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The growing immigrant share of the U.S. population was neither the sole, nor even the most important, factor in the relatively flat poverty rate from 1989 to 1999; in fact, poverty rates fell faster for immigrants than for natives
Recently released data from the 2000 census show that the Nation's poverty rate fell less than 1 percentage point, from 13.1 percent to 12.4 percent, between 1989 and 1999.1 In some States, including California and New York, the poverty rate was higher in 1999 than in 1989. In addition, some areas of the country posted only small increases in real median family income, even given the strong economy of the latter 1990s. For example, census data reveal that median annual family income in New York grew only $113 (0.2 percent) in real terms over the decade.
Media coverage has attributed the findings regarding poverty chiefly to the effects of a growing immigrant population composed of many low-income families.2 The idea is that, because the immigrant share of the population increased from 1989 to 1999, and because immigrants' incomes are, on average, lower than natives', overall income growth was subject to a downward pressure over the decade, a phenomenon referred to in this article as the share effect. The question, however, is whether the share effect does in fact implicate immigration as the sole, or even the most important, factor behind the census figures. Without more evidence, the role of immigration in what are essentially flat poverty statistics remains open.
The needed evidence is at least twofold. First, the magnitude of the share effect must be quantified; that is, how much did the increase in the share of the immigrant population lower real income or raise the poverty rate? Second, the impact of the share effect can be offset by trends in immigrants' own income and poverty status, herein called the income effect. Thus, analysts need to quantify this effect as well, to learn whether and by how much it contributed to changes in real income or the poverty rate.
In a period such as the 1990s, when both the population share and the incomes of immigrants rose, the question of immigration's impact can be viewed as the outcome of a race between the share and...