Ah you missed me!?.........I'm flattered
.....here it goes, but only because you asked so nicely.
Large Tax Contributions Made by Illegal Immigrants
By Sarah Hayne Date: 4/19/2001
On April 15, 2001, the Washington Post ran an article discussing the magnitude of the tax contributions made by illegal immigrants to the United States. The article points to several indicators showing that the total tax contributions made by these undocumented immigrants has been increasing in recent years, up to several billion dollars in 1998.
While no government agency specifically tracks the taxes paid by these immigrants there are several ways that their contributions can be measured indirectly. The Social Security Administration keeps a file holding all of the contributions made by individuals whose name and social security number do not match. Both the number of forms added to this file and the total value contributed have increased between 1990 and 1998. While not all of the entries in the file are due to illegal immigration, the article estimated that a significant portion are.
Because the Social Security Agency, like many governmental agencies, is legally obligated to protect the privacy of individuals' contributions to the fund, the INS is not able to use this information to catch illegal immigrants. As is the case with social security contributions, many of the taxes paid by illegal immigrants come in the form of automatic paycheck deductions. The major difference is that many illegal immigrants are afraid to attempt to receive a refund if too much money is deducted, because they fear being caught by the INS.
In addition to income taxes these individuals also pay the same property and sales taxes as all Americans, further increasing the amount of taxes paid.
Contextualizing Proposition 187: Macroeconomic Conditions and a Case Study of a Southern California Hospital
Vanessa Marzan Deza
Faculty Mentor: Professor Paul A. Ruud
"It scratches hard, and it scratches very well... But it scratches where there isn't any itch."
--Eduardo Galeano, Book of Embraces
California is a petri dish of rapidly changing demographics, often viewed by the rest of the nation as a site for many controversial and experimental forms of social, political, and economic activities. The passage of the controversial Proposition 187 has already set a precedent for other states. Several bills modeled after Proposition 187 have been drafted at the federal level. This project attempts to address timely and often politically charged questions: Is Proposition 187 effective? Is it the best answer to a web of complex issues? What are its ramifications?
The patterns of migration into the state have simultaneously shaped California's economy and been influenced by it. I will attempt to form causal/associative relations among the following factors: macroeconomic conditions in California and countries of origin, the annual reported number of apprehended undocumented immigrants, and the passage of Proposition 187. At the heart of this project is a case study of a Southern California hospital that serves a predominantly Latino population. By looking at how emergency room usage changes pre- and post-Proposition 187 for different groups of patients, we can assess the effectiveness and flaws of Proposition 187.
Background: Concepts and Strategies
There has been a steady increase in the flow of undocumented immigrants into California over the years. Macroeconomic conditions and unstable political climates have served as "push factors" from the top three countries of origin: Mexico, El Salvador, and Guatemala. The promise of jobs and a higher standard of living, as well as the historical ties in the labor supply and demand between California and Latin countries, especially Mexico, [the "Bracero Program"] have generally served as "pull factors."
California's economy has been in recession since the early 1990s and has only recently experienced a modest upswing. The continuing flow of immigrants into the state, both legal and undocumented, has put certain pressures on local and state levels. It therefore comes as no surprise that the supporters of Proposition 187 have identified undocumented immigrants as the root cause of many of California's economic woes. This does not take into consideration other significant economic factors such as the general trend of lower worker productivity, rapid technological advances that have changed the demands for labor skills in the job market, the end of the Cold War and closing down of bases, and the globalization of capital investment.
An article in The Nation goes even further and suggests that "migrant labor has become a key feature of the 'modernizing' U.S. economy."
...with U.S. unemployment hovering officially around seven percent, the hiring of undocumented immigrants continues unabated...The main explanation for the deepening dependence on Mexican immigrant work force is globalization...[which] puts a competitive premium on pools of low paid, 'flexible,' vulnerable workers.
