JSIT19-04: Financial Security and Immigrants’ Legal Status: An Analysis of Net Worth in the United States

Abstract

Older immigrant adults and racial ethnic minorities are more likely to be financially insecure and live in poverty compared to their U.S. born counterparts. Undocumented immigrants, in particular, may have fewer financial resources and fewer opportunities to accumulate wealth compared with U.S. citizens and legal immigrants throughout their life. They earn less than individuals with a legal presence and have little to no access to social insurance programs. They likely lack financial security when they enter retirement age. And yet, we know very little about the wealth holdings of immigrant populations and the role of legal status (whether someone is undocumented, a legal resident or a U.S. citizen) on wealth accumulation. The consequences of legal status on financial security require attention because a substantial proportion of the undocumented population will enter retirement age in the next few decades. To date, studies about the impact of a documented or undocumented legal status have overlooked the fact that immigrants are aging in the United States. Understanding the financial security profiles of individuals with different legal statuses can inform discussions about the consequences of exclusion from social insurance in older age. This project uses multiple waves of the Survey of Income and Program Participation (SIPP) to document the financial security of U.S. citizens, legal immigrants, and undocumented individuals across the life course.

This study will analyze the wealth holdings of foreign-born adults over the age of 25 by conducting a decomposition analysis of wealth. Using data from the SIPP, which is uniquely suited to examine differences in wealth using an imputed immigration status measure, the following research questions will be explored: Are there differences in wealth accumulation among pre-retirement aged undocumented immigrants, legal immigrants, and U.S. born adults (ages 25-62)? How does wealth vary by legal status among older adults (ages 62+)? To what extent does legal status explain differences in wealth accumulation over the life course for immigrants residing in the United States?