WELFARE AND THE CHILDREN OF IMMIGRANTS: TRANSMISSION OF DEPENDENCE OR INVESTMENT IN THE FUTURE? Kelly Stamper Balistreri.

Transcription

1 WELFARE AND THE CHILDREN OF IMMIGRANTS: TRANSMISSION OF DEPENDENCE OR INVESTMENT IN THE FUTURE? Kelly Stamper Balistreri A Dissertation Submitted to the Graduate College of Bowling Green State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY August 2006 Committee: Jennifer Van Hook, Advisor Karen Johnson Webb Graduate Faculty Representative Wendy Manning I Fen Lin Franklin Goza

2 ii ABSTRACT Jennifer Van Hook, Advisor The public concern that immigrant families might be using a disproportionate share of social benefits and transmitting some form of public dependency to their children, combined with the rising levels of immigrants entering the country, fueled the passage of the Personal Responsibility and Work Opportunity Reconciliation Act in 1996, which limited public assistance to many immigrant families. This dissertation uses the Current Population Survey and the National Longitudinal Survey of Youth 1997 to explore the association between exposure to welfare and young adult outcomes of educational attainment and labor force participation with a focus on parental nativity status as well as broad country of origin group. A group level analysis is performed using linear probability models on aggregate national origin groups to ascertain whether the welfare use of an immigrant group affects the average level of high school graduation, college enrollment, and welfare participation of the second generation, net of immigrant groups education level. An additional analysis assesses the relationship between prior parental welfare legacy and subsequent outcomes at the micro level of the individual using binary and multinomial logit models. Results from the CPS analysis provide no evidence of an intergenerational correlation in welfare receipt across immigrant generations, but do provide descriptive

3 iii evidence of a positive correlation between immigrant first generation welfare receipt and the young adult second generation educational attainment. The NLSY97 analysis shows a persistent negative association between welfare legacy and high school graduation; a negative association that is most pronounced for children of natives. Results of this study also show the largest effect of welfare receipt among the most disadvantaged group, the young adult children of immigrants from Mexican and Central American countries. The main finding of this study suggests that the negative impacts of welfare receipt might be lessened and in some cases reversed among the young adults from immigrant families. Such findings challenge the common notion that immigrant families use welfare as a crutch across generations and raise serious concern about U.S. immigration and welfare policies.

4 iv ACKNOWLEDGMENTS I wish to express my sincere appreciation for everyone who has helped me through the development and completion of this work. I am extremely grateful to my advisor, Jennifer Van Hook. She has not only helped me to develop the analytic and quantitative skills needed for a career in research, but she has always displayed a contagious enthusiasm for immigration research. I am also especially grateful to Wendy Manning who listened patiently as I worked to clarify my analyses, adding important suggestions at every step. As Director of the Center for Family and Demographic Research, she also made it possible for me to dedicate much needed time to finish this dissertation. I also want to thank the other members of my committee, I Fen Lin, Frank Goza and Karen Johnson Webb for helpful comments. I also wish to express my heartfelt appreciation to my sons, Mason and Lucas, my husband John, my parents, my sisters, and all of my friends who provided constant encouragement and support throughout this long process.

5 v TABLE OF CONTENTS Page INTRODUCTION... 1 CHAPTER I. PRIOR RESEARCH... 7 Theory... 7 Intergenerational Effects of Welfare... 7 Structural Perspectives... 8 Cultural Perspective Support for Transmission Theories Immigrant Assimilation Welfare and Immigrants Hypotheses Intergenerational Effects of Welfare Use Welfare Culture Model Structural Models: Limited Resources, Correlated Disadvantage, Neighborhood Characteristics CHAPTER II. INTERGENERATIONAL CORRELATIONS Analytic Sample Results Basic Demographic Characteristics... 34

6 vi Young Adult Outcomes Transfer Programs Educational Attainment and Labor Force Participation Intergenerational Correlations in Welfare Use CHAPTER III. INDIVIDUAL LEVEL ANALYSIS Data Analytic Sample Variables Parental Welfare Legacy and Nativity Status Parental Income and Education Levels Youth Respondent Educational Attainment Individual and Family Characteristics County and State level Characteristics Analytic Plan Results Descriptive Characteristics Within and Between Nativity Group Differences Discussion of Methodologies An Explanation of Instrumental Variable Techniques Model Selection... 74

7 vii The Effect of Parental Welfare Legacy on High School Graduation The Effect of Parental Welfare Legacy on College Enrollment The Effect of Parental Welfare Exposure on Educational Attainment across Country of Origin Groups The Effect of Parental Welfare Legacy on Labor Force Participation.. 95 CHAPTER IV. CONCLUSIONS REFERENCES

8 viii LIST OF FIGURES Figure Page 2-1 Construction of CPS Files for the Young Adult and Parent Cohort... 34