Proposition 187 enumerates in its "Findings and Declarations" these key points: Californians are suffering economic hardships, personal injury, and damage due to the presence and criminal conduct of "illegal aliens" in the state; citizens and legal residents are entitled to protection from their government against persons entering the country unlawfully; and a system of required notification among local, state, and federal agencies will thwart illegal aliens from receiving benefits and public services from the state of California.
This project has detailed data, primarily addressing health care. Proposition 187 states that, "excepting medical emergency medical care as required by federal law, only citizens of the United States and aliens lawfully admitted to the United States may receive the benefits of publicly-funded health care." A public health care facility is expected to deny service to and report any suspected undocumented immigrant. This is why we are looking at the emergency room data of a privately-owned hospital in this study.
Proposition 187 is deemed by its authors as an effective way to address the "problem" of undocumented immigration. The cost to taxpayers, the refusal to "medicate, incarcerate, educate and compensate undocumented immigrants" and the federal government's lack of initiative in curbing the flow are some of the more common anecdotal assessments given of the "illegal" immigration problem. The Proposition itself does nothing to beef up border security and crack down on employers who hire undocumented immigrants.
We are not attempting to construct a cost/benefit analysis of undocumented immigration in this project. Other studies have admitted the difficulty of making this assessment, but their projections and estimates are nonetheless cited by those who argue the pros and cons of Proposition 187. The United States General Accounting Office has undertaken a comparative look at the state of California's June and September 1994 cost estimates and the Urban Institute's Fiscal Impacts study. It concedes that:
the limited data available to support the studies' assumptions precluded us from judging the reasonableness of their revenue estimates, which varied considerably. For example, the studies estimate of state and local revenues from illegal aliens in California ranged from $500 million to $1.4 billion.
Los Angeles County has published its own study which asserts that "undocumented aliens greatly exceed their total cost to the country, but most revenue are received by Federal and State governments." A closer look in its methodology shows that these "estimates are not based on actual data, but instead, on a series of assumptions which rely heavily on published studies related to undocumented aliens."
In our study, we are trying to take a holistic view of what other factors determine undocumented immigration. Due to the lack of data, we cannot state any definite causal relations between the macroeconomic conditions in the sending countries and California and the number of apprehended undocumented immigrants. However we will use the data we do have on these factors to frame the core question of the project: what can we say about patients who use the emergency room pre- and post- Proposition 187? Can we see any changes in the behavior of both the targeted population and those not explicitly threatened by Proposition 187? What about the costs of use of emergency room facilities by these different groups of people?
Using data from a real emergency room facility is a powerful way of obtaining tangible counts and percentages of undocumented immigrants. In its use of actual subjects, our study is comparable to a Rand Institute survey in which, "over a five week survey period from August to September 1991, a team of bilingual interviewers completed interviews with 655 respondents, including 382 Salvadorans and 273 Filipinos." The survey was able to document the immigration status, employment experience, public and social service needs, etc. of its sample population.
Unlike many other studies that can only approximate and make projections on the undocumented immigrant population, we have actual medical records of real people. From a pool of approximately 13,000+, we randomly selected over 400 patients. This sample population will hopefully shed some light into actual usage and costs.
Assuming that Proposition 187 is motivated by the desire of its authors and supporters to curtail migration patterns, we will assess its internal logic and find evidence that its stated purpose will indeed impact its targeted population. What is being denied? Can we measure it? How will Prop 187 deny the targeted population and how does this particular mechanism affect other groups?
One of the implicit assumptions in Proposition 187 is that people migrate to California to take advantage of the health, welfare, and educational benefits. I will assess if this is indeed a strong "pull factor." What the labor demands of California have to do with attracting world migrations into the state? Are the benefits identified by Proposition 187 a stronger pull than macroeconomic conditions in the state? We will run a regression using the 1990-1995 unemployment rates of the city of Los Angeles. We will also analyze the macroeconomic conditions of the sending countries.
Macroeconomic Conditions in Countries of Origin
This section looks at the macroeconomic conditions of countries from which the greatest number of undocumented immigrants originate. According to the "Estimates of the Resident Illegal Alien Population: October 1992," the countries which send the greatest number include Mexico, El Salvador, and Guatemala. Both El Salvador and Guatemala are considered "lower-middle-income" economies, while Mexico is in the "upper-middle-income" range.
