The Social Security program provides monthly cash benefits to retired and disabled workersand their dependents, and to the survivors of deceased workers. (2) To qualify for benefits,generally workers (whether citizens or noncitizens (3) ) must work in Social Security covered jobs for 10 years (4) (less time is needed fordisability and survivor benefits, depending on the worker's age). Noncitizens must also meet othereligibility requirements discussed below. The Social Security program is financed primarily by mandatory payroll taxes levied onwages and self-employment income, which are paid by the worker and the worker's employer. Noncitizens, or aliens, who work in Social Security-covered employment must pay Social Securitypayroll taxes, including those who are in the United States working temporarily and those who maybe working in the United States without authorization. (5) There are some exceptions. (6) Generally, the workof alienswho are citizens of a country with which the United States has a "totalization agreement" (see below)is not covered by Social Security if they are sent by a firm in their home country to work in theUnited States for fewer than five years. Most jobs in the United States are covered under SocialSecurity (about 96% of the work force is required to pay Social Security payroll taxes). (7) Benefit Formula. Social Security benefits arecomputed by applying a benefit formula to the worker's lifetime taxable earnings, indexed to reflectthe growth in average wages over time. An average monthly earnings amount (known as theworker's Average Indexed Monthly Earnings or AIME) is computed based on the 35 highest yearsof covered earnings. (8) The Social Security benefit computation formula is progressive, as it uses "bend points" toreturn higher percentages of a lower-wage worker's lifetime indexed earnings, computed on amonthly basis. For 2005, the bend points used in the benefit formula are $627 and $3,779 permonth. (9) If all or most ofa worker's indexed earnings fall under the first or second bend point, they will see a higherreplacement rate of average monthly earnings as compared to those whose earnings are above thebend points. This is often referred to as the "tilt" in the Social Security benefit formula. (10) Due to a recent change in the law, (11) a noncitizen who files an application for benefits based on aSocial Security Number (SSN) assigned on or after January 1, 2004, is required to have workauthorization at the time an SSN is assigned, or at some later time, to gain insured status under theSocial Security program. If the individual was authorized at some point to work in the United states,all of his/her Social Security-covered earnings will count toward insured status. If the individualwas never authorized to work in the United States, none of his/her earnings will count toward insuredstatus. (12) A noncitizenwho files an application for benefits based on an SSN assigned before January 1, 2004, is not subjectto the work authorization requirement. All of the individual's Social Security-covered earnings willcount toward insured status, regardless of his/her work authorization status. (13) Because Social Security is an earned entitlement program, there are few restrictions onbenefit payments once a worker becomes entitled to benefits. Nonetheless, noncitizens in the UnitedStates must be "lawfully present" to receive benefits in the United States. (14) If a noncitizen is entitledto benefits, but does not meet the lawful presence requirement, his/her benefits are suspended. Insuch cases, a noncitizen may receive benefits while residing outside the United States (includingbenefits based on work performed in the United States while the alien lacked authorization to work)if he/she meets one of the exceptions to the " alien nonpayment provision ." (15) Under the aliennonpayment provision, a noncitizen's benefits are suspended if he/she remains outside the UnitedStates (16) for more thansix consecutive months, unless one of several broad exceptions is met. For example, an alien'sbenefits are not suspended if he or she is a citizen or resident of a country with which the UnitedStates has a totalization agreement or a citizen of a country that has a social insurance or pensionsystem under which benefits are paid to eligible U.S. citizens who reside outside the country (i.e.,a "social insurance country"). Mexico is a social insurance country. To receive payments outside the United States, alien dependents and survivors must havelived in the United States for at least five years previously (lawfully or unlawfully), and the familyrelationship to the worker must have existed during that time. The law provides several broadexceptions to the five-year U.S. residency requirement. For example, the residency requirement fordependents and survivors does not apply if the alien is a citizen or resident of a country with whichthe United States has a totalization agreement. (17) The Social Security Act (18) authorizes the President to enter into a totalization agreementwith another country to coordinate the collection of payroll taxes and the payment of benefits undereach country's Social Security system for workers who split their careers between the two countries. Without a totalization agreement, an individual who is sent by a U.S. company to work in a foreigncountry (and his or her employer) must contribute to the Social Security systems of both countries,resulting in dual Social Security coverage and taxation based on the same earnings. In most cases,totalization agreements allow workers (and their employers) to contribute only to the foreign systemif the worker is employed abroad for five or more years, or only to the system in their home countryif the worker is employed abroad for fewer than five years. Totalization agreements also allow workers who divide their careers between two countriesto combine earnings credits under both Social Security systems. Thus, a worker who may lacksufficient coverage to qualify for benefits under either program may, under a totalization agreement,qualify for benefits under one or both systems. The benefits of workers who are allowed to combineearnings credits are prorated to reflect the number of years the worker paid into each system. Thesame treatment applies to foreign workers in the United States. Since 1978, the United States has entered into totalization agreements with 20 countries: