Immigration and Social Security
The Washington Monthly: Last year the trustees estimated that Social Security had an overall 75-year deficit of 1.95% of taxable payroll. This year it's 1.70%. That's a pretty substantial improvement. What caused it?... Table IV.B9 has only one significant change from 2007: "Methods and programmatic data." And what might that entail?... immigrants. To be specific, better estimates of the taxes and benefits received by illegal immigrants -- or, as the trustees refer to them, "other-immigrants":
In previous reports, the other-immigrant population was projected using assumed annual numbers of net other immigrants with a static age-sex distribution. For this year's report, the annual numbers of net other immigrants are projected by explicitly modeling other immigrants and other emigrants separately.
Translation: instead of just pulling a net number out of a hat, the trustees built a model that estimated the actual demographic characteristics of both immigrants and emigrants. And guess what?
- Illegal immigrants tend to skew young. This benefits the system.
- Young people have more children than older people. This benefits the system.
- Some illegal immigrants pay taxes for a few years and then leave. This benefits the system.
This year's report results in [...] a substantial increase in the number of working-age individuals contributing payroll taxes, but a relatively smaller increase in the number of retirement-age individuals receiving benefits in the latter half of the long-range period.
Give or take a bit, it turns out that this shores up the Social Security system to the tune of around $13 billion per year. Thanks, illegal immigrants!