Mexico's total real Gross Domestic Product has been decreasing from 1990-93. Also, "political events in the first quarter of 1994 encouraged capital flight, which led to depreciation of the peso and a jump in interest rates." This is indicative of shrinking employment and economic opportunities which may serve as push factors for its native populace. Although total Real GDP has been climbing for both El Salvador and Guatemala, turbulent political conditions in these countries may account for the surge of emigration. Indeed, employment opportunities in El Salvador are not so bleak. "Formal sector employment as measured by social security coverage edged up by 2.9 percent in 1993, with all the growth in private employment. Public sector employment was down 2.1 percent, reflecting continued retrenchment efforts." Despite this modest growth, the Rand Institute study determined that political instability was a major factor for Salvadoran emigration. Salvadorans cited economic opportunities and fear for personal safety as predominant reasons for coming to the US.
Similarly, political instability in Guatemala did not dampen the growth in real GDP. "In 1993, Guatemala's gross domestic product (GDP) grew at a rate of 4 percent, which represents a 1 percent increase in per capita GDP. This occurred despite the political crisis that began in May with the collapse of constitutional order and continued with the confrontation between the three branches of government in the latter half of the year." However, looking at the growing number of apprehended undocumented immigrants from Guatemala, we have to wonder how accurate an indicator of general economic well-being this growth in real GDP is.
TOTAL REAL GDP
(Average annual growth rate)
COUNTRY 1990 1991 1992 1993 1994
Mexico 4.4 3.6 2.8 0.4 NA
El 3.4 3.5 5.1 5.0 NA
Guatemal 3.1 3.7 4.8 4.0 NA
Source: Inter-American Development Bank, Economic and Social Progress in Latin America (Washington, DC.: John Hopkins University Press, 1994).
For the top three countries of origin, GNP per capita has shown a negative or zero percent growth. This is a good indicator of the future earning expectations and standard of living of its citizens. Meanwhile, the rate of inflation has increased steadily for all three countries, putting pressure on price levels and wages.
Country GNP per Capita Average Inflation Rate
(Ave. annual 1980-1992
Mexico -0.2 62.4
El Salvador 0.0 17.2
Guatemala -1.5 16.5
Source: International Bank, World Development Report 1994 (Washington, D.C.: Oxford University Press, 1994).
There is also a high growth rate in both the population and labor force participation for all three countries. The average annual growth rate of the population from 1980-92 was 2.0 percent for Mexico, 1.4 percent for El Salvador and 2.9 percent for Guatemala. The projection for 1992-2000 is 1.9 percent for Mexico, 1.7 percent for El Salvador and 2.8 percent for Guatemala.
The average annual growth rate for the labor force from 1980-92 was as follows: Mexico--3.1 percent, El Salvador--3.1 percent, and Guatemala--3.0 percent. The projected growth for 1992-2000 reveals a small decrease of 2.7 percent for Mexico, 3.1 percent for El Salvador, and an increase of 3.3 percent for Guatemala. Coupled with a positive population growth for all three nations, these labor force growth rates serve as pressure for job creation and infrastructure-building in Mexico, Guatemala, and El Salvador. Given the sluggish economic growth of these countries, it is doubtful whether the projected growth in the population and the labor force will be accommodated by equal growth in employment opportunities.
These "push factors" can give us an idea of the forces that play into both legal and illegal migration. "Economists generally see migration as an investment in human capital, which is based upon the costs and returns to the emigrants." If opportunities in the home countries yield a relatively smaller rate of return, emigration in search of higher standards of living apparently ensues.
Approximating the Flow of Undocumented Immigration
Since estimates given by other studies of the number of undocumented residents living in California are questionable at best, we chose to look at the actual recorded apprehensions of undocumented immigrants to give a more concrete picture of the type of pressure being posed by people "illegally" crossing the nation's ports of entry.
