Elderly Immigrants’ Labor Supply Response to Supplemental Security Income

Abstract

This paper examines the effect of changes in immigrant eligibility for Supplemental Security Income in 1996 on the employment and retirement behaviors of foreign-born elderly persons.  I find that denial of SSI was associated with a 5 percentage point (15 percent) increase in the employment of non-citizen elderly men and a 5.6 percentage point (11 percent) decrease in their retirement rate.  The estimated effects were higher for recent arrivals, a group most likely to be affected by the policy change.  Further, while recent arrivals were more likely to increase part-time work, the earlier arrivals responded to the policy by increasing full-time employment.  I find no consistent evidence that denial of SSI affected the employment of elderly immigrant women, but some evidence that it raised their retirement rate, specifically among those who immigrated in recent years.