Australia, Austria, Belgium, Canada, Chile, Finland,France, Germany, Greece, Ireland, Italy, South Korea, Luxembourg, Netherlands, Norway, Portugal,Spain, Sweden, Switzerland, and the United Kingdom. In addition, the United States has signed totalization agreements with Japan (February 19,2004) and Mexico (June 29, 2004). Once an agreement is signed it is sent to the Secretary of Stateand then to the President for review. The President may then transmit the agreement to Congressfor review. The Social Security Act requires the President to submit to Congress the text of theagreement and a report on (1) the estimated number of individuals who would be affected by theagreement and (2) the estimated financial impact of the agreement on programs established by theSocial Security Act. A totalization agreement automatically goes into effect unless the House ofRepresentatives or the Senate adopts a resolution of disapproval within 60 session days of theagreement's transmittal to Congress. (19) The agreement with Japan was transmitted to Congress onNovember 17, 2004, and according to Congressional Research Service (CRS) calculations, the 60session days for congressional action expired on April 26, 2005. The agreement with Mexico hasnot been transmitted to Congress and, reportedly, is still undergoing review at SSA. The remainder of this report uses different socio-economic characteristics to compare personsborn in Mexico and living in the United States with persons born in the current totalization countriesand living in the United States. Individuals born in Mexico and living in the United States includeboth naturalized U.S. citizens and noncitizens. The analysis begins with an overview of selectedpopulation and social characteristics and then focuses on various characteristics of persons in thelabor force. The data used in this study are from the March 2004 supplement of the Current PopulationSurvey (CPS), the main source of labor force data for the nation. The CPS is a household surveyconducted by the Census Bureau for the Bureau of Labor Statistics (BLS). (For a full discussion ofthe CPS and the methodology, see Appendix B .) For the purpose of this study, respondents fromthe current totalization countries are treated as one group. Luxembourg is not included in theanalysis because the CPS does not have a separate code for that country. Japan is not included inthe analysis because the totalization agreement with Japan has not yet gone into effect. Althoughthe analysis treats individuals from different totalization countries as one group, there may bedifferences in socio-economic characteristics among the countries. This variation is explored in Appendix A for the countries with large enough samples to be representative. The comparisons in this report are based on five groups residing in the United States: (1)U.S. citizens, (2) noncitizens from Mexico, (3) naturalized U.S. citizens from Mexico, (20) (4) noncitizens fromtotalization countries, and (5) naturalized U.S. citizens from the totalization countries. (21) The group of U.S. citizensexcludes naturalized U.S. citizens from Mexico and the current totalization countries. Although oneof the issues surrounding the totalization agreement with Mexico is the large number of unauthorizedMexicans living in the United States compared to the unauthorized alien population from thetotalization countries, it is not possible, using CPS data to differentiate between aliens who are inthe United States legally and those who are unauthorized. (22) Nor is it possible to differentiate between different categoriesof noncitizens (e.g., legal permanent residents, temporary workers, students, refugees, asylees, etc.). In addition, it is unknown how many of the Mexican noncitizens and naturalized U.S. citizens fromMexico in the sample would still qualify for Social Security benefits without a totalizationagreement. The population characteristics analyzed in this paper were chosen because they relate toaspects of the Social Security benefit formula (e.g., income and factors that affect income) oreligibility (e.g., age, number of dependents). The comparisons discussed in the text of this reportare statistically significant at the 95% confidence level, unless stated otherwise. (23) , (24) Table 1. Estimated Resident Population by Citizenship Statusand Gender, March 2004 (in 000s) Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Population. The number of Mexican-bornnoncitizens and naturalized citizens residing in the United States is much higher than thecomparative populations from totalization countries. Table 1 shows that the number of Mexicannationals living in the United States is five times larger than the number of citizens from alltotalization countries combined. In addition, there are approximately 185,000 more naturalized U.S.citizens from Mexico living in the United States than the number of naturalized U.S. citizens fromall totalization countries combined. Gender. Table 1 also shows that, more than anyother group, Mexican noncitizens are more likely to be male (56.3%). On the other hand,noncitizens and naturalized citizens from the totalization countries are more likely to be female(54.3% and 56.6%, respectively). A possible reason for the higher percentage of females amongnaturalized citizens from totalization countries is that over a third (37.6%) of the population is age65 and over, and the proportion of females is greater among those 65 and older for all populationgroups in the United States (see Figure 1 for the age distributions of the populations). Figure 1. Distribution of Population by Citizenship Status and Age, March 2004 Age. As Figure 1 illustrates, Mexicannoncitizens tend to be younger than noncitizens from the totalization countries: only 15.8% are 45or older, compared to 36.5% of noncitizens from the totalization countries. Mexican noncitizensalso tend to be younger than U.S. citizens and naturalized U.S. citizens from Mexico and thetotalization countries. Naturalized citizens, both from Mexico and totalization countries, tend to beolder than their noncitizen counterparts. In general, noncitizens must reside in the United States forfive years as legal permanent residents before applying for citizenship. U.S. citizens, more than any of the other groups, are the more likely to be under the age of16: 23.8% of the U.S. population is under the age of 16, compared to 11.2% of Mexican noncitizensand 8.9% of