Center for American Progress

RELEASE: New CAP Report Shows How Immigration Reform Impacts Social Security
Press Release

RELEASE: New CAP Report Shows How Immigration Reform Impacts Social Security

For Immediate Release
June 14, 2013

Washington, D.C. — A new report released today by the Center for American Progress analyzes how legalizing the undocumented population would impact the Social Security system. Despite the wide body of research that details the economic gains that come with immigration reform, some lawmakers still question the long-term impact of earned legalization on social programs such as Social Security. The findings from this report are clear: If undocumented immigrants acquire legal status and citizenship, they will contribute far more to the Social Security system than they will take out and will strengthen the solvency of Social Security over the next 36 years.

The new CAP analysis finds that if 85 percent of the undocumented immigrants currently in the United States legalize and earn citizenship under S. 744, $1.2 trillion in Social Security taxes would be paid from the earnings of undocumented workers, while only $580.9 billion would be received in benefits. This leads to a net positive contribution of $606.4 billion over 36 years—enough money to fund the Social Security benefits of 2.4 million native-born workers.

This year the first of the Baby Boomers will turn 67 years old and be eligible to receive full Social Security benefits. Over the next 36 years, these Boomers will present a financial challenge to the Social Security system, which can be alleviated in part by the contributions of the relatively young undocumented immigrant population, whose adult mean age is only 36. While legal­ized immigrants will ultimately be eligible for Social Security upon retirement, the vast majority of them will not receive any benefits until the Baby Boomer generation—and the major strain on the system—has passed.

As the immigration debate moves forward, policymakers should keep in mind the eco­nomic benefits of providing an earned pathway toward legal status and citizenship for undocumented immigrants. If undocumented immigrants acquire this status, they will pay hundreds of billions of dollars more in Social Security taxes than they will receive in benefits over the next 36 years. These large net contributions will fund the retire­ment benefits of millions of Americans and a sizable share of retirees, decades before the majority of undocumented immigrants ever collect a penny in benefits.

Read the full analysis: Improving Lives, Strengthening Finances: The Benefits of Immigration Reform to Social Security by Adriana Kugler, Robert Lynch, and Patrick Oakford

To speak with an expert on this issue, contact Crystal Patterson at [email protected] or 202.478.6350.