Related BLS programs | Related articles
April 2003, Vol. 126, No.4
Immigration and poverty: how are they linked?
Jeff Chapman and Jared Bernstein
Recently released data from the 2000 census show that the Nation’s poverty rate fell less than 1 percentage point, from 13.1 percent to 12.4 percent, between 1989 and 1999.1 In some States, including California and New York, the poverty rate was higher in 1999 than in 1989. In addition, some areas of the country posted only small increases in real median family income, even given the strong economy of the latter 1990s. For example, census data reveal that median annual family income in New York grew only $113 (0.2 percent) in real terms over the decade.
Media coverage has attributed the findings regarding poverty chiefly to the effects of a growing immigrant population composed of many low-income families.2 The idea is that, because the immigrant share of the population increased from 1989 to 1999, and because immigrants’ incomes are, on average, lower than natives’, overall income growth was subject to a downward pressure over the decade, a phenomenon referred to in this article as the share effect. The question, however, is whether the share effect does in fact implicate immigration as the sole, or even the most important, factor behind the census figures. Without more evidence, the role of immigration in what are essentially flat poverty statistics remains open.
The needed evidence is at least twofold. First, the magnitude of the share effect must be quantified; that is, how much did the increase in the share of the immigrant population lower real income or raise the poverty rate? Second, the impact of the share effect can be offset by trends in immigrants’ own income and poverty status, herein called the income effect. Thus, analysts need to quantify this effect as well, to learn whether and by how much it contributed to changes in real income or the poverty rate.
This excerpt is from an article published in the April 2003 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
Read abstract Download full article in PDF (42K)
1 Because the poverty rate tends to rise during recessions and fall during expansions, it is desirable to compare poverty rates at similar points in the business cycle. Fortunately, the years covered by the 2000 census began with one peak and ended in a near peak. (The 1990s recovery went through 2000). The official source for year-to-year estimates of poverty and income is the March Current Population Survey (CPS), the main data source in this article. According to the CPS, the U.S. poverty rate grew from 12.8 percent in 1989 to 15.1 percent in 1993 and then fell to 11.8 percent in 1999.
2 See, for example, Janny Scott, "Census Finds Immigrants Lower City ’s Income," The New York Times, Aug. 6, 2002; and "Census Finds Rising Tides, Many Who Missed Boat," The New York Times, June 17, 2002. See also "’90s Boom Had Broad Impact; 2000 Census Cites Income Growth Among Poor, Upper Middle Class," The Washington Post June 5, 2000.
Related BLS programs
Labor Force Statistics from the Current Population Survey
The role of foreign-born workers in the U. S. economy—May 2002.
Immigration and wage changes of high school dropouts—Oct. 1997.
How do immigrants fare in the U.S. labor market?—Dec. 1992.
Within Monthly Labor Review Online:
Welcome | Current Issue | Index | Subscribe | Archives
Exit Monthly Labor Review Online:
BLS Home | Publications & Research Papers