noncitizens from totalization countries. Very few of the naturalized U.S. citizens fromMexico (1.4%) or from the totalization countries (2.4%) are under the age of 16, (25) due to the fact that aliensmust have continuously resided in the United States as legal permanent residents (LPRs) for fiveyears before naturalizing, and that children born in the United States to noncitizen parents are, bybirth, U.S. citizens. (26) However, 19.5% of Mexican noncitizens are between the ages of 16 and 24, compared to 12.4% ofU.S. citizens, 10.6% of noncitizens from totalization countries, 5.4% of naturalized U.S. citizensfrom Mexico, and 3.9% of naturalized citizens from totalization countries. One-third ( 33.0%) of the Mexican noncitizens are between the ages of 25 and 34, and themajority of Mexican noncitizens are between the ages of 25 and 44 (56.3%). Comparatively, only21.4% of noncitizens from totalization countries, 12.4% of U.S. citizens, 17.9% of naturalizedMexicans, and 6.2% of naturalized citizens from totalization countries are between the ages of 25and 34. (27) In addition,unlike Mexican noncitizens, no other group has a majority of their members between the ages of 25and 44. The closest is the naturalized Mexicans of whom 49.2% are between the ages of 25 and 44. Conversely, the majority of naturalized U.S. citizens from totalization countries are over the age of54 (58.5%) while only 6.7% of Mexican noncitizens are over the age of 54. The percentages of U.S.citizens, naturalized U.S. citizens from Mexico, and noncitizens from totalization countries over theage of 54 are similar (22.8%, 22.3%, and 21.2%, respectively). Education. Figure 2 shows that, in general,noncitizens from totalization countries are substantially better educated than the other comparisonpopulations. Mexican noncitizens and naturalized citizens from Mexico tend to have the lowestlevels of educational attainment. Figure 2 shows that 65.1% of the Mexican noncitizens in theUnited States over the age of 18 have less than a high school diploma, while only 3.2% have aBachelor's or advanced degree. By comparison, 11.2% of noncitizens from totalization countrieshave less than a high school diploma, while 42.2% have a college or advanced degree. Similarly,31.6% of Mexican noncitizens have a high school degree or some college, while 46.6% ofnoncitizens from totalization countries have a high school degree or some college. Figure 2. Distribution of Population Ages 18 and Over by Citizenship Status and EducationalAttainment, March 2004 Naturalized U.S. citizens from Mexico are much more likely than naturalized U.S. citizensfrom totalization countries to have less than a high school diploma (51.6% compared to 18.3%) andmuch less likely to have a Bachelor's or advanced degree (8.8% versus 28.5%). In addition, 39.6%of naturalized U.S. citizens from Mexico have a high school degree or some college, compared to53.2% of naturalized U.S. citizens from totalization countries. Comparatively, for U.S. citizens13.0% have less than a high school diploma, 61.3% have a high school degree or some college, and25.8% have a college or advanced degree. (28) Labor Force Participation Rates. As shown in Figure 3 , the labor force participation rates of Mexican noncitizens (69.5%) is higher than that ofnoncitizens from the totalization countries (61.6%), U.S. citizens (65.5%), and naturalized U.S.citizens from the totalization countries (49.4%). In addition, the labor force participation rates ofnoncitizens from totalization countries is lower than that of U.S. citizens. The labor forceparticipation rates of Mexican noncitizens and naturalized U.S. citizens from Mexico are notstatistically different (69.5% versus 68.2%). One of the reasons for the differences in labor forceparticipation rates may be due to differences in the age distributions of the different citizenshipgroups: 86.1% of Mexican noncitizens and 87.4% of naturalized Mexicans are between the ages of16 and 64, compared to 63.9% of U.S. citizens. One reason for the low labor participation rateamong naturalized citizens from the totalization countries is that over a third of persons in this groupare 65 or older, and, in general, labor force participation is lower for older persons. (See Figure 1 .) Figure 3. Labor Force Participation Rate and Unemployment Rate by CitizenshipStatus, March 2004 Unemployment Rates. Figure 3 also shows thatfor persons 16 and over, the unemployment rate is higher for Mexican noncitizens (8.2%) than fornoncitizens from totalization countries (4.5%) and U.S. citizens (6.0%), as well as for naturalizedU.S. citizens from Mexico (5%). Naturalized U.S. citizens from totalization countries have thelowest unemployment rate (2.7%) of all the groups. (29) Labor Force Participation by Age. Labor forceparticipation rates vary by age. One of the reasons for the higher overall labor force participationrate of Mexican noncitizens is that participation rates are higher among the youngest (ages 16 to 24)and oldest groups of workers (age 65 and older). Figure 4 shows that, for persons 65 and over, thelabor force participation rate of Mexican noncitizens is higher than that of any other group. Thelabor force participation rate for persons 65 and older is twice as high for Mexican noncitizens asfor noncitizens from totalization countries (22.1% compared to 11.0%). In addition, the labor forceparticipation rate for Mexican noncitizens between the ages of 16 and 24 is much higher than thatof noncitizens from totalization countries (66.5% versus 37.3%). Mexican noncitizens between theages of 25 and 64 are less likely than U.S. citizens to be in the labor force. Figure 4. Labor Force Participation Rate by Age and Citizenship Status, March 2004 Unemployment Rates by Age. Theunemployment rate for noncitizens from totalization countries is lower than that of noncitizens fromMexico for those 25 to 34 years old, and 45 to 54 years old (see Figure 5 ). In addition, Mexicannoncitizens between the ages of 25 to 64 have higher unemployment rates than U.S. citizens of thesame ages. (30) Conversely, 16 to 24 year old Mexican noncitizens have lower unemployment rates than their U.S.citizen counterparts. Figure 5. Unemployment Rates by Age and Citizenship Status Gender of Persons in the Labor Force. For eachcitizenship group, men account for the largest share of persons in the labor force. Among Mexicannoncitizens, 72.4% of persons in the labor force are men (see