Social Security Contributions and Return Migration among Older Male Mexican Immigrants

Abstract

For decades scholars have attempted to understand the effects of immigration on the U.S. Social Security system. To date, this research has been primarily limited to migrants in the U.S. and does not consider those who return to their countries of origin. Immigrants often pay OASDI taxes using illegitimate Social Security numbers and may return to their home countries without collecting U.S. Social Security benefits. In this study, we analyze the socioeconomic and labor characteristics, health, migration histories, and transitions to retirement of male Mexican return migrants who contributed to the U.S. Social Security system. Using the 2003 and 2012 Mexican Health and Aging Study (MHAS), we find that in 2012, 32 percent of male return migrants reported having contributed to the U.S. Social Security system but only five percent of those who contributed, received or expected to receive benefits. Those who reported having contributed were more likely to have completed college, spent more years in the U.S., and were more likely to be U.S. citizens or legal permanent residents than those who did not contribute. We also find that return migrants who spent one to nine years in the U.S. had a lower probability of transitioning to retirement between 2003 and 2012 than those had never been to the U.S. In contrast, those who spent 20 or more years in the U.S. had a higher probability of transitioning to retirement.