9 ix LIST OF TABLES Table Page 2 1 Demographic and Socioeconomic Characteristics of Young Adults in the U.S. 2005, Ages 19 to Weighted Mean Public Assistance Use, Educational Attainment and Labor Force Participation by Nativity Status, Young Adult Cohort Linear Probability Models for the Receipt of Public Transfers, Educational Attainment and Labor Force Participation, Young Adult Cohort Estimated Coefficient of Transmission between Parent s Public Assistance Use and Second Generation s Outcomes NLSY98 Sample Characteristics, Weighted Means Mean Educational Outcome by Parental Welfare, Native Born Children of Immigrants and the Children of Natives SLS, OLS, and Logistic Coefficient Estimates and Model Diagnostics for the Regression of High School Graduation on Welfare Legacy and Nativity Status Logistic Regression Coefficients and (Standard Errors) for the Regression of High School Graduation on Parental Nativity Status, Welfare Legacy, Individual, Family, Parent and Neighborhood Characteristics... 78

10 x 3 5 Odds Ratios and Regression Coefficients for the Logistic Regression of High School Graduation on Parental Welfare Legacy and Parental Nativity Status Odds Ratios and Regression Coefficients for the Logistic Regression of College Enrollment on Parental Welfare Legacy and Nativity Group Odds Ratios and Regression Coefficients for the Logistic Regression of High School Graduation on Parental Welfare Legacy and More Detailed Nativity Group Odds Ratios and Regression Coefficients for the Logistic Regression of College Enrollment on Parental Welfare Legacy and Nativity Group Regression Coefficients and Odds Ratios from Multinomial Logit Models for Patterns of College Enrollment and Labor Force Participation on Parental Welfare Legacy and Parental Nativity Status Regression Coefficients and Odds Ratios from Multinomial Logit Models for Patterns of College Enrollment and Labor Force Participation on Recent Parental Welfare Legacy and Parental Nativity Status

11 1 INTRODUCTION Since 1992, over ten million immigrants have entered the United States and today, an estimated 20 percent of the population is an immigrant or the child of an immigrant (U.S. Census Bureau 2002). An issue that has been debated by both policy makers and researchers alike concerns not only the immediate cost of immigrants coming into the U.S. but also the future costs of their children. The public concern that immigrant families might be using a disproportionate share of social benefits and transmitting some form of public dependency to their children, combined with the rising levels of immigrants entering the country, fueled the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA or Welfare Reform) in One of the biggest social experiments to be conducted in this country in years, Welfare Reform with its severe immigrant restrictions was intended to reduce the rate of welfare use by immigrants who were already residing in the U.S. and discourage those who might need social assistance from entering. These changes reflect the commonly held notions about the negative effects of welfare on children and families. This dissertation is an attempt to examine the complicated relationship between welfare receipt and intergenerational outcomes among immigrant families. While much scholarly attention has been given to the welfare recipiency patterns of immigrants, this dissertation focuses on the impact of welfare receipt on a growing

12 2 population the children of immigrants. More specifically, this study focuses on the relationship between the receipt of welfare within immigrant families and three key outcomes among the children of immigrants; educational attainment, adult welfare use, and labor force participation. An important question underlying the immigrant welfare debate is whether the native born children of immigrants will achieve the economic self sufficiency necessary for social mobility. By examining the effects of welfare receipt on the educational attainment and labor force participation of the young adult children of immigrants, this research centers on a population in which welfare restrictions could have a significant potential impact on the nation s social and economic future. Most of the research on the intergenerational effects of welfare receipt has focused almost exclusively on nativeborn parents and native born children. By placing the emphasis on immigrants and their children and exploring the differences in welfare use by nativity and generational status, as well as the effect of welfare receipt on future outcomes, we may begin to understand a key question underlying the welfare and immigration debate; does welfare serve as a crutch for immigrant families characterized by high levels of poverty and low levels of education or does it serve as a means of investment in their children s future? The future outcomes of the children of immigrant are of great policy significance because they compose the fastest growing segment of U.S. society under age 18

13 3 (Henandez and Charney 1998), a group that is also disproportionately poor. In fact, one out of five children in the United States is the child of an immigrant (Van Hook and Fix 2002) and more than half of the children of immigrants in the U.S. are living in families with low incomes (below 200 percent of the federal poverty thresholds) (Capps, Fix, Reardon Anderson 2003). It has been shown that economic deprivation during childhood hinders the future achievement of children (Duncan, Yeung, Brooks Gunn, and Smith 1998), but we do not know the impact that the immigrant restrictions of PWRORA will have on the eventual outcomes of the children of immigrants. From a policy standpoint, if it is the case that immigrant parents welfare receipt positively influences children s outcomes then recent revisions of welfare eligibility rules will ultimately have a negative effect on the success of the children of immigrants and the success of U.S. immigration policy. This work makes several contributions. First, it examines the effects of welfare receipt in immigrant families on the educational attainment of the young adult children of immigrants. While most of the children of immigrants do go on to achieve higher levels of education than their parents (Chiswick and DebBurman 2003), the role that welfare receipt plays in this transition is not known. Empirical studies on the effects of welfare receipt on children find, for the most part, a negative correlation between parents receipt and children s educational outcomes (Boggess 1998; Brooks Gunn, Guo, and Furstenburg 1993; Duncan 1994; Duncan and Yeung 1995; Haveman and Wolfe