Figure 6 ). This percentage comparesto 53.1% for noncitizens from totalization countries. Among naturalized citizens from Mexico,59.8% of persons in the labor force are men, compared to 53.6% of naturalized citizens fromtotalization countries. As is well documented, women tend to earn 76-79 cents for every dollarearned by men, and, on average, earn less than men over the life course. (31) In addition, due to thestructure of the Social Security benefit formula, lower earners receive a higher replacement rate ontheir contributions. Figure 6. Gender by Citizenship Status for Those in the Labor Force Disabled Workers. Table 2 shows thatnoncitizens from Mexico and noncitizens from totalization countries have similar proportions of thepopulation who are not in the labor force due to disability (2.1% and 1.6%, respectively). Thepercentage (4.8%) of U.S. citizens who are not working because a disability is greater than thepercentage of noncitizens from both Mexico and the totalization countries, and naturalized U.S.citizens from the totalization countries (2.8%). Naturalized U.S. citizens from Mexico have thehighest percentage (5.9%) of workers not in the labor force due to disability. (32) The lower percentage ofMexican noncitizens who are not in the labor force because of disabilities may be due to severalfactors. Mexican noncitizens tend to be younger (and, therefore, perhaps healthier) than workersfrom other citizenship groups. Persons with disabilities may not come to the United States to work. Persons who become disabled while in the United States may return to their native countries. (33) Table 2. Estimated Percent of Persons Not in the Labor ForceBecause of a Reported Disability, by Citizenship Status, March 2004 Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). Note: Estimates are for persons 16 and over and do not include retired persons. a. Estimates for totalization countries do not include Luxembourg. Earnings. Among the five citizenship groups,Mexican noncitizens tend to have lower annual earnings than workers in the other citizenship groups. Figure 7 shows that the median annual earnings for noncitizens from totalization countries are morethan twice the median earnings for noncitizens from Mexico ($15,600 compared to $32,000). Themedian annual earnings of naturalized citizens from totalization countries are $10,000 more than themedian earnings of naturalized U.S. citizens from Mexico ($32,000 compared to $22,000). Themedian earnings ($32,000) of citizens and noncitizens from the totalization countries are also higherthan the median earnings of U.S. citizens ($27,000). (34) As illustrated in Figure 7 , the majority (63.8%) of employed Mexican noncitizens in theUnited States earned under $20,000 in 2003, and were more likely than any other citizenship groupto earn less than $20,000. Forty-three percent of naturalized U.S. citizens from Mexico earned lessthan $20,000, compared to 36.4% of U.S. citizens and 30.5% of noncitizens from totalizationcountries. Conversely, noncitizens from the totalization countries had the highest concentration ofperson earning $80,000 or more. While 15.2% of noncitizens from totalization countries earned atleast $80,000, only 8% of U.S. citizens, 1.5% of naturalized U.S. citizens from Mexico, and 0.7%of Mexican noncitizens earned the same amount. (35) Figure 7. Distribution of Employed Persons and Median Earnings by CitizenshipStatus and Annual Earnings, 2003 As discussed above, under the Social Security benefit in 2005, Social Security-coveredworkers and their employers each pay 6.2% of earnings up to $90,000 (this amount is indexed toaverage wage growth). Thus, higher wage workers pay more into the system than lower wageworkers (unless both workers are earning over $90,000). Nonetheless, the Social Security benefitformula is "tilted" so that lower wage workers receive a higher replacement rate in Social Securitybenefits than workers with higher lifetime earnings. Occupations. Several factors may affect relativeearnings, including work experience, education, gender, industry and occupation, and hours worked. Figure 1 above showed that Mexican noncitizens tend to be younger and, therefore, have less workexperience than persons from other citizenship groups. Figure 3 showed that the educationalattainment of Mexican noncitizens tends to be lower than that for persons in other citizenship groups. Table 3 shows that the highest concentration of Mexican noncitizens (30.4%) and naturalizedU.S. citizens from Mexico (22.3%) work in service occupations, many of which pay lower wagesthan other occupations. Comparatively, 10.4% of noncitizens from totalization countries, 13.2% ofnaturalized U.S. citizens from totalization countries, and 15.1% of U.S. citizen workers are in serviceoccupations, and there is no statistical difference between the concentration of service workers inthe three groups. Noncitizens from totalization countries (23.1%) are more likely than noncitizensfrom Mexico (10.4%) to be in sales and office occupations, while U.S. citizens (26.8%) are morelikely than both groups to be in these occupations. By contrast, noncitizens from totalizationcountries have the highest concentration of workers in professional occupations (28.0%), while only2.2% of Mexican noncitizens and 9.3% of naturalized U.S. citizens from Mexico work inprofessional occupations. A similar percentage of U.S. citizens (21.4%) and naturalized U.S.citizens from totalization countries (22.3%) are in professional occupations. Furthermore, a higher percentage of noncitizens from totalization countries, U.S. workers,and naturalized U.S. citizen workers from totalization countries are in management, business, andfinancial occupations than noncitizens and naturalized U.S. citizens from Mexico: 21.3% ofnoncitizens from totalization countries and 21.2% naturalized U.S. citizens from totalizationcountries are in management, business, and financial occupations compared to 15.4% of U.S.citizens, 5.9% of naturalized U.S. citizens from Mexico, and 2.9% of noncitizens from Mexico. (36) The second highest occupational concentration of Mexican noncitizen workers occurs inconstruction and extraction occupations, with 21.3% of the workers in those occupations. Amongnaturalized U.S. citizens from Mexico, 10.2% are in construction occupations, while the percentageof U.S. citizen workers, noncitizens from totalization countries, and naturalized U.S. citizen