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Immigration Reform and Social Security


Our View:  Immigration reform is not a threat to Social Security.

It is estimated that there are about 11 million undocumented workers in the United States today[1].  These immigrants come to our country to work.  They contribute to the economic health of our nation.  They also make substantial contributions to Social Security through the payroll tax, even though neither they nor their families are eligible to receive benefits.  The National Committee to Preserve Social Security and Medicare believes that bringing undocumented workers into our national family would be beneficial for the country and good for Social Security as well. 

Our guiding principle in evaluating immigration reform proposals can be summarized in a single word:  Fairness.  Rules of eligibility for benefit programs should be neither more favorable nor more disadvantageous for immigrants who benefit from comprehensive reform.  And contributions made by immigrants to Social Security’s earned-right benefits should, in time, lead to eligibility for benefits.

Comprehensive immigration reform is not a threat to Social Security.  By bringing undocumented workers out of the shadows of our economy and into its mainstream, immigration reform has the potential to strengthen Social Security and accelerate overall economic growth.

Immigrants and Social Security

Contrary to claims that legalizing undocumented immigrants would damage Social Security, well-crafted and comprehensive reform should not threaten Social Security’s solvency.  In fact, estimates of the effect of S. 744, the “Border Security, Economic Opportunity, and Immigration Modernization Act of 2013,” indicated that this comprehensive immigration reform bill would have increased the asset reserves of the Social Security Trust Funds by $284 billion over 10 years, would have extended Social Security’s solvency by an additional 2 years, and would have reduced the program’s actuarial deficit by 0.21 percent of payroll over 75 years.[2] The Chief Actuary of the Social Security Administration (SSA) has reported that unauthorized immigrants and their employers were, as of 2010, making net contributions of about $12 billion a year to Social Security.[3] Moreover, undocumented immigrants have added an estimated $300 billion over the years to the Social Security trust funds.[4]

These estimates are consistent with earlier evaluations of the effects of comprehensive immigration.  In 2007, the Congressional Budget Office (CBO) estimated that granting permanent status would generate $57 billion in additional revenue over a decade.  As legal status is granted to current undocumented workers so they can participate openly in the broader economy, contributions will increase.  CBO estimated that reform would increase the growth of the economy by as much as 1.3 percent.[5]  At that time, Mr. Stephen C. Goss, Chief Actuary at SSA, reported to the U.S. Senate that “Provisions that will increase net immigration tend to improve the financial status of the [Social Security] program both because of the immigrants themselves and their children.  The effect is much like the effect of increased birth rates, which also have positive effects on the financial status of the program.”[6]

Edward Alden of the Council on Foreign Relations has said that immigration reform would actually lead to higher wages and allow immigrants to pay more into Social Security.  “You have people who are often working in very low wage jobs because they’re uncertain about their status.  They’re scared.  So these people generally, the analysis shows their wages will go up.  They’re going to pay more into the Social Security system.  The CBO has run these numbers in the past.  In the short run there’s a big boost for the Social Security system.”[7]

The National Council on Aging also notes the demographic makeup of immigrant families and the positive role it plays in strengthening Social Security.[8]  The immigrant population, in particular undocumented workers, is very young.  In fact, 59 percent are between 25 and 44 years of age.  History has shown that their children, as legal second-generation Americans, would make measurable contributions to our nation and economy.  A Pew research study of the 20 million adult U.S.-born children of immigrants shows that these adult children have median incomes and homeownership rates similar to the general U.S. population.  In fact, second-generation adult children of immigrants have lower poverty rates and higher college graduation rates.[9] All of these demographic factors are potentially good—not bad—news for Social Security.

When comprehensive immigration reform moves again, the legislation must address the Social Security-related issues that are associated with it.  While not an all-inclusive list, these are some provisions which the National Committee believes should be addressed:

Access to Social Security Benefits

Immigrants who are authorized to work under comprehensive immigration reform should have access to Social Security benefits under the same terms and conditions that apply to others who apply for benefits.  There should be no limit placed on the consideration of an immigrant’s wages in determining benefit eligibility by excluding wages and other earnings that were received by an immigrant prior to the granting of lawful presence.  This issue is especially important for older immigrants and the disabled, who might not qualify for benefits if the earnings they received prior to work authorization were to be excluded in determining eligibility for Social Security.

Mandatory Use of E-Verify

While the National Committee recognizes the need for a secure, reliable and accurate electronic method of verifying employees’ work authorization, we are concerned about mandating the use of E-Verify by all employers.  Because of the program’s database error rates, weak worker protections, and significant employer abuse of the system, E-Verify needs to be strengthened before it should be used mandatorily by all employers.  It should be noted, however, that E-Verify is principally a means of enforcing work authorization rules and is not directly related to the administration of Social Security.  Therefore, we believe the cost of improving E-Verify should be borne by the general fund of the federal government rather than by the Social Security trust funds.

Federal Identification Documents for all Workers

Some proponents of comprehensive immigration reform would require the use of a universally-required work identification document while others propose a form of biometric identification document or Social Security card.  The establishment of such a system would be very costly, with estimates ranging to as much as $21 billion initially with annual costs of about $2 billion.  These new costs appear to be more related to the enforcement of work authorization rules rather than the administration of Social Security and should be borne by the general fund of the treasury rather than by the Social Security trust funds.


The legalization of undocumented immigrant workers would affect both sides of the Social Security ledger by bringing in more revenue from work-authorized immigrants and by paying more in benefits when they become eligible.  However, research has shown that comprehensive immigration reform would not be a threat to Social Security’s long-term financial outlook.  In fact, as the analysis of the Social Security Actuary has demonstrated, the net result will be to significantly improve Social Security’s solvency.

Government Relations & Policy, August 2016

[1] Letter dated May 8, 2013, from Stephen C. Goss, Chief Actuary, SSA, to Senator Marco Rubio.

[2] Letter dated June 28, 2013, from Stephen C. Goss, Chief Actuary, SSA, to Senator Marco Rubio.

[3] Actuarial Note 151, “Effects of Unauthorized Immigration on the Actuarial Status of the Social Security Trust Funds,” dated April 2013, by Stephen Goss, Alice Wade, J. Patrick Skirvin, Michael Morris, K. Mark Bye, and Danielle Huston.  SSA Office of the Chief Actuary, p. 3.

[4] “Do Illegal Immigrants Actually Hurt the U.S. Economy?”  New York Times, February 12, 2013.

[5] “The Budgetary Impact of Current and Proposed Border Security and Immigration Policies,” Statement of Paul R. Cullinan, CBO, before the Committee on the Budget, United States Senate, August 30, 2006.

[6] Quoted in Paul N. Van de Water, “Immigration and Social Security,” Center on Budget and Policy Priorities, November 2008.

[7] Edward Alden, Council on Foreign Relations, “Immigration Reform Could Cost Social Security Billions,” Yahoo Finance, March 2013.

[8] “Immigration Reform:  Key Issues for Older Adults and People with Disabilities,” National Council on Aging, March 2013.

[9] “Second Generation Americans:  A Portrait of the Adult Children of Immigrants,” Pew Research Center, February 2013.

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