14 4 1994; Haveman, Wolfe, and Spaulding 1991; Hill and Duncan 1987; Ku and Plotnick 2003; McLanahan 1985; Peters and Mullis 1997; Teachman, Paasch, Day and Carver 1997). Yet research in this area has been limited by a lack of attention to immigrant families and an inability to establish causal links. The role that parental welfare receipt plays in children s future educational outcomes is likely different for immigrant families than it is for native families. This represents a serious gap in the literature on immigrant families because a majority of the children of immigrants are citizens and are eligible for social benefits, social benefits that may play an important role in their development. Another contribution of this dissertation is that it increases knowledge concerning the use of welfare across immigrant generations. Although welfare receipt among immigrant families has been examined in prior research, less attention has been paid to the possible association between welfare exposure and children s long term outcomes among immigrant families. Given that the very act of migrating to the United States can be seen as an investment in the future success of their children (Fuligni and Witkow 2004; Suarez Orozco 1995), it is important to understand ways in which immigrant parents might be using welfare payments to ensure their child s well being. While the data used in this dissertation may not allow the investigation of the precise mechanisms by which parental welfare receipt may influence their children s outcomes,

15 5 one could argue that much can be inferred that is important to social scientists and policy makers alike. This study examines the effects of welfare receipt on the children of immigrants from two angles: from a group perspective and from an individual perspective. Data are obtained from two sources; the Current Population Survey (CPS) and the 1997 National Longitudinal Survey of Youth (NLSY97). This research has three specific goals. The first is to use CPS data to present descriptive statistics on the levels of welfare use, educational attainment, and labor force participation among the young adult children of immigrants (both foreign born and native born) and the young adult children of natives ages 19 to 23, and how these values vary according to social and demographic characteristics. The second goal is to evaluate the intergenerational correlations in welfare receipt between the immigrant parent and young adult second generations in the United States. This dissertation modifies recent research on the transmission of welfare effects using data that are more current and more refined techniques. This research explores how the degree of correlation between the immigrant parent s generation program participation and the young adult second generation s participation differs between country of origin groups on aggregate. The third goal is to explore, using multivariate techniques and longitudinal data (NLSY97), how much parent generation welfare use is correlated with second generation young adult outcomes. In addition, the relationship between parental welfare use and subsequent

16 6 children s educational attainment (high school graduation and college enrollment) is evaluated, as well as the adult children s transition to the labor force and to examine how this relationship varies by nativity status of the parents. Chapter I reviews the prior literature and governing theories, both cultural and structural, on the intergenerational effects of welfare receipt. Given that the focus of the above mentioned literature has not been on the children of immigrants, a set of hypotheses are developed that are informed not only by the welfare effects literature but also by the immigrant assimilation literature. The analytic portions are divided into two chapters. Chapter II provides information on the CPS analytic sample, methodological techniques and presents descriptive statistics on the young adult children of immigrants along with the intergenerational correlations in welfare receipt. Chapter III follows with a description of the NLSY97, the analytic sample, and methodologies used to test the hypotheses outlined in the first chapter. Chapter IV reviews the main findings, describes the limitations of this study, and discusses future research directions.

17 7 CHAPTER I. PRIOR RESEARCH Sociological research consistently finds that children growing up in households that utilize welfare have higher rates of subsequent welfare use (Gottschalk 1990; Gottschalk 1992; Rank and Cheng 1995), lower educational attainment (Ku and Plotnik 2003), and lower levels of labor force attachment (Peters and Mullis 1997; Rich 1999; Santiago 1995). A number of studies, most of which examine mother daughter pairs, find that parental welfare receipt is positively related to daughters subsequent welfare dependency, female headship, and dropping out of high school (Antel 1992; Gottschalk 1990; Gottschalk 1992; McLanahan 1988; Solon, Corcoran, Gordon and Larsen 1988). However, the literature is not clear on the effect of parental welfare receipt on completed education and future labor force participation, particularly for children growing up in immigrant families. Theory Intergenerational Effects of Welfare There are several explanations structural and cultural guiding the research on the intergenerational effect of welfare receipt, all of which assume that children raised in welfare homes are likely to be economically disadvantaged. However, the key difference among these perspectives lies in what is identified as the prime element responsible for any impact on children (Wylie 1999). The current research into the intergenerational nature of welfare receipt can be viewed as a part of the extensive