workersfrom totalization countries is significantly less (5.0%, 6.1%, and 4.6%, respectively). Similarly, theconcentration of naturalized U.S. citizens from Mexico, and noncitizens from Mexico in productionoccupations (37) is morethan two times higher than the concentration of U.S. citizen workers, noncitizens from totalizationcountries, and naturalized U.S. citizen workers from totalization countries in production occupations. Table 3. Distribution of Employed Persons by Citizenship Statusand Occupation, March 2004 (persons ages 16 and over) Source: Calculated by CRS from the March 2004 Current Population Survey (CPS). Note: Details may not add to totals because of rounding. For a definition of the occupational groupssee U.S. Department of Labor, Bureau of Labor Statistics, Standard Occupational ClassificationSystem , available at http://www.bls.gov/soc/home.htm . a. Estimates for totalization countries do not include Luxembourg. Full-Time/Part-Time Status. Figure 8 shows that,in March 2004, the majority of employed persons for all citizenship groups usually work full-time. Although Mexican noncitizens earn less than workers in the other citizenship groups, they (as wellas naturalized citizens from Mexico) are more likely than workers in other groups to work full-time: 88.5% of Mexican noncitizens and 90.9% of naturalized Mexican citizens work full-time. Thepercentages of noncitizens and naturalized citizens from totalization countries who work full-timedo not differ significantly from each other (82.6% and 83.7%, respectively) or from the rate for U.S.citizens (80.9% usually work full-time). Figure 8. Distribution of Employed Persons by Citizenship Status and Full-Timeand Part-Time Employment, March 2004 Arrival Year. In general, naturalized U.S. citizensfrom Mexico and the totalization countries have been in the United States longer than theirnoncitizen counterparts (see Figure 9 ). Nonetheless, naturalized U.S. citizens from totalizationcountries were more likely to arrive prior to 1986 than naturalized U.S. citizens from Mexico (83.6%compared to 71.4%). In addition, naturalized U.S. citizens from Mexico (6.0%) were more thanthree times as likely to have arrived after 1995 than naturalized U.S. citizens from totalizationcountries (1.9%), although the percentages are small in both cases. Similarly, noncitizens fromtotalization countries were more likely than noncitizens from Mexico to have arrived prior to 1975(16.1% versus 5.8%); and they were slightly less likely than Mexican noncitizens to have arrivedafter 1995 (37.6% compared to 43.5%). Research has shown that the earning of noncitizens arecorrelated to the length of time an alien is in the United States, with those who have been in theUnited States longer having higher earnings. (38) Figure 9. Arrival Year for Those in the Labor Force Over Age 16 for Naturalized U.S.Citizens and Noncitizens from Mexico and Totalization Countries Dependents. Mexican noncitizens in the laborforce have a higher average number of dependents residing in the United States (1.7) thannoncitizens from totalization countries (1.4). U.S. citizens and naturalized U.S. citizens fromtotalization countries have an average of 1.2 and 1.3 dependents, respectively. Naturalized U.S.citizens from Mexico average 2.0 dependents, which is the highest average number of dependentsfor any of the citizenship groups. Among persons in the labor force who have at least one dependent(i.e., excluding persons living alone or with unrelated persons), Mexican noncitizens average 2.4dependents, which is similar to the average number of dependents for naturalized U.S. citizens fromMexico (2.3), and higher than the average number of dependents for noncitizens and naturalized U.S.citizens from totalization countries (1.9 and 1.6), and U.S. citizens (1.8). Table 4. Estimated Number of Dependents Residing in theUnited States Per Worker, by Citizenship Status, March 2004 Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Families consist of persons living together and related by birth, marriage, or adoption and, incolumn 1, include persons living alone or with unrelated individuals. In column 2, familiesare groups of two or more related persons. A household may include more than one family. Dependents include spouses, children under 18, full-time high school students under the ageof 19, and persons over 18 with disabilities. b. Estimates for totalization countries do not include Luxembourg. The average number of dependents for noncitizens from Mexico and the totalizationcountries may be higher than the figures shown in Table 4 . As shown above, 72.4% of Mexicannoncitizens in the labor force are male (compared to 53.1% of noncitizens from the totalizationcountries). Among these men, 8.0% report that they are married but that their spouse is not livingin their U.S. household. The spouse may be elsewhere in the United States or in Mexico (or inanother country). Only 1.3% of noncitizen men from the current totalization countries report thatthey are married but that their spouse is absent. Children may be living with the absent spouse. Thus, the average number of dependents may be higher than shown above for noncitizens fromMexico and the totalization countries, as dependents not residing in the United States are notcaptured in the CPS. As discussed above, under the Social Security Act, noncitizens who have notresided in the same relationship with the worker in the United States for five years are not eligiblefor dependents or survivors benefits while residing outside the United States. But the five-yearrequirement is waived for citizens from countries with totalization agreements, allowing dependentand survivor benefits to be paid to persons who have never lived in the United States. In addition to being much larger than the population of persons from the totalizationcountries in the United States, the Mexican population -- both noncitizens and naturalized citizens-- in the United States has a different socio-economic profile than U.S. citizens and persons in theUnited States from totalization countries. Individuals from totalization countries tend to have moreeducation and higher earnings than persons from Mexico and the United States. The populationfrom Mexico tends to be younger and more heavily male. A smaller proportion of the Mexicannoncitizen population is not in the labor force because of disability and their labor force participationrates