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20 years on, here’s how welfare reform held back immigrants’ children — in some states

Twenty years ago today, President Bill Clinton signed into law the Personal Responsibility and Work Opportunity Reauthorization Act, promising famously to “end welfare as we know it.” The goal was to ease poor people away from depending on government and encourage them to work instead.

The main achievement of “welfare reform,” as it was better known, was to end the program called Aid to Families with Dependent Children (AFDC) and replace it with Temporary Assistance to Needy Families (TANF). AFDC entitled families below the poverty line to income support for so long as they remained poor. All states had to follow the same federal rules, even though the amount of support differed by state based on local economic conditions.

TANF was different. It offers support to poor families and their children for up to five years, but only if they could show that they’ve tried to find work. After five years, people are dropped from the program. States could change all these guidelines, within limits — kicking recipients off sooner or later, giving more or less in cash benefits, altering the work requirements, and adding more conditions such as being drug-free.

Caseloads dropped dramatically, although it’s not as clear whether poverty dropped as well. Much of the debate in the past 20 years has been over how to measure welfare reform’s overall effects. But because states had so much leeway in how to put TANF into place, welfare reform affected various racial and ethnic groups differently — in some cases, in ways that shored up racial and ethnic inequality.

Welfare reform was especially hard on ethnic groups with high proportions of immigrants

In new research, we show that legal immigrants — a group that includes large numbers of Latinos and Asians — were especially hurt by welfare reform. In particular, their children were less likely to graduate high school.

After 1996, many immigrants lost eligibility for benefits, because TANF removed federal subsidies during immigrants’ first five years  as legal permanent residents. (Undocumented immigrants were never eligible for these programs.)

A lot of the savings promised by welfare reform came from this exclusion. States were allowed to distribute TANF to immigrants during those years if they wished, but the money had to come from the state’s budget; by 2000, half the states were doing so.

Using data from the 2002 Educational Longitudinal Study, a study of more than 16,000 U.S. school students, one of us, Alexandra Filindra, worked with Cynthia Garcia Coll and David Blanding to explore  how these state-level welfare policies affected the children of immigrants. In states that granted TANF to low-income immigrants, graduation rates for children who had at least one foreign-born parent were 5.3 percentage points higher than those in states that excluded them.

Of course, that gap could be the result of other differences between the states aside from immigrant restrictions in welfare policy. So to check our findings, in a second study, we compared something slightly different.

Using data from the Current Population Survey, we looked more closely at how individuals’ chances of graduating changed over time, comparing the chance a young, low-income immigrant had of graduating from high school in the periods before (1994-1995) and after reform (2003-2004) in states that did, and did not, offer TANF to immigrants.

When we looked at individuals and their family’s eligibility, we found that in states that allowed low-income immigrants to receive benefits, non-citizen children’s chance of graduating grew faster than in the states that did not.

Unlike the first study, in which we included all children of immigrants regardless of their own citizenship status, thereby including some youths who were themselves eligible for benefits, in this study we focused on children who were foreign-born.

Our results were similar to those from the first study. Only low-income Latino and Asian youths were affected: children who live in immigrant households or in communities with high proportions of immigrants.

Take, for example, a newly arriving, low-income immigrant who would have been directly affected by ineligibility. That young person was 17 points less likely to graduate from high school if he or she lived in a state whose TANF program excluded new permanent residents than in a state that included new permanent residents.

The spillover effect: The exclusion for some immigrants hurt the high school graduation rates of even those who were eligible for TANF

What’s more, that state restriction affected not just the legal permanent resident children from low-income families who hadn’t been in the United States long enough to be eligible for TANF; it also affected those children who had been in the United States long enough to qualify for the program. Even for a low-income immigrant youth who had been in legal permanent residency status for more than five years and thus eligible for TANF, the probability of graduation was still eight points lower in states with the exclusion.

Social science calls that a spillover effect; it’s a common unintended consequence of policies that target immigrant groups.

These results aren’t linked to other differences between the two kinds of states, TANF-restrictive and TANF-inclusive. For example, the gap doesn’t appear to be due to other variations in state welfare laws, such as caps on how many children a family could cover, or time limits on receiving TANF.

We checked this by comparing different ethnic groups. All low-income youths in a state experience the general restrictions the state puts in place, but immigrant eligibility restrictions affect only immigrants and others in their families and communities. States’ decisions about immigrant eligibility had no effect on the graduation rates of low-income, native-born, black or white youths, who weren’t subject to the restriction and weren’t likely to experience spillover effects.

Why would these restrictions hurt immigrants’ children?

Why would being excluded from social welfare programs lead some children of immigrants to drop out of high school? There are a number of reasons. Without the income from TANF, parents may need to work longer hours, leaving kids unsupervised. Children may have to work to help their families, reducing the time and energy they have for school.

But beyond the material reasons are psychological effects of being treated as if you do — or don’t — belong. Developmental psychologists have argued that children’s behaviors and attitudes are shaped by social context. Being excluded from welfare may signal second-class status — and being included may signal that you are welcome. That may explain how those policies “spilled over” and affected even immigrant families who were not materially hurt by the welfare reform.

The long-term consequences of cutting holes in the safety net

Research has shown that high school graduation is key to adult success. It predicts future lifetime earnings, entanglement with the criminal justice system, divorce, disease, depression and suicide. Citizens without a high school degree are less likely to vote, follow politics or engage in the community — which means that political parties are less likely to pay attention to their interests and concerns.

Letting immigrants fall through the safety net means that many children are less prepared to be productive citizens and contribute to our civic life. And though our research focuses on legal permanent residents, undocumented immigrants and temporary migrants on work visas can never turn to the safety net — suggesting that their children are held back as well.

Finally, our research shows that this exclusion hurts not just the children whose families need help the most — it spills over throughout immigrant and ethnic communities, making the American dream inaccessible for many low-income Latinos and Asians, the fastest-growing groups of American children.

Alexandra Filindra is assistant professor of political science at the University of Illinois at Chicago.

Amber Wichowsky is assistant professor of political science at Marquette University.

Meghan Condon is assistant professor in the DePaul University School of Public Service.