Goering asserts the importance of analyzing INS apprehension data in particular:
Despite the fact that those who are apprehended are not necessarily representative of the total flow of undocumented persons into the United States, such information has proven to be indispensable in estimating current flow.
Over the years, the flow of undocumented immigrants from all countries have been steadily increasing. Compared to other nations, the greatest number of undocumented immigrants come from Mexico, El Salvador and Guatemala .
DEPORTABLE ALIENS LOCATED BY
SELECTED COUNTRY OF
NATIONALITY. FISCAL YEARS 1990-1993.
1990 1991 1992 1993
1,169,939 1,197,875 1,258,482 1,327,259
ENTRY W/O 1,131,454 1,161,495 1,225,933 1,294,256
1,092,258 1,131,510 1,205,817 1,269,294
ENTRY W/O 1,080,699 1,120,099 1,193,455 1,258,009
16,953 10,924 7,433 7,820
ENTRY W/O 16,611 10,687 7,167 7,531
9,707 6,676 5,614 6,696
ENTRY W/O 9,252 6,391 5,377 6,419
Source: United States Immigration and Naturalization Service, Statistical Yearbook of the INS, 1990-93. (Note: of Entry + # of Immigrants [not shown]= All Located)
Although El Salvador and Guatemala show lower numbers in 1991 and 1992, they still top the list for sending some of the greatest numbers of undocumented immigrants in general. The number of "deportable aliens" for the two countries also increased in 1993.
Mexico, on the other hand, has shown a steady rise in sending its share of undocumented immigrants. Taking into consideration its greater population size and closer proximity to the US, Mexicans comprised 93.4 percent of all located deportable aliens in 1990, 94.5 percent in 1991, 94.8 percent in 1992, and 95.6 percent in 1993.
Our study is hampered by the absence of data from the 1994 and 1995 fiscal years. We are only able to view these undocumented immigration flows pre-Proposition 187. Nevertheless, the available data gives us an idea of the type of pressure being posed at significant ports of entry.
Sick and Undocumented: A Case Study of Emergency
Room Usage in a Southern California Hospital
Description of Data Set
The emergency room data came from a privately-owned Southern California hospital that serves a predominantly Latino population. According to the 1990 Census, this community is comprised of 94.7 percent Latinos. The census also reported that 11.5 percent of the labor force in this community was unemployed.
We chose to look at this particular area because, with the passage of Proposition 187, we anticipated that undocumented immigrants will not seek medical attention from physician's clinics for fear of apprehension. Since federal law does not allow hospitals to turn down any patient who has an emergency condition and since some studies have shown that fear of apprehension has led some undocumented immigrants to wait until an emergency crisis situation to seek help, generating this data set would provide a better understanding of the percentage change of undocumented immigrant usage of a health facility pre- and post-Prop 187.
Assuming that undocumented immigrants who do not have medical coverage will therefore fall under two financial classes, self-pay or Medical, we limited our search to these categories. We excluded people who had Blue Cross, Worker's Compensation, or any other type of health coverage.
We asked the hospital to include the following information in their query: medical record number, date of admittance, race, social security number, financial class (G1 for self-pay, C1 for Medical), and dollar amount paid for the emergency room service provided. We also asked for birthplace and type of service provided, but the query could not generate these.
Within these financial classes, we identified several other key areas that may suggest that the patient is undocumented: absence of social security number, race, date of admittance, and frequency of use. In the "Race" column, we used the hospital's code: A-Asian, B-Black, C-Caucasian, H-Hispanic, N-North American Eskimo, O-Other, U-Unknown. X applied patients who did not list any of these race codes or have anything written in this slot.
There are several areas of concerns in the data set. There were more than 13,000 medical records in the original query, some of them from repeat admits. Due to the sheer enormity of information and the lack of time, we took a random sample of some 400+ medical records. Our sample contains some repeats of particular medical record numbers. The first computerized medical record number was assigned on 7/1/92. A patient keeps the same medical record number for subsequent visits.