are higher. Mexican persons 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 higherreplacement rate in Social Security benefits than workers with higher lifetime earnings. The fact thatMexican noncitizens tend to spend more years in the labor force does not mean that they contributemore to the Social Security system than noncitizens from totalization countries who have, onaverage, higher incomes. The current totalization countries are not a homogenous group. This section of the reportexplores socio-economic variations among the totalization countries. The data used are from theMarch CPS (see Appendix B ). The sample size for noncitizens and naturalized U.S. citizens fromtotalization countries is not large enough to perform separate analyses for each country. (39) Thus, analyses arepresented for noncitizens from Canada, Chile, Italy, Germany, and South Korea, and for naturalizedU.S. citizens from Canada, Ireland, Italy, Germany, Greece, Portugal, and South Korea. Tests ofstatistical significance were performed for each of the separately analyzed totalization countrypopulations compared to the corresponding population from Mexico. Unless noted otherwise, thefindings discussed in this appendix are significant at the 95% confidence level. Population. As discussed earlier in this report(see Table 1 ) and illustrated in Table A1 , the number of Mexican noncitizens in the United Statesis much higher than the number of noncitizens from all totalization countries combined. In addition,the number of naturalized citizens from totalization countries is less than the number of naturalizedU.S. citizens from Mexico. Accordingly, the population in the United States from Mexico is muchlarger than that from any individual totalization country. Age. As shown in Table A2 , although there aredifferences between the age distributions of naturalized U.S. citizens from different totalizationcountries, none of the countries has an age distribution similar to that of naturalized U.S. citizensfrom Mexico. With the exception of South Korea, the naturalized populations from totalizationcountries tends to be older than the population of naturalized Mexicans. The population ofnaturalized U.S. citizens from South Korea is more heavily concentrated at the lower end of the agedistribution (i.e., below 35 years old) than the naturalized population from Mexico. Similarly, there are differences between the age distributions of noncitizens from totalizationcountries, but none of the countries has an age distribution equivalent to that of Mexican noncitizens. As with the naturalized populations, in general, noncitizens from totalization countries tend to beolder than noncitizens from Mexico. Nonetheless, the age distribution of Chilean noncitizens isstatistically equivalent to that of Mexican noncitizens except for those between the ages of 25 and34 (a higher concentration of Mexican noncitizens) and those 55 to 64 (a higher concentration ofChilean noncitizens). (40) Table A1. Estimated Population by Citizenship Status: UnitedStates, Mexico, and Totalization Countries, March 2004 Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). Table A2. Distribution of Population by Citizenship Status andAge for Select Totalization Countries, March 2004 Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Education. As shown in Table A3 , there aremajor differences in educational attainment among naturalized U.S. citizens from the differenttotalization countries. The educational attainment of naturalized U.S. citizens from Italy, Portugal,and Greece is more similar to the educational attainment of naturalized U.S. citizens from Mexicothan it is to the educational attainment of naturalized U.S. citizens from all totalization countriescombined. There is no statistical difference in educational attainment between naturalized U.S.citizens from Mexico and from Greece. Seventy-eight percent of naturalized citizens from Mexicohave no schooling past high school, compared to 75.9% of naturalized citizens from Portugal and68.6% of naturalized citizens from Italy. In general, 49.1% of naturalized citizens from totalizationcountries did not pursue post-secondary education. Nonetheless, with the exception of Greece,naturalized citizens from Mexico tend to be less educated than naturalized citizens from any of theseparately analyzed totalization countries. Table A3. Distribution of Population Ages 18 and Over byCitizenship Status and Educational Attainment for Select Totalization Countries, March2004 Source : Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Mexican noncitizens have lower educational attainment than noncitizens from each of theseparately analyzed totalization countries. Noncitizens from each of the separately analyzedtotalization countries have significantly higher rates of post-secondary education. (41) Of the separately analyzedtotalization countries, noncitizens from Italy are the least educated, with only 31.7% having morethan a high school diploma, but significantly more Italian noncitizens have a college degree thanthose from Mexico. As illustrated in Table A3 , 11.6% of Mexican noncitizens have more than ahigh school degree. Labor Force Participation. Table A4 shows that,with the exception of South Korea (65.4%), none of the naturalized U.S. citizens from any of theseparately analyzed totalization countries have labor force participation rates as high as naturalizedcitizens from Mexico (68.2%). Only noncitizens from Italy and South Korea (48.9% and 50.6%,respectively) have labor force participation rates statistically different from the rate for noncitizensfrom Mexico (69.5%). Table A4. Labor Force Participation Rate and UnemploymentRate by Citizenship Status for Select Totalization Countries, March 2004 (persons ages 16 and over) Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). Note: The labor force participation rate is the number of persons in the labor force divided by thesize of the corresponding population. a. Estimates for totalization countries do not include Luxembourg. The unemployment rates of naturalized citizens from totalization countries analyzedseparately are not significantly different from the unemployment rate for naturalized U.S. citizensfrom Mexico. Only German and Canadian noncitizens have statistically significant lowerunemployment rates than Mexican noncitizens. (42) Full-Time/Part-Time. Table A5 shows that ahigher percentage of naturalized