The Economic Advantages of U.S. Citizenship

Written by on September 11, 2012 in Business, Entrepreneurship, Integration, USCIS with 1 Comment

Becoming a naturalized U.S. citizen has many benefits – citizens can vote and run for public office, bring family members to the U.S., hold certain jobs reserved for citizens, and they are protected from deportation.  There are also a range of economic benefits to citizenship, highlighted by the Migration Policy Institute (MPI) in their new report, The Economic Value of Citizenship for Immigrants in the United States.

MPI found that “naturalized citizens earn more than their noncitizen counterparts, are less likely to be unemployed, and are better represented in highly skilled jobs.”  The report also finds that naturalized citizens weathered the recession more successfully than noncitizens and native-born U.S. citizens.  For example, naturalized citizens experienced a 5 percent decline in median annual earnings, compared to 19 percent for noncitizens and 8 percent for native-born U.S. citizens.  Naturalized citizens earn 50-70 percent more than noncitizens, have higher employment rates, and are less likely to live below the poverty line.

What explains the difference?  Much of it is explained by the fact that naturalized citizens typically have higher education levels, speak English better, and have more work experience than noncitizens.  However, research indicates that in addition to those factors, there is a “citizenship premium,” meaning there is an economic benefit obtained from naturalization above and beyond the benefits of education level, language ability, and work experience.  Some reports have estimated that naturalized citizens may earn a wage premium of at least 5 percent, and this premium may be higher for women and Latino immigrants.

So why are eligible noncitizens failing to naturalize?  Approximately two-fifths of immigrants in the U.S. are naturalized U.S. citizens.  Of course, there are unauthorized immigrants and others who are ineligible to naturalize.  But approximately 8 million noncitizens are currently eligible to apply for citizenship but have not done so.

Some eligible noncitizens choose not to naturalize because they believe their existing nationality offers more benefits.  On the other hand, those who would like to naturalize face significant barriers; from concerns about passing the English language and U.S. history exams, to the time and money required to prepare for the exam and submit the application.

This report underlines the fact that, while it is sometimes overlooked, integration policies are important, and efforts to promote naturalization do not only benefit the immigrants themselves, but the community as whole.  Researchers Richard Florida and Charlotta Mellander found that nations who emphasize immigrant integration have higher levels of economic competitiveness, are more innovative, and have higher rates of entrepreneurship.

The MPI report reminds us that an investment in solid integration policies is an investment in our nation’s own well-being.

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