This brief uses Wave 4 microdata from the 2014 Census Bureau’s Survey of Income and Program Participation that covers the use rates and dollar values of means‐​tested welfare and entitlement programs from January to December 2016. SIPP is a household‐​based survey constructed from a series of national panels, which represent respondents interviewed over a multiyear period who provided information on the relationship between their household income, participation in government programs, and household demographic data.4 Cato’s earlier policy brief on immigrant welfare consumption relied on data from the Census Bureau’s Annual Social and Economic Supplement of the Current Population Survey (CPS) for the year 2016. This brief reexamines the year 2016 with SIPP data because it is superior to CPS data: SIPP accounts for more welfare programs than the CPS, includes more‐​detailed demographic data, and is less subject to underreporting of welfare use and benefit levels.

There are several steps to calculating the value of per capita welfare consumption by both immigrants and native‐​born Americans. First, SIPP is used to calculate the total dollar value of welfare per program used by immigrants and native‐​born Americans. Second, the SIPP population data is used to produce the per capita amount of welfare consumed for each program. Third, the weighted proportion of all welfare benefits used by immigrants and native‐​born Americans is calculated. Fourth, adjustments are made for underreporting of welfare consumption—a major problem in all surveys—by multiplying the weighted proportion in step three by the actual budget outlays for welfare programs in 2016 according to the U.S. budget.5 Step four assumes that native‐​born Americans and immigrants underreport welfare consumption at the same rate. Fifth, the product from the fourth step is divided by the real population of native‐​born Americans and immigrants as reported by the Current Population Survey. The result is the per capita welfare cost for immigrants and native‐​born Americans for each welfare and entitlement program.

In order to understand our results, it is necessary to account for nuances in welfare program eligibility in the SIPP dataset. Program eligibility and the value of benefits received are based on either the individual level or the household level, a concept known as the unit of assistance. Individuals are the unit of assistance for Medicaid, SSI, SSB, and Medicare. The household is the unit of assistance for WIC, TANF, and SNAP. The SIPP data set does not allow us to divide the welfare benefits legally received by the members of a household for programs with a household unit assistance, so we divide the benefits from WIC, TANF, and SNAP equally among all members of the household.

Other studies evaluating immigrant welfare participation and consumption use the household as the unit of analysis.6 We dispute this approach because many spouses and children of immigrants are native‐​born Americans. Counting native‐​born welfare consumption as immigrant consumption improperly inflates estimates of immigrant welfare use and deflates native‐​born consumption. Moreover, this approach reduces use rates and benefit levels for means‐​tested welfare and entitlement programs that have an individual unit of assistance.7 A recent rule by the Homeland Security Department firmly sides with our preferred measure of using an individual unit of assistance rather than the flawed household approach.8

Because SIPP does not record the dollar amount of Medicaid and Medicare benefits expended per user, we relied on the 2016 Medical Expenditure Panel Survey (MEPS) to quantify the per user expenditure rate. We first selected individuals who reported Medicare and/​or Medicaid coverage in 2016. We then identified the individuals who reported consuming healthcare services that account for most healthcare expenditures: hospital stays, prescription medication use, and physician visits.9 The per user expenditure rate for Medicaid and Medicare benefits did not alter our results.10