U.S. citizen workers from Mexico work full-time than those fromGermany, Greece, and Italy. (43) A higher percentage of Mexican noncitizens work full-time thannoncitizens from Canada, Chile, and Germany. (44) Table A5. Distribution of Employed Persons by CitizenshipStatus and Full-Time and Part-Time Employment for Select Totalization Countries, March2004 (persons ages 16 and over) Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). Note: Estimates are based on whether a person usually works full-time or part-time. a. Estimates for totalization countries do not include Luxembourg. Arrival. Although naturalized Mexicans in thelabor force arrived more recently than those from totalization countries, naturalized citizens fromSouth Korea have been as likely as naturalized U.S. citizens from Mexico to have arrived after 1985(see Table A6 ): (45) Nonetheless, while 6.0% of naturalized Mexicans arrived in 1996 or later, only 3.0% of naturalizedSouth Koreans arrived during that period. Chilean noncitizens tend to have arrived more recently than noncitizen Mexicans: 61.2% ofChilean noncitizens arrived after 1995 compared to 43.5% of Mexican noncitizens. The differencebetween the percentages of South Korean and Mexican noncitizens who have arrived since 1996 isnot significant. Table A6. Arrival Year by Citizenship Status for Those in theLabor Force for Select Totalization Countries Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Gender. Table A7 shows that the population ofnaturalized citizens from Mexico is evenly split between men and women (50.5% and 49.5%,respectively), and is very similar to the gender distribution of naturalized U.S. citizens from Italy. A majority of Mexican noncitizens is male (56.3%). The gender distribution of noncitizens fromChile (65.2%) and Italy (50.8%) is similar to that of noncitizens from Mexico. Among noncitizens, 72.4% of Mexicans in the labor force are male, compared to 53.1% ofnoncitizens from totalization countries. The gender distribution of noncitizens from Chile and Italyin the labor force (72.% and 61.4% male, respectively) is similar to that of Mexico. Table A7. Gender by Citizenship Status for Total Population andThose in the Labor Force for Select Totalization Countries, March 2004 Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Earnings. Naturalized citizens from Mexico aswell as Mexican noncitizens have lower annual earnings than workers from the totalization countries(see Table A8 ). Among noncitizens, Mexican workers are more likely than workers from thetotalization countries to earn less than $20,000 annually and, except for workers from Chile, lesslikely to earn $100,000 or more annually. Table A8. Distribution of Employed Persons by CitizenshipStatus and Annual Earnings for Select Totalization Countries, 2003 (persons ages 16 and over) Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Occupations. As illustrated in Table A9 , theoccupational distributions for naturalized workers from some totalization countries are similar to theoccupational distribution of naturalized workers from Mexico. Naturalized U.S. citizens fromMexico, Greece, and Italy are similarly concentrated in service occupations, while naturalizedcitizens from each of the separately analyzed totalization countries are at least two times as likelyto be in management, business, and financial occupational group than naturalized U.S. citizens fromMexico. (46) Furthermore, naturalized U.S. citizens from Canada, Italy, and South Korea are more likely to be inprofessional occupations than those from Mexico, while naturalized U.S. citizens from Greece,Ireland, and Portugal are not significantly less likely to be in professional occupations than thosefrom Mexico. With the exception of naturalized citizens from Portugal and Greece, naturalized U.S.citizens from each of the separately analyzed totalization countries are less likely to be in productionoccupations than those from Mexico. The occupational distributions of noncitizens from each of the totalization countries are moresimilar to each other than to the occupational distribution of Mexican noncitizens (see Table A10 ). With the exception of Chile, noncitizens from each of the totalization countries are more than fivetimes as likely as noncitizens from Mexico to be in management and professional occupations. (47) In addition, noncitizensfrom each of the totalization countries are less likely to be in service and transportation occupationsthan Mexican noncitizens. Chilean noncitizens are as likely to be in construction occupations asMexican noncitizens. Moreover, the percent of Italian noncitizens in construction occupations issimilar to that of Mexicans in construction occupations. Finally, the concentration of South Koreannoncitizens in production occupations is similar to that of Mexican noncitizens. Table A9. Distribution of Naturalized Employed Persons by Occupation by Country for Select TotalizationCountries,March 2004 (persons ages 16 and over) Source: Calculated by CRS from the March 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. Table A10. Distribution of Noncitizens Employed Persons by Occupation by Country for Select TotalizationCountries,March 2004 (persons ages 16 and over) Source: Calculated by CRS from the Mar. 2004 Current Population Survey (CPS). a. Estimates for totalization countries do not include Luxembourg. The analysis in this report is based on data from the March 2004 CurrentPopulation Survey (CPS). The Current Population Survey (CPS) is a householdsurvey conducted by the U.S. Bureau of the Census for the Bureau of Labor Statistics(BLS) of the U.S. Department of Labor. The monthly CPS is the main source oflabor force data for the nation, including estimates of the monthly unemploymentrate. The CPS collects a wide range of demographic, social, and labor marketinformation. Currently, approximately 57,000 households are interviewed eachmonth. The monthly CPS sample is representative of the civilian noninstitutionalpopulation; it does not include persons on active military duty. (48) EachMarch, the CPS asks additional questions about earnings for the previous year. (49) The BLS defines the labor force as the sum of employed and unemployedpersons. Unemployed persons are individuals who are not working but who areavailable and looking for work. Employed persons are individuals who are workingfor a private or public employer, are self-employed, or