18 8 sociological scholarship on the effects of poverty on social and economic achievement in adulthood. Structural Perspectives Structural perspectives include the limited resources model, the correlated disadvantages model, and the neighborhood model (Corcoran 1995). The limited economic resources model suggests that it is a lack of parental economic resources and not parental welfare recipiency per se that influence children s subsequent welfare use, educational attainment, and labor force participation. This perspective implies that children s well being and future outcomes are determined by their parent s investments in them, measured by the economic resources and time spent with children (Becker 1981; Becker and Tomes 1986). The more resources the parent possesses, the larger investment in the child; translating into higher levels of educational attainment and socioeconomic status. If the parents resources are limited, particularly during adolescence, the child may experience restricted opportunities for human capital development along with higher levels of relative deprivation at this age. Therefore, this group might suffer from low socioeconomic status as an adult (Haveman, Sandefur, Wolfe and Voyer 2004). This perspective suggests that the key determinant is the parent s lower economic background, not welfare use, which influences children s subsequent outcomes. If this is the case, that it is income and not the source of that income, then we might expect children growing up in immigrant families to be at a

19 9 distinct disadvantage. Immigrants arriving to the U.S. during the 1970s and 80s may have found it more difficult to acquire the economic resources necessary to invest in the human capital development of their children because they are confronted with a restricted economy in which there are fewer opportunities for advancement (Bean and Stevens 2003). This is partially due to industrial restructuring which has substantially influenced family income distribution, creating a substantial gap between those with resources and those without (Chevan and Stokes 2000; Wilson 1997). Similar to the limited resources model is the correlated disadvantages model, which focuses on parental characteristics that may limit children s subsequent attainment, such as low education levels, family type, and limited English language ability (Barthlomae, Fox and McKenry 2004; Corcoran 1995). It could be that parents with lower levels of education or English language ability may be less able to invest in the human capital development of their children (Becker and Tomes 1986). For example, among the children of immigrants, those having parents with low English proficiency are more likely to drop out of high school than those whose parents are proficient (Bleakly and Chin 2004). Among children with foreign born parents, 23 percent have mothers and 40 percent have fathers that are not high school graduates. Contrasting this with the levels for the children with native parents, 12 percent of the children of natives have either a father or mother that is not a high school graduate; the correlated

20 10 disadvantage perspective would suggest that immigrant parents are less able to invest in the human capital development of their native born child. Finally, the environmental model builds upon the limited resources and correlated disadvantages models by placing welfare families in a wider social context with the emphasis on neighborhood factors that might restrict children s opportunities. This perspective stems from Wilson s (1987) underclass model that suggests it is economic restructuring and the out migration of the middle class that has led to generations of limited economic mobility (Corcoran 1995). Neighborhoods are thought to affect adolescent children s outcomes through the collective behavior of its residents as well as the presence of positive adult role models (Brooks Gunn, Duncan, Klebanov and Sealand 1993). In fact, research has shown that children and adolescents from poorer neighborhoods perform less well on a variety of developmental measures than do than their counterparts in more advantaged neighborhoods (Brooks Gunn, Duncan and Aber 1997; Duncan, Brooks Gunn and Klebanov 1994; Jencks and Mayer 1990). Immigration scholars have long been concerned that the macro economic shifts from a manufacturing to a technology based economy in the U.S. may have increased barriers for immigrant families in particular (Portes and Zhou 1993; Zhou 1999). Given that adolescents from immigrant families are more likely to live in neighborhoods with fewer resources and often high crime rates (Portes and Rumbaut 1996), we might expect

21 11 that this type of concentration of poverty would have the power to undermine the educational and economic success of native born children of immigrants. Cultural Perspective In contrast to the structural models, the welfare model suggests that welfare receipt in and of itself is a key determinant affecting children s outcomes, having a separate effect beyond that of low income. This perspective stems from fears that welfare receipt may have a negative effect on children. It posits the existence of a welfare culture, whereby welfare receipt among poor families changes the cultural or psychological traits of those families ultimately leading toward lower levels of educational achievement and socioeconomic attainment (Murray 1984). Growing up in a household that receives welfare payments could potentially lower future costs associated with welfare participation by creating a welfare culture within which the stigma associated with welfare use is lessened or removed by later generations (Moffit 1992) or by increasing the amount of information available to the child about the welfare system itself (Rank and Hirshl 1993). Additionally, as welfare parents become less attached to the labor force and more dependent on welfare income, their children may suffer from a lack of information on successful employment, job searching strategies, etc. Subsequently, these children may lack the necessary skills needed for economic independence, putting them at greater risk as adults.