If Proposition 187 is indeed effective, there will be a lower percentage of undocumented patients. This could be due to a smaller undocumented immigrant flow, fear of apprehension for undocumented residents who have been in the area pre-Prop 187, and voluntary or involuntary outflow of this population. If Proposition 187 is ineffective, this percentage should remain unchanged, since, by federal law, hospitals cannot turn down any patient with an emergency condition and the targeted population has knowledge of this fact.
Since the hospital does not ask for proof of residency from its patients, several key factors suggest whether or not the patient is an undocumented immigrant. A patient without a social security number and is Latino would warrant special consideration. An African-American or Caucasian patient with a social security number would be least likely to fit into the category of undocumented immigrant.
Some patients may have gotten their social security numbers illegally and I therefore anticipate a lower count. A low count could also be anticipated due to the number of patients who are not listed under "Other" or "Unknown." In the query reports, these patients are assigned some type of number or have nothing written down under the column "Race." For the sake of sorting the data, I have assigned patients who do not fall under the hospital-defined racial categories with an X.
"Race" as a determinant was chosen based on the highest reported number of undocumented immigrants from each sending country taken from the INS Statistical Yearbook (see Tables entitled "Deportable Aliens Located by Status of Entry and Region and Selected Country of Nationality" Fiscal Years 1990-1993). We paid closer attention to patients who are of Asian and Latino backgrounds. "Date of admittance" was also a factor because we wanted to see if this had any association with an annual flows of undocumented immigration. Frequency of visit was also considered because this suggests how long the patient has stayed in the area.
We also used "charges" as an explanatory variable. We want to know if severity of need is likely to increase the likelihood that an undocumented immigrant will use the emergency room. We are wary of making absolute interpretations because "charges" may also be different for the undocumented immigrant community. Therefore, the causality could run the other way, making interpretation of its coefficient ambiguous.
Data Analysis and Findings
To determine the emergency room usage of and cost to undocumented immigrants pre- and post- Proposition 187, we ran several regressions using Illegal (the most likely of which fall under H [Latino] with no Social Security Number) as the dependent variable. The first regression had Proposition 187 (>12/1/94) and Charges as the independent variables. We found that after the passage of Proposition 187, there was a 5 percent increase in the likelihood that an emergency room patient is an undocumented immigrant. The coefficient for this variable was 0.05532895, with a standard error (SE) of 0.04540064. The SE
was almost as large as the coefficient; therefore the regression was not very precise.
In this same regression, we also found that for all financial classes, patients most likely to be undocumented immigrants also had lower charges than those who were less likely to be "illegal." The coefficient for Charges is -7.101E-05, with an SE
of 6.7366E-05. Since the SE
is once again almost as large as the coefficient, the measure is not very precise. Regardless, this somewhat dampens the argument that undocumented immigrants are a "net drain" on the economy, given that a great number of the patients under this category receive state-provided Medi-Cal benefits that pay for their emergency room usage.
Furthermore, when we ran a regression using the same dependent variable and looking only at Medi-Cal patients, we found that the likelihood of being an undocumented immigrant for this particular financial category actually decreased by 4 percent after the passage of Proposition 187. The coefficient for Proposition 187 is -0.04441379, with an SE
of 0.04669113. This does not go with our initial regression that considered all financial classes. Some discussion of this discrepancy is warranted.
There was also a negative correlation between steep charges and being an undocumented immigrant. The coefficient for Charges is -1.6892E-05, with an SE
of 6.864E-05. This could suggest that even within the already shrinking category of "Illegal" and with "Medi-Cal," the actual cost to the state is not as high as others might project. This could also be interpreted as Proposition 187 actually "doing its job:" that is, making it more difficult for undocumented immigrants to gain health benefits from the state and thus the decrease in the number of undocumented immigrants going to the emergency room with Medi-Cal.
