Elderly immigrants' labor supply response to supplemental security income

Abstract

This paper examined how the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, which banned Supplemental Security Income to the majority of elderly immigrants, affected their employment, retirement, and family incomes. The policy was found to be associated with a 3.5 percentage point (9.5 percent) increase in the employment and a 3.8 percentage point (7 percent) decrease in the retirement of foreign-born elderly men. Partly as a result of their employment response, SSI ineligibility and the consequent decline in SSI receipt did not have any statistically significant effects on the family incomes of elderly foreign-born men. Noncitizen elderly women, on the other hand, did not experience any increase in employment, and those without family support suffered a 10 to 17 percent decline in income. These findings suggest that access to SSI did not create work disincentives for noncitizen elderly women and that SSI restrictions have imposed financial hardship on those without any family support, many of whom perhaps cannot effectively increase their employment.

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