22 12 Support for Transmission Theories Empirical evaluations of the structural and cultural perspectives typically assess whether parental welfare use is correlated with subsequent outcomes among their children while controlling for the influence of other spurious factors (Bartholomae, Fox and McKenry 2004; Corcoran 1995; Rank and Cheng 1995). There has been mixed support for both the structural and cultural perspectives. For example, parental welfare receipt is positively associated with a child s later welfare receipt, even after controlling for family income and background characteristics (An, Haveman and Wolfe 1993; Antel 1992; Duncan, Hill, and Hoffman 1988; Gottschalk 1992; McLanahan 1988; Pepper 1995; Solon, Corcoran, Gordon and Larsen 1988). Yet, Levine and Zimmerman (1996) find that at least three quarters of the intergenerational correlation between generations of welfare use can be attributed to the expected intergenerational correlation between income and other family characteristics, providing evidence of a cycle of poverty rather than a cycle of welfare dependence. Several scholars have investigated whether growing up in a welfare household reduces children s educational attainment (Boggess 1998; Duncan, Yeung 1995; Duncan and Brooks Gunn 1997; Duncan 1994; Haveman, Wolfe and Spaulding 1991; Ku and Plotnick 2003), finding that children who grow up in households that have received welfare acquire fewer years of schooling and are less likely to graduate from high school compared to children whose parents did not receive welfare, net of family

23 13 income. That is, after controlling for family income, results suggest that there is an adverse effect of welfare receipt as a source of income. However, the evidence is somewhat mixed, particularly with regard to differences in the age of exposure. Haveman, Wolfe and Spaulding (1991) tested the timing of welfare receipt, finding that the combination of parental welfare use and poverty during early adolescence (12 to 15) was a significant predictor of high school dropout whereas welfare use at earlier periods was not. Ku et al. (2003), using the PSID and sibling fixed effects methods, found similar results, namely that children receiving welfare during late childhood and early adolescence attained lower levels of education. On the other hand, Teachman et al. (1997) found no evidence that welfare receipt, net of family income, family structure and IQ scores, is related to high school graduation, total number of years schooling and college enrollment. Prior research on the effect of parental welfare receipt on child s later labor force participation and earnings is also mixed. Several studies found a small negative effect of parental welfare receipt on (mostly son s) later labor force participation but the impact was not always significant, varied in size, and different studies had varying effects with respect to race and ethnicity. Early research suggested that parental welfare receipt, net of total family income, has no effect on the labor force participation and wage rate of young men (Hill and Duncan 1987). However, later research by Corcoran, Gordon, Larsen, and Solon (1992) using the Panel Study of Income Dynamics (PSID),

24 14 examined the impact of both family and community welfare receipt on young men s earnings, finding a strong negative association. In more recent research, Peters and Mullis (1997) examine the role of welfare as a source of family income on the subsequent labor force participation of both young men and women using the NLSY79. 1 After controlling for the possible endogeneity of family welfare receipt, the authors find that parental welfare receipt is negatively associated with subsequent labor market experience. Whereas the previous sociological literature suggests that it is either economic or structural factors or welfare receipt itself that influence the intergenerational transmission of the effects of parental welfare use, Borjas and Sueyoshi (1997) and Borjas (1999) suggests that the crucial factor is ethnicity. The premise of this work is that ethnicity matters in that welfare dependency and socioeconomic success in later generations depends not only on parental influences but also on the characteristics of the ethnic group. The idea is that the characteristics of the ethnic environment influence the outcomes of the children of that ethnic group beyond the individual characteristics of the parents. If the ethnic group includes a high proportion of members with relatively low levels of human capital, such as recent immigrants, and high levels of welfare receipt, then there will likely be a downward force exerted that will prevent 1 They measure total number of weeks of labor force participation attained by 1990 (when respondents were 24 or 25 years old), as well as their current wage rate.

25 15 later generations from advancing toward the population mean. This approach is very similar in idea to the neighborhood effects model. As in previous studies, Borjas et al. (1997) find that children growing up in welfare households are more likely to receive welfare as adults. However, after introducing ethnic group level characteristics (average employment rate, average education level, and average welfare participation rate) the authors also conclude that net of parental welfare receipt, an increase of one percentage point in the aggregate welfare recipiency rate of an ethnic group increases the participation rate for that child by.67 percentage points. In other words, growing up in an ethnic environment characterized by welfare receipt directly affects the welfare participation in later generations, beyond that of parental receipt. However, Borjas et al. (1997) does not address the question of parental nativity status: does having an immigrant parent as opposed to a native born parent influence welfare behavior or subsequent attainments in later generations, regardless of ethnic environment? Immigrant Assimilation Prior to developing a set of hypotheses on how the structural and cultural models might apply to the children of immigrants, it is important to consider the process by which the children of immigrants become incorporated into a system of stratification in American society. That is, how do immigrants and their children become American? Portes and Rumbaut (1996) suggest that the real issue is not

