What were the estimated contributions of undocumented immigrants to Social Security and Medicare in 2016 and 2020?
Executive summary
Multiple reputable studies point to nontrivial payroll-tax contributions from undocumented workers that bolster Social Security and Medicare, with most published estimates putting 2016 contributions at roughly $13 billion to Social Security and about $3 billion to Medicare (estimates vary by method); the sources provided do not include a firm, published 2020 dollar estimate, though later work shows those contributions rose by 2022 [1] [2] [3]. Reporting and academic work differ on scope and method—some report program-specific payroll-tax inflows, others report net contributions to health financing more broadly—so exact comparability across years is limited [3] [4] [2].
1. The commonly cited 2016 numbers and where they come from
A frequently cited figure comes from research aggregated by New American Economy and reported by Marketplace that estimated undocumented immigrants paid about $13 billion into Social Security and $3 billion into Medicare in 2016; those numbers have been echoed in multiple outlets and policy discussions [1]. Independent academic analyses of immigrant contributions to third-party health financing show undocumented immigrants accounted for the bulk of immigrants’ net contributions to health insurance and Medicare-related funding in 2016—one peer‑reviewed study estimated immigrants’ net contributions to third‑party payers were $48.2 billion in 2016 and identified undocumented immigrants as responsible for most or all of that net positive balance [3]. These different metrics—program payroll taxes versus net third‑party contributions minus expenditures—explain why headline numbers diverge across reports [3].
2. Why estimates differ: methods, data and definitional choices
Estimates vary because researchers use different data sources (CPS, MEPS, administrative tax tabulations), make different assumptions about undocumented workers’ use of forged or borrowed Social Security numbers, and choose different scopes—some isolate just payroll taxes attributed to Social Security or Medicare, others calculate net fiscal impact including health expenditures [4] [3] [5]. For example, a Medicare trust‑fund study calculated payroll-tax contributions by applying the 2.9% Medicare payroll tax to estimated undocumented earnings and adjusted for the share of earnings not subject to FICA; that produced contributions consistent with Trustees’ totals in earlier years [4]. Another body of work constructs annual tax‑payment series for the undocumented population and reported markedly larger totals for later years [2].
3. The 2020 gap: no single, authoritative number in the provided reporting
None of the supplied sources provides a clear, single estimate for undocumented immigrants’ specific contributions to Social Security and Medicare in calendar year 2020; the nearest year figures in the packet are 2016 estimates (Social Security ~$13B; Medicare ~$3B) and 2022 estimates from ITEP (Social Security $25.7B; Medicare $6.4B) which show an upward trajectory but are not a direct substitute for 2020 [1] [2]. Because 2020 was an anomalous year economically—pandemic labor disruptions, shifting employment and tax withholding—extrapolating from 2016 or 2022 without new, year‑specific analysis risks error; the available sources do not provide that year‑specific breakdown [2] [3].
4. Context, caveats and competing narratives
Policy and advocacy groups interpret these numbers through different lenses: immigration‑friendly analysts argue that undocumented payroll contributions improve trust‑fund solvency and are “unrequited” because many pay but cannot claim benefits (Newsweek/ITEP reporting; Tax Policy Center) while restrictionist outlets or groups sometimes emphasize illicit employment or fiscal costs in other domains [6] [2] [7]. Peer‑reviewed health‑economics work and Social Security actuarial notes emphasize that unauthorized workers’ payroll taxes have historically modest but measurable positive effects on Medicare and Social Security finances, though magnitude estimates depend on assumptions about tax compliance, coverage of earnings and eligibility for benefits [4] [5] [3].
5. Bottom line for 2016 and 2020
Best-supported published figures in the provided reporting place undocumented immigrants’ contributions in 2016 at roughly $13 billion to Social Security and $3 billion to Medicare (program‑specific payroll taxes), while broader health‑finance analyses show undocumented immigrants accounted for most of immigrants’ net contributions to third‑party payers in 2016 [1] [3]. The packet does not include a direct, vetted estimate for 2020; later estimates for 2022 show substantially higher payroll‑tax contributions (Social Security $25.7B; Medicare $6.4B), indicating growth but not providing a definitive 2020 number without additional data or modeling [2].