The lack of a social safety net has long been a challenge for undocumented immigrant families and contributed to inequality, but a new study found that immigrant Latino families being excluded from public assistance not only increases the childhood poverty rate, but affects documented Latino children as well.

The inequality rate among families with children in the U.S. has grown at more than twice the rate of overall wage inequality over the past 50 years. Undocumented families with children feel the squeeze even more, with fewer resources to contribute to vital economic stepping-stones like education.

But the effects of exclusion go beyond the undocumented, as shown by a recent study in the Policy Studies Journal, which was highlighted by the London School of Economics (LSE) US Centre.

"When a policy restricts the eligibility of a narrow group of immigrants, like the undocumented or recently arriving Legal Permanent Residents (LPRs), the effects can spill over into the broader immigrant community, onto the second generation, and to the ethnic group with which immigrants identify," wrote the authors of the study on LSE's U.S. policy blog. "Spillover effects, which occur across many populations, are particularly important when policy targets immigrants because of deep ties with broader minority communities and mixed status families."

Spillover to Latino Community

With regard to the U.S., the LSE researchers primarily addressed the Latino community, taking undocumented immigrants, citizens and acculturated individuals together. Of course, for the undocumented, limited access to the social safety net primarily affects educational attainment, which leads to economic stagnation.

Poor families ineligible for financial benefits have fewer resources to direct toward children's education, limiting their opportunities to improve economic standing as they grow up. The "spillover" from those disadvantages, however, is broader in its effect than the undocumented immigrant community.

"Spillover occurs in several ways. Material disadvantage confronted by one immigrant group transfers through families and peer networks," explained the study's researchers.

Even the existence of the ineligible category of immigrants can affect other immigrant groups who may not take advantage of programs and aid that the social safety net could provide. The negative economic effects from these misconceptions spread out like waves through the community of immigrants, legal or otherwise.

"Confusion about eligibility can keep eligible immigrants and their children off public assistance programs," wrote the researchers. "And Latinos may perceive lesser prospects for mobility in states that do not create a strong safety net for immigrant families, which could decrease educational aspirations."

Education Effects Spread Through Latino Community

The researchers investigated this effect by looking at the low-income Latino community after the passage of welfare reform bills in 1996, which excluded many immigrant families from social safety net programs. For example, the researchers compared the growth in the high school graduation rate between various states -- some more restrictive than others, following the law change -- while taking into account other differences in circumstances.

"The results are clear: following reform, the graduation rate of low-income Latinos grew substantially faster in states that extended their own social safety nets. We find both direct effects among Latino youth who became ineligible for income support, and spillover effects among those who remained eligible," the LSE researchers found.

Low-income Latino adolescents were 9 percent less likely to graduate from high school if they lived in a state with a restrictive social safety net -- even though those restrictions only technically affected the undocumented immigrants in their communities -- than if they lived in a state with more liberal eligibility standards.

The results suggest that policymakers should take into account more than just undocumented Latino immigrants when making decisions. Policy changes could actually affect legