How Immigration Can Help Save Social Security
Policy + Politics

How Immigration Can Help Save Social Security

© Hyungwon Kang / Reuters

The Bipartisan Policy Center issued a new white paper Tuesday that details one crucial twist to the ongoing immigration debate.

Authors Kenneth Morgan and Theresa Cardinal Brown write that immigration can help boost the solvency of the Social Security Trust Fund:

“The logic is simple: Immigrants tend to be of working age when they move to the United States. Furthermore, research indicates that foreign-born individuals are more likely to be employed than their native-born counterparts, as native-born individuals tend to have more flexibility to enter retirement, enroll in school, or enter disability. More people working and paying into the Social Security system decreases the old-age dependency ratio, which extends trust-fund solvency.”

The report also notes that undocumented immigrants may help trust fund solvency, too.

“The rules of the Social Security program stipulate that workers must have at least 40 quarters of covered earnings to qualify for benefits—that is, workers must pay Social Security payroll taxes for 40 quarters before becoming eligible. Because undocumented immigrants are not eligible to collect Social Security, many pay into the system but are unable to collect the benefits associated with those payments. In 2010, $12 billion more was collected from undocumented workers’ payroll taxes than were paid out in benefits, according to estimates from the SSA.”

The authors note that immigration alone won’t solve the long-term problem of Social Security solvency, but it can help boost economic growth and mitigate some of the demographic challenges created by an aging population and declining domestic birth rates.