Immigration’s Effect on the Social Security System

Presented at the conference titled “A 21st Century Immigration Policy for the West,” jointly organized in fall, 2018, by the Reason Foundation and Michigan State University’s Lefrak Forum and the Symposium on Science Reason and Modern Democracy. Forthcoming in an anthology of the conference proceedings.

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The Social Security system is underfunded, in part due to demographic challenges. Because the system is pay-as-you-go?meaning current workers support current beneficiaries?the combination of increasing life expectancies and stagnant birth rates is placing real strain on the system, which is scheduled to become insolvent by 2034, absent policy changes. Immigration, while not a silver bullet, can mitigate this challenge by providing additional workers to support the growing ranks of retirees. Immigrants to the United States tend to be of working age on arrival, which means they can begin contributing to the Social Security system as soon as they begin working. Immigrants also tend to consume fewer benefits than the native-born population, including fewer Social Security benefits. These two factors make increased immigration a powerful policy tool in the effort to maintain the Social Security program.

Immigration, while not a silver bullet, can mitigate this challenge by providing additional workers to support the growing ranks of retirees.