Immigrants, Welfare Reform, and the Economy.

The welfare reform package that was adopted in the year 1996 restricted immigrant eligibility for some government transfer programs. In fact, it was estimated that 44 percent of savings that would be generated by reforms would come from reduced assistance to immigrants. Several subsequent studies find that program participation fell faster for immigrants when compared to natives after 1996, leading many to conclude that welfare reform may have placed a substantial burden on immigrants. Despite these findings, it is unclear whether the welfare reforms should have caused a significant reduction in government assistance for immigrants. Some policies that were adopted in 1996 were subsequently reversed at the federal level and others were superceded by changes in state policy. The welfare reform bill adopted in the United States in 1996 limited the eligibility of immigrants for several government assistance programs and early projections estimated that savings associated with these reforms would come from these immigrant restrictions. Conclusions of the study are in part driven by the fact that immigrants' employment and program participation fluctuates more closely with the business cycle. When the economy expanded by record levels in the mid to late 1990's, immigrants reaped large gains.