Finally, we ran a regression using the same dependent variable, retaining the previous explanatory variables and adding monthly unemployment rates for the City of Los Angeles. Since we only have unemployment figures up until May 1995, we had to truncate 21 medical records that went all the way to July 6, 1995. There was a 3 percent decrease in the likelihood that a person was an illegal after the passage of Proposition 187 for this regression. Proposition 187 had a coefficient of -0.03164311, with an SE
of 0.06446385. We found that, the greater the unemployment rate, the less likely undocumented immigrants are to use the emergency room. The coefficient for Unemployment Rates is -0.0329441, with an SE
It is worthwhile to note that in the first five months of 1995, the unemployment rate for the city of Los Angeles has been steadily decreasing. It has reached its lowest levels at 6.4 percent for April and May 1995, the greatest decrease since the April 1991 levels of 6.7 percent. This is a noteworthy drop when we consider that the annual unemployment rates from 1991-1994 have been hovering between 7.5 percent and 9.0 percent. There is also a negative correlation for all financial classes between the charges and the likelihood that the patient is illegal.
The percentage of patients most likely to fit the "Illegal" category from 1992 to the first six months of 1995 is as shown:
Emergency Room Usage by Selected Latinos, 1992-1995
1992 1993 1994 1995
L w/o ss# 25% 64% 44% 70%
L w/ ss# 12% 36% 55% 30%
L w/o ss# 14% 22% 16% 17%
L w/ ss# 66% 76% 81% 77%
L w/o ss# 15% 26% 19% 30%
L w/ ss# 57% 73% 78% 70%
Due to limited scope of the time series, we cannot discern any notable patterns in the usage of the emergency room both by the explicitly targeted population and those not necessarily problematized by Proposition 187. Since the number of patients from other racial groups were negligible, we chose to highlight the comparison between two different categories within the Latino community. The percentages may not entirely support the findings in the regression because of the time period that each method has covered. The percentages were calculated from a yearly count of the particular groups and financial class, thus making the >=1/1/95 the post-Proposition 187 period. The regression defined post-Proposition 187 as >12/1/94.
Conclusion and Research Implications
Using the macroeconomic conditions of the sending countries and that of a particular region in California to frame the hospital case study, we begin to see the complex interplay of these different dynamics. Although the regressions we ran were not very precise due to the sample size, other lurking variables and further limitations of the study, they are still suggestive of behavioral changes of the population specifically targeted by Proposition 187. Further inquiry is required if we are to make exact interpretations of what these changed behaviors represent.
For instance, after the passage of Proposition 187, what does the increase in the percentage of "highly likely undocumented immigrants" for all financial classes stand for? We can say that Proposition 187 was ineffective because although it explicitly allows for "illegal alien" usage of the ER
under Medi-Cal, it fails to deliver its promise of "protecting California citizens and legal residents" from the costs incurred by "illegals." This regression suggests that it didn't do anything to stop undocumented immigrants from "taking-up" publicly-funded health benefits of Medi-Cal. But are these health benefits the primary reason for the continuing flow of undocumented immigrants into the state?
Once again, lack of data limits our ability to quantitatively answer this question. Since we didn't have a monthly tabulation of the unemployment rates for each of the top sending countries as well as the monthly counts of deportable "aliens" for our time series, we cannot run regressions to determine the coefficients and correlation's using these explanatory variables. Regardless, we found that there has been a general trend of sluggish economic growth for the countries of origin, worrisome unemployment levels for the city of Los Angeles, and a growing number of apprehended undocumented immigrants.
This exploratory project, which takes into account the methodology of other studies, illuminates how difficult it is to analyze the behaviors and characteristics of a group of present California residents who are subjected to a harmful piece of legislation. Although Proposition 187 is tied up by injunctions in the courts and many hospitals (including the one used in this case study) have reached out to their communities by stating non-compliance, it is left to be determined by time and more accurate data gathering and analysis the true impact of Proposition 187.
Back to the 95 McNair Journal.
Back to the UC
Berkeley McNair Scholars Program.
I have some others but those are in Spanish and made by COLEF, just give me a call if you want them.
Kids!....we are going to the happiest place on earth...TIJUANA! signed: Krusty the Clown