The Earnings and Social Security Contributions of Documented and Undocumented Mexican Immigrants

Publication Date: January 2011

Publisher: Center for Retirement Research at Boston College

Author(s): Gary Burtless; Audrey Singer

Research Area: Labor; Population and demographics

Keywords: Social Security

Type: Report

Coverage: Mexico United States


Using information supplied by immigrants interviewed by the Mexican Migration Project (MMP) we analyze the Social Security coverage of jobs held by legal and other-than-legal Mexican immigrants who work in the United States. Our analysis suggests that about half the Mexican-born migrants residing in the United States who are wage earners and heads of household earn their incomes in jobs that are not covered by Social Security. Since workers in uncovered jobs tend to earn below-average wages, their earnings account for less than half the wages earned by Mexican immigrants. Evidence from the MMP survey shows that Social Security coverage is higher among Mexican immigrants who are authorized to live in the United States than it is among undocumented Mexican immigrants. Coverage among working legal permanent residents is less than 75 percent, but the coverage rate among undocumented workers is even lower, about 25 percent. Based on annual earnings reports in the March CPS we estimate that in 2007 about 1.4 percent of all U.S. wages, or $87 billion, was earned by Mexican immigrant heads of household. Our estimates imply that about 52 percent of this total was earned in Social-Security-covered jobs while the remainder, about $41 billion, was earned in jobs not covered by Social Security. The MMP surveys show that only a small proportion of undocumented migrants report a change in their legal status that allowed them to live and work legally in this country. Two-thirds of legalizations occurred within five years of the enactment of the Immigration Reform and Control Act in 1986. In the absence of this kind of special legislation, only a small percentage of undocumented workers is likely to be granted permanent residency status in the future. Thus, the Social-Security-covered wages of most of the undocumented workers who earn them will never result in an increased claim for Social Security benefits.