26 16 whether the children of immigrants will incorporate into American society, but to which aspects will they incorporate. Straight line or classic assimilation theory states that immigrant s successful incorporation into U.S. society is a function of length of time in the country and that immigrants are positively self selected on an upward path toward success with generation serving as a vehicle for advancement. Immigrants may arrive with low levels of education, English language ability or income but they eventually overcome these and other socioeconomic disadvantages. However, due to the changing composition of immigrants amid economic restructuring, some scholars have developed the segmented assimilation theory, which suggests that the path of assimilation could be negative; that is, some immigrant children will move in the opposite direction. They might be confronted with barriers such as poor schools, dangerous neighborhoods and little means of economic advancement; they might also become trapped in a minority status causing them to incorporate into poverty and the underclass (Portes and Zhou 1997). Some youth from immigrant families might also develop an oppositional identity, eschewing achievement in education in order to remain distinct from the majority culture (Gibson 1991; Matute Bianchi 1991; Waters 1994) A third manner scholars have suggested can be thought of as lagged assimilation; an active preservation of ethnic values and customs while integrating economically (Gibson 1988; Zhou 1999:). These ideas (that certain characteristics either of the immigrant parents or the society influence the

27 17 success of the children of immigrants) are mirrored in the theories of welfare use and intergenerational transmission presented in the previous section. Welfare and Immigrants Limited research has attempted to ascertain the effect of immigrant family welfare receipt on later generations, most specifically on the likelihood of welfare receipt in later generations. For example, Butcher and Hu (1999) address the question of intergenerational correlation in welfare receipt among the foreign born by using 1970 Census data on the immigrant generation (the first generation) combined with second generation data taken from the Current Population Survey ( ). Given that the data used in this analysis are cross sectional, Butcher and Hu are unable to link parents with children. Instead, they utilize a group estimation procedure similar to Borjas (1999) ethnic effects models, estimating county of origin group level measures of mean food stamps receipt for the first and second generations. 2 Results indicate that while there is a positive and significant correlation between welfare receipt of the first and second generations, once education levels of the second generation are controlled, the relationship disappears, suggesting that the intergenerational transmission of the effects of welfare operate through the transmission of group skill levels. While the previous research has shown that there may be an intergenerational 2 To obtain an estimate of the intergenerational transmission of welfare dependency, they regress the second generations mean welfare participation rate (taken from CPS) on the mean cash receipt of the first generation (estimated from the 1970 Census).

28 18 correlation concerning welfare receipt, the causal links have not been firmly established (Moffit 1992), nor has the role of nativity status (or for that matter, the role of citizenship) been sufficiently explained. For example, we do not know what the effect of limiting welfare access or welfare amounts for the parent s generation has on the child s later outcomes, particularly among the children of immigrants. There may be a causal link between generations, but the observed correlation may be due to the simple fact that children of immigrants and their parents face similar circumstances and limitations. From the perspective of the recent immigrant restrictions in welfare laws, which limited access to a wide range of public benefits based on nativity status, removing welfare access from the immigrant parents could potentially influence the outcomes of the second generation in harmful ways. Much of the literature on the children of immigrants consistently points to the possibility that family income, parental education, and even the social networks of the immigrants community, are strong determinants of the success of the children of immigrants. For example, like children born to natives, the children coming from immigrant families with more economic resources are more likely to receive better grades in school (Kao 2004; Kao and Tienda 1995; Portes and MacLeod 1999), to remain enrolled in high school (Hirschman 2001) and to have higher overall educational attainment and earnings (Card, Di Nardo and Estes 2001). Yet, there is evidence that Hispanic immigrants (the largest immigrant group to the U.S.) and their descendants do

29 19 not converge to native levels of education and earnings as quickly as non Hispanic immigrants and their descendents. It could be that welfare may play a role in the subsequent attainments of the children of immigrants in ways not predicted by the welfare or economic models. Given the recent welfare restrictions that targeted immigrant families as well as the persistent poverty and other structural barriers the children of immigrants face in the United States, the purpose of this dissertation is to reevaluate the current sociological literature on the intergenerational transmission of the effects of welfare receipt, which essentially ignores the children of immigrants. To do this, this dissertation posits a series of hypotheses that place current ideas on immigrant assimilation within the structural and culture theories of welfare effects. By placing the focus on the children of immigrants amidst the existing conceptual framework, this dissertation adds new insight into the debate on immigrant families and welfare. A key issue in this debate is whether immigrant family welfare receipt is related to outcomes such as education and employment independent of other economic and sociodemographic factors that also occur with welfare receipt (Kalil and Eccles 1998). Therefore, the present research examines the characteristics and welfare participation of the young adult children of a more recent wave of U.S. immigrants, a population characterized by high levels of poverty and low levels of education. Further, this research assesses possible associations between prior welfare receipt on the educational

30 20 attainment and labor force participation of the young adult children of immigrants and the young adult children of natives. In doing so, the results bring some insight into the literature which has not carefully examined the role that welfare may play in the development and incorporation of the children of immigrants. Hypotheses How might the welfare frameworks cultural and structural predict outcomes for the children of immigrants? In other words, would welfare affect all children the same regardless of the nativity status of their parents? Alternatively, could welfare receipt have a differential effect even among the children of immigrants? Prior to testing a set of hypotheses on how the cultural and structural models might apply to the children of immigrants this dissertation presents two analyses. First, the Current Population Survey (CPS) is used to obtain descriptive statistics on children of immigrants and the children of native s ages (Table 2 2). As is explained more fully in the following chapter, the CPS is also used to calculate an intergenerational correlation of welfare receipt between an immigrant parent cohort and a cohort of young adult children of immigrants ages 19 to 24. The age group 19 to 24 is chosen to match roughly the cohort of NLSY97 children to be used in the longitudinal portion of the analysis. 3 The hypotheses outlined below are tested using the longitudinal NLSY data. 3 The youth respondents in the NLSY97 were ages in the initial wave, by the most recent wave (7) they are ages 19 to 23.