who work 15 hours or morea week as unpaid workers on a family farm or business. Also counted as employedare persons who are temporarily absent from work because of illness, bad weather,vacation, job training, labor-management disputes, childcare problems, maternity orpaternity leave, or other family or personal reasons. (50) The CPS uses five categories to define citizenship: (1) born in the UnitedStates; (2) born in Puerto Rico or another outlying area of the United States; (3) bornabroad of U.S. citizen parents; (4) naturalized citizens; and (5) noncitizens. For theanalysis in this report, the first three categories were combined and defined as"citizens." The group of U.S. citizens excludes naturalized citizens from Mexico andthe current totalization countries. Naturalized U.S. citizens from Mexico and thetotalization countries were analyzed separately because it more likely that individualsin those groups would have credits to combine under a totalization agreement (i.e.,compared to naturalized U.S. citizens from other countries and natural-born U.S.citizens). Information on place of birth is collected for every household member in theCPS sample, and for the parents of every household member. Individuals born in theUnited States or its outlying areas, or whose parents were born in the United Statesor its outlying areas, are not asked questions about citizenship. Individuals bornoutside the United States or its outlying areas, and whose parents were born outsidethe United States or its outlying areas, are asked, "Are you a citizen of the UnitedStates?" Respondents who answer "Yes" are coded as naturalized citizens, whilerespondents who answer "No" are categorized as noncitizens. In the CPS,individuals for whom no birthplace is provided are assigned a citizenship statusduring the editing process. For example, the citizenship status of a child may beassigned based on the citizenship status of the child's mother. (51) The CPSdoes not attempt to verify the accuracy of responses to the questions aboutcitizenship. It is not possible using CPS data to differentiate between different categoriesof noncitizens (e.g., legal permanent residents, temporary workers, students, refugees,and asylees). Nor is it possible to differentiate between aliens who are in the UnitedStates legally and those who are unauthorized. Thus, some of the respondents in thenoncitizens category who have never had authorization to work in the United Stateswould be ineligible for Social Security benefits, barring future changes toimmigration or Social Security policy. The comparisons discussed in this report are statistically significant at the95% confidence level, unless stated otherwise. Estimates based on survey responsesfrom a sample of households have two kinds of error: nonsampling error andsampling error. Examples of nonsampling error include information that ismisreported and errors made in processing collected information. Sampling erroroccurs because a sample, and not the entire population, of households is surveyed. The difference between an estimate based on a sample of households and the actualpopulation value is known as sampling error. (52) Whenusing sample data, researchers typically construct confidence intervals aroundpopulation estimates. Confidence intervals provide information about the accuracyof estimated values. With a 95% confidence interval and repeated samples from apopulation, 95% of intervals will generally include the actual value of a populationcharacteristic. For this report, confidence intervals were calculated using amethodology suggested by the Census Bureau. (53) 

Summary: On June 29, 2004, the United States and Mexico signed a Social Security totalizationagreement, the effects of which depend on the yet to be disclosed language of the agreement. Atotalization agreement coordinates the payment of Social Security taxes and benefits for workers whodivide their careers between two countries. The agreement has not been transmitted to Congress forreview, which is required under law before the agreement can go into effect. This report does notattempt to estimate the potential cost of a totalization agreement with Mexico, or reach a conclusionon the effects of such an agreement on U.S. workers and employers. Instead this report explores oneof the issues concerning such an agreement. Using different socio-economic characteristics, thereport 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 theUnited States. The Social Security program provides monthly cash benefits to qualified retired and disabledworkers, their dependents, and survivors of deceased workers. Generally, a worker must have 10years of Social Security-covered employment to be eligible for retirement benefits (less time isrequired for disability and survivor benefits). Most jobs in the United States are covered underSocial Security. Noncitizens (aliens) who work in Social Security-covered employment must paySocial Security payroll taxes, including those who are in the United States working temporarily andthose 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 lessthan five years. In addition, by statute, the work of aliens under certain visa categories is not coveredby Social Security. Currently, since Mexico meets the definition of a "social insurance country," aMexican worker may receive U.S. Social Security benefits outside the United States. Familymembers of the Mexican worker must have lived in the United States for at least five years to receivebenefits outside the United States, but typically under a totalization agreement this requirement iswaived. This report concludes that the Mexican population in the United States has a differentsocio-economic profile than both U.S. citizens and persons (both naturalized U.S. citizens andnoncitizens) from current totalization countries. Workers from totalization countries tend to havemore 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 thannaturalized U.S. citizens from Mexico, and other U.S. citizens. In addition, Mexican noncitizensand naturalized U.S. citizens from Mexico in the U.S. labor force tend to have more dependents intheir U.S. households. Because Mexican workers may have lower lifetime earnings, they mayreceive a higher replacement rate, relative to the payroll taxes they pay, than workers with higherlifetime earnings, such as U.S. citizens and noncitizens from the totalization countries. This reportwill not be updated.