Number 7, October 2004



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Welfare Reform Reduced Public Coverage, Increased Employer Coverage Among Immigrants

THE PROBLEM
Eight years after passage of the 1996 federal welfare reform law, researchers and policymakers still debate the effects of the legislation. Cuts in benefits for immigrants were part of the changes to the welfare system, raising concerns that already high rates of uninsurance among immigrants could soar. New research shows that, contrary to conventional wisdom, moving welfare recipients off the public assistance rolls did not necessarily leave immigrants without health insurance coverage. While welfare reform reduced the level of Medicaid coverage for immigrants as a whole, many were able to obtain employer-sponsored coverage (ESI). Residents in states with less generous public assistance benefits were significantly more likely to have ESI than immigrants living in states that offered more generous aid.
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From Catherine McLaughlin, Ph.D., Professor at the University of Michigan and Director of ERIU
"Borjas' findings convincingly show that, as a group, immigrants experienced large increases in employer-sponsored insurance (ESI) coverage after welfare reform. What is not clear is whether the immigrants affected most by the cuts in Medicaid were the same groups benefiting from expanded ESI. To identify the "winners and losers" affected by welfare reform, ERIU used the same dataset and methods to analyze coverage changes for specific subgroups of immigrants."
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GET THE FACTS ON THE RELATIONSHIP BETWEEN WELFARE REFORM AND EMPLOYER-SPONSORED HEALTH INSURANCE COVERAGE FOR IMMIGRANTS
  • How much more are immigrants likely to be uninsured than natives?
  • How does the proportion of immigrants losing Medicaid coverage compare to the proportion gaining job-based coverage?
  • How did reforms influence labor force participation among immigrants?

Q & A WITH GEORGE BORJAS, Ph.D.,
Read more about why George Borjas, who authored the paper "Welfare Reform, Labor Supply, and Health Insurance in the Immigrant Population" for ERIU, believes that the combined effects of state and federal welfare reforms increased rates of job-based coverage for many immigrants. Dr. Borjas is a Professor of Economics and Social Policy at Harvard University's John F. Kennedy School of Government.
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STAY TUNED

The next Research Highlight will explore how Wisconsin's SCHIP program influenced coverage for low income single mothers leaving welfare for work.

Full Borjas Research Highlight in PDF format

Full Borjas Research Highlight in HTML format

Full interview and other ERIU Research Highlights

Summary of findings, data, and methods

ERIU Working Paper #16 (Adobe PDF)

Funded by The Robert Wood Johnson Foundation, The Economic Research Initiative on the Uninsured (ERIU) at the University of Michigan is a three-year program shedding new light on the causes and consequences of lack of coverage, and the crucial role that health insurance plays in shaping the U.S. labor market. ERIU's goal is to diversify the pool of experts who study health insurance coverage trends to bring a much-needed perspective to this field of research.

This Research Highlight is the seventh in a series of research-based policy documents that will address current questions and issues related to the health care coverage debate.