31 21 This research uses parental welfare measures taken from the first wave of data when the respondents were ages 12 to 16, and assesses later outcome measures for both the children of immigrants and children of natives. Therefore, a comparison is made between the children of immigrants and the children of natives, as well as an estimate of any differences between welfare recipients and non recipients among just the children of immigrants. Intergenerational Effect of Welfare Use H1: Persons from homes with a history of welfare use will have lower levels of subsequent educational attainment. H1i: The association between welfare and educational attainment varies by parental nativity status. The main hypothesis (H1) to be tested in this study is that a family s welfare history as measured by parental use will affect subsequent child outcomes. This draws on prior research that has found a negative relationship between parental welfare use and children s outcomes. With this model, an assessment is made as to whether there is a correlation between parental welfare use and children s outcomes (H1), and if this relationship varies by the nativity status of the parent (H1i). Remaining hypotheses can be grouped into two categories; those that suggest a direct causal effect of welfare receipt (welfare culture models) and those that suggest a spurious relationship between welfare and subsequent outcomes (structural models). The methods section outlines

32 22 key variables that are used in a series of models to identify how each group of characteristics (parental welfare receipt, parental income level, other characteristics of the parents, and neighborhood characteristics) are associated with the subsequent outcomes of children. Welfare Culture Model H2: The children of immigrants and the children of natives with a legacy of welfare have lower outcomes as measured by educational attainment and labor force participation along with higher rates of welfare use as adults, net of family income. H2i: Among the children of immigrants, the effect of welfare on subsequent outcomes will vary by immigrant ethnic group, net of family income. The Welfare Culture model (H2), based on the idea of a culture of poverty, suggests that there is an additional negative effect of welfare receipt above and beyond that of income. That is, the negative relationship between welfare and children s outcomes remains even after parental income levels are controlled. Cultural models emphasize values, attitudes and behaviors that persist among concentrated areas of poverty (Bane and Elwood 1994). According to this model, the effects of welfare receipt are likely to be stronger in areas or within groups that have high rates of welfare receipt and/or high rates of joblessness. While support for this hypothesis has been limited, this idea that children may become dependent on welfare as adults because of a shift in

33 23 values, and more specifically, that immigrant children would assimilate into welfare was a key focus of the immigrant restrictions in PWRORA. Some scholars and policy makers felt that welfare was acting as a magnet, pulling welfare prone immigrants to the U.S. and that their children would become the same; welfare dependent, low skilled and under educated. These ideas stemmed from the fact that there is wide variation across country of origin on a number of family characteristics (i.e. mother s education, poverty, linguistic isolation, and growing up in a single parent family). For example, two thirds of Mexican origin immigrant mothers, and over half of Central American origin mothers have less than a high school education, compared with less than 10 percent of European or Chinese mothers, and 18 percent of Caribbean mothers (Hernandez 2004). Research has also examined the combined levels of risk factors such as low maternal education, poverty, linguistic isolation, and single parent families among the children of immigrants (Hernandez 2004), finding higher rates of risk factors for children whose parents are from immigrant groups with low education levels (i.e. Mexico and Central America) compared with children whose parents are from immigrant groups with high education levels (i.e. India, Canada) and medium education levels (i.e. China, Caribbean). For example, roughly 61 percent of children from low education groups have at least two out of four risk factors, compared with 26 percent for those from medium education groups, and 12 percent from high education groups.

34 24 However, segmented assimilation theory suggests that the effect of welfare on the children of immigrants might vary across immigrants groups; there could be a decline in outcomes for those children who assimilate into the underclass or an improvement in outcomes for those children who assimilate toward the middle class. Segmented assimilation theory suggests that across generation, some group s exhibit declines in outcomes such as education or socioeconomic status, while others show improvements. Groups that are highly urbanized or have darker skin color, such as the children of Caribbean immigrants, are likely to follow a downward mobility pattern (Waters 1994). In contrast, other children who come from immigrant families with more resources follow a path of upward mobility; either adopting the values of the mainstream middle class or retaining immigrant values and solidarity while achieving economic security. This type of strategy has been documented among the Vietnamese (Zhou and Bankston 1994), the Punjab Indians (Gibson 1988) as well as the Koreans and Chinese (Zhou 2001). Hypothesis 2i, informed by the ideas of segmented assimilation, suggests that children s outcomes vary across differences in group characteristics. That is, there will be an interaction between welfare exposure and immigrant ethnic group. Structural Models: Limited Resources, Correlated Disadvantage, Neighborhood Characteristics H3: The negative relationship between parental welfare use and subsequent children s outcomes is explained by family income, and parental and neighborhood characteristics.

