Mexican Workers in the United States: A Comparison with Workers from Social Security Totalization Countries (CRS Report for Congress)
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| Release Date |
Revised Sept. 6, 2005 |
| Report Number |
RL33015 |
| Report Type |
Report |
| Authors |
Alison Siskin and Gerald Mayer, Domestic Social Policy Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
On June 29, 2004, the United States and Mexico signed a Social Security totalization agreement,
the
effects of which depend on the yet to be disclosed language of the agreement. A totalization
agreement coordinates the payment of Social Security taxes and benefits for workers who divide
their careers between two countries. The agreement has not been transmitted to Congress for review,
which is required under law before the agreement can go into effect. This report does not attempt
to estimate the potential cost of a totalization agreement with Mexico, or reach a conclusion on the
effects of such an agreement on U.S. workers and employers. Instead this report explores one of the
issues concerning such an agreement. Using different socio-economic characteristics, the report
compares persons born in Mexico and living in the United States (both naturalized U.S. citizens and
noncitizens) with persons born in the current totalization countries and living in the United States.
The Social Security program provides monthly cash benefits to qualified retired and disabled
workers, their dependents, and survivors of deceased workers. Generally, a worker must have 10
years of Social Security-covered employment to be eligible for retirement benefits (less time is
required for disability and survivor benefits). Most jobs in the United States are covered under
Social Security. Noncitizens (aliens) who work in Social Security-covered employment must pay
Social Security payroll taxes, including those who are in the United States working temporarily and
those who may be working in the United States without authorization. There are some exceptions.
Generally, the work of aliens who are citizens of a country with which the United States has a
"totalization agreement" is not covered by Social Security if they work in the United States for less
than five years. In addition, by statute, the work of aliens under certain visa categories is not covered
by Social Security. Currently, since Mexico meets the definition of a "social insurance country," a
Mexican worker may receive U.S. Social Security benefits outside the United States. Family
members of the Mexican worker must have lived in the United States for at least five years to receive
benefits outside the United States, but typically under a totalization agreement this requirement is
waived.
This report concludes that the Mexican population in the United States has a different
socio-economic profile than both U.S. citizens and persons (both naturalized U.S. citizens and
noncitizens) from current totalization countries. Workers from totalization countries tend to have
more education and higher earnings than workers born in the United States or in Mexico.
Noncitizens from Mexico tend to be younger and have higher labor force participation rates than
naturalized U.S. citizens from Mexico, and other U.S. citizens. In addition, Mexican noncitizens
and naturalized U.S. citizens from Mexico in the U.S. labor force tend to have more dependents in
their U.S. households. Because Mexican workers may have lower lifetime earnings, they may
receive a higher replacement rate, relative to the payroll taxes they pay, than workers with higher
lifetime earnings, such as U.S. citizens and noncitizens from the totalization countries. This report
will not be updated.
