2009, 22 states had extended TANF benefits and Medicaid to immigrants. Five states, California, Hawaii, Minnesota, New York, and Washington, provide assistance to some non qualified immigrants. Often times, these policies have had discriminatory effects towards minorities. Race has a strong negative correlation for TANF assistance granted to immigrants. States with large African American populations were more likely to exclude immigrants from the assistance program due to greater competition over welfare expenditures. In addition, the immigrant population has a positive correlation with the inclusion of Medicaid coverage considering the positive correlation between higher poverty and inclusion.

Costs to Inclusion

A large body of research examines the way that racial composition, welfare structure, and immigrant population determine how states include immigrants in welfare. Research shows that a larger percentage of African-American recipients leads to stricter rules governing initial eligibility, less flexibility in welfare work requirements, and lower cash benefits to welfare recipients. There is also a negative relationship between cash benefit levels and percentage of welfare recipients. In analyzing the effects of PRWORA, Hero and Preuhs find that the most inclusive states offer more assistance and welfare generosity to immigrants. These states, however, face challenges in allocating funds due to a larger minority population and cut individual benefit levels per recipient. Moreover, these states assess the costs for inclusion based on racial compositions in the state. In terms of TANF benefits, the most inclusive states have had the largest decline in benefit levels. For example, California has seen a 22.6% decrease in TANF benefit levels for a family of three.

Immigrant population density and states’ immigrant Medicaid eligibility rules interactively shape the native-foreign born Medicaid coverage gap. States with lower immigrant populations have negative and significant marginal effects on the native-foreign inequality in Medicaid coverage. Additionally, immigrant eligibility is conditional on the annual changes of states’ immigrant population density; where states with decreases in foreign-born population densities have negative effects on eligibility. Immigration brings states with exclusive Medicaid policies and a small immigrant population increases in the participation gap between native and foreign populations. In states with inclusive Medicaid policies and small immigrant population, immigration does not affect the participation gap. In states with a large immigrant population, immigration decreases social inequality regardless of the Medicaid policy. 

Addressing Concerns

Increases in descriptive representation for Latinos offsets the negative effects of Latino population size on social welfare policy. A minority voice in representative bodies acts a mechanism for interest representation and mitigates the effects of racial resentment. Regardless of incorporation, welfare effort and TANF benefits decline as the Latino population grows from a nominal size to 10 percent of the population. After that point, incorporation influences policy in a distinct manner. While incorporation is a function of population, it is not perfectly responsive considering the populations that would perceive benefits (i.e. population greater than 10%) only grew from five states in 1984 to ten in 2001. The remaining states exhibited negative relationships between Latino population and welfare generosity with legislative incorporation not overcoming this phenomenon. 

The last major reform effort of PRWORA was in 2002 when the Senate Finance Committee approved a bill to reauthorize legislation to restore some of the benefits stripped by the act. The bill reauthorized federal funds for for TANF and healthcare services. The House, however, failed to authorize the bill.