35 25 H3i: The children of immigrants fare better than the children of natives, net of parental welfare receipt, family income, parental and neighborhood characteristics. Under the structural framework, the relationship between a parent s welfare use and children s subsequent outcomes vanishes after income, parental and neighborhood characteristics are controlled (H3). That is, the connection between parent s welfare use and children s subsequent attainments is the result of parents lower economic background, education, etc. However, it is unclear how these factors might influence the children of immigrants. Some scholars suggest that all immigrants (both legal and illegal) are positively self selected from their country of origin on characteristics like self efficacy, ambition, and work ethic (Chiskwick 1978; Portes and Rumbaut 1996; Feliciano 2005). Therefore, the structural models might not operate in the same manner among immigrant families as among native families even though immigrant parents are more likely than native parents to have high levels of poverty, lack a high school degree, and live in neighborhoods with few resources. Under straight line or classic assimilation theory, positively self selected immigrants are thought to be on an upward path of socioeconomic mobility; poverty is only a temporary condition and generation is a vehicle for advancement. Further, recent research has shown that while immigrants may use welfare at higher rates than natives may when they are new arrivals, ten years later they have lower rates of welfare use than do natives (Bean and Van Hook 2006). It could be that immigrant families pool

36 26 income from multiple sources to maximize income, and minimize risk. For example, they might assemble income from extended family, as well as from formal and informal sources of income (Fuligni and Yoshikawa 2002; Tienda and Raijman 2000) thus increasing their ability to invest in the attainments of their children. Based on these ideas, we might find children of immigrants fare better than the children of natives, regardless of parental income, neighborhood characteristics, and parental human capital; welfare might actually function as settlement assistance among immigrant families. Hypothesis 3i suggests that the children of immigrants will have better outcomes than the children of natives, net of parental welfare history and structural characteristics. Some have argued that the differential outcomes experienced by the children of immigrants stems from the distinctive familial strategies that different country of origin groups have developed to help their children develop human capital (Mollenkopf, Waters, Holdaway, Kasinitz 2004). While this may be the case, the purpose of this dissertation is to try to understand the possible effect that welfare receipt may have on the children of immigrants. This provides the groundwork to examine later in detail strategies of coping with the immigrant experience.

37 27 CHAPTER II. INTERGERNERATIONAL CORRELATIONS The goals of this chapter are to: (1) present a demographic profile of the young adult children of immigrants and the young adult children of natives ages 19 to 24; and (2) to present levels of welfare use, educational attainment, and labor force participation for these groups; and (3) to present the intergenerational correlations in welfare receipt between the immigrant parent and young adult second generations in the United States. Prior research has shown that children (a majority of whom are citizens) growing up in immigrant families are more likely to be poor than children in native families, more likely to live in crowded housing, and more likely to lack health insurance (Capps, Fix, Reardon Anderson 2003). Those children from immigrant families must navigate the educational system and enter the labor force without having the benefits of parents who were reared in the same system (Cooper, Cooper, Azmitia, Chvira & Gullatt 2002). Yet, limited research has attempted to ascertain the effect of immigrant family welfare receipt on later generations, most specifically on the likelihood of welfare receipt in later generations. For example, Butcher and Hu (1999) address the question of intergenerational correlation in welfare receipt among the foreign born by using 1970 Census data on the immigrant generation (the first generation) combined with second generation data taken from the Current Population Survey ( ). Given that the data used in this analysis are cross sectional, Butcher and Hu are unable to link parents with children. Instead, they utilize a group estimation procedure similar to Borjas

38 28 (1999) ethnic effects models, estimating county of origin group level measures of mean food stamps receipt for the first and second generations. Results indicate that while there is a positive and significant correlation between welfare receipt of the first and second generations, once education levels of the second generation are controlled for, the relationship disappears suggesting that the intergenerational transmission of the effects of welfare operate through the transmission of group skill levels. The analysis presented in this chapter builds upon prior research in two ways. First, by using the most recently available data, a clear picture of the children of immigrants as emerging adults is presented. Given that prior research has carefully documented the wide levels of disparity among the young children of immigrants and children of natives with respect to poverty, parental education and other living conditions, we might expect varying levels of achievement between the children of immigrants and natives as they move through early adulthood. The young adult population is important to understand given that during these years, most young adults are obtaining education or training that will influence later levels of socio economic achievement (Arnett 2000). Second, this analysis improves upon Butcher and Hu (1999) and Borjas (1999) by using more current data, and by restricting the analysis to those children of immigrants that are young adults, thus trying to capture the first cohorts of children from the more recent waves of immigration who are now entering their late teens and early 20s.