How much do U.S.-born children of undocumented immigrants affect Social Security and Medicare trust‑fund projections?
Executive summary
U.S.-born children of undocumented immigrants matter to Social Security and Medicare largely because they expand the future workforce that will pay payroll taxes; the Social Security Administration has explicitly modeled these indirect contributions for years [1]. That effect is real but modest relative to the programs’ long-term shortfalls: immigration (including children born here to immigrants) improves trust‑fund balances over 25–75 years, yet cannot on its own close the actuarial gaps identified by trustees and budget analysts [2] [3].
1. How the children factor into official projections
Social Security’s Office of the Chief Actuary recognizes two channels by which immigration affects the trust funds: direct contributions from foreign‑born workers today and the “indirect” contribution of their U.S.-born children who will become future workers; the SSA has modified methods to account for work activity and potential benefit receipt by unauthorized immigrants and their offspring [1]. The trustees’ long-range projections attribute virtually all projected growth in the U.S. labor force over coming decades to immigrants and their U.S.-born offspring under standard assumptions, meaning those children are central to population and worker‑to‑beneficiary ratios used in actuarial math [4].
2. How big the impact actually is — modest but measurable
Actuarial analyses consistently show that higher net immigration improves solvency measures: SSA actuaries and independent analysts find immigration narrows the trust‑fund deficit across 25, 50 and 75 years, and the trustees quantify the sensitivity (for example, an extra 100,000 net immigrants per year improves the 75‑year actuarial balance by roughly 0.1 percentage point of taxable payroll) — a meaningful but partial offset to projected shortfalls [2] [5]. Analysts from the Bipartisan Policy Center and the American Academy of Actuaries reiterate that while immigration slows depletion of reserves and raises the worker‑to‑beneficiary ratio, it only addresses a slice of the gap and cannot substitute for policy changes to benefits or taxes [6] [5].
3. Where the children show up in budget numbers
The Congressional Budget Office’s accounting of the 2021–2026 “surge” of other‑foreign nationals and their U.S.-born children attributes about $177 billion of additional mandatory spending over 2024–2034 to that group — though most of that cost is concentrated in refundable tax credits, Medicaid, and other programs rather than Social Security or Medicare, where the share is smaller [7]. In short, children born in the U.S. to undocumented parents are counted in demographic and budget baselines; they both increase near‑term demand for some programs and, in the long run, increase payroll tax bases that support Social Security and Medicare [7] [1].
4. Why the net effect often looks positive for pay‑as‑you‑go financing
Because immigrants and their U.S.-born children are on average younger and have higher labor‑force participation than the native‑born elderly, they tend in aggregate to pay payroll taxes during their working years and thus bolster pay‑as‑you‑go financing for Social Security and Medicare in the decades that follow [8] [9]. Several studies estimate undocumented and other foreign‑born workers contribute billions in payroll taxes without corresponding benefits (for example, estimated contributions to Social Security have been put in the low‑to‑tens of billions annually in past analyses), meaning some of the current receipts effectively strengthen the trust funds even if the payback to those workers is limited or delayed [10] [8].
5. Limits, tradeoffs, and competing narratives
Not all analysts agree on magnitude or policy implications: some voices caution immigration is not a panacea and that low fertility among both native and foreign‑born populations can limit long‑term gains, while others emphasize that deportation or sudden reductions in the foreign‑born workforce would worsen trust‑fund prospects [3] [11]. Sources have implicit agendas — advocacy groups highlight contributions and solvency benefits [11] [2], while critics stress that late‑arriving, low‑earning immigrants may impose net costs in their lifetimes and that sustained policy changes would be needed to convert population growth into durable solvency [3]. The reporting and actuarial work converge on one firm conclusion: U.S.-born children of undocumented immigrants improve projections modestly and measurably, but they are not a silver‑bullet solution to Social Security’s and Medicare’s structural funding problems [2] [5] [3].