The Effect of Immigration on the Living Arrangements of Elderly Natives

Abstract

The elderly overwhelmingly desire to age in place (not live in a nursing home), and the workforce supporting aging in place has a relatively high share of low-skill immigrants. This paper examines the impact of low-skill immigration on elderly living arrangements using individual-level data from the 1980-2000 Censuses. Exploiting the tendency of new immigrants to migrate to existing settlements of immigrants from the same birthplace, I use a two-stage least squares (2SLS) strategy to identify the causal effect of immigration on the living arrangements of native elderly. A 1 percentage-point increase in low-skilled immigration increases the probability that an elderly native will age in place by 0.04 percentage points and increases the probability of supported aging in place (aging in place with assistance from someone other than a spouse) by 0.30 percentage points. Consistent with a migration-induced cost reduction in aging in place, a 1 percentage point increase in low-skilled immigration also reduces the wages of all low-skilled workers in private households by 1.03%. My results suggest that low-skilled immigration is an effective way to increase aging in place which may improve quality of life and lower total healthcare costs.

Keywords: Aging in place, home- and community-based services (HCBS), caregiving, aging, elderly, immigration

JEL Classification: I11, J14, J61