On Measuring Immigrant Income

Abstract

This brief draws on the case of Mexican immigrants, the most populous and constant remitting immigrant group in the United States, to show how remittances are a blind spot for US agencies, like the Census Bureau and IRS. Failing to account for remittance expenses likely leads to the overestimation of income and under-estimation of poverty rates in Mexican immigrant communities. Income and poverty figures of other consistent remitting immigrant groups, like other Latin American and Caribbean immigrants, may also be misestimated. There are two accessible ways to capture the impact of remittances: 1. the Census Bureau should alter the Supplemental Poverty Measure to account for international medical and childrearing expenses and 2. the IRS should allow foreign-born people to claim foreign-bound transactions of any sum that support caretaking, healthcare and education as deductions and account for them when adjusting taxable income. These changes would create a better economic portrait of immigrant communities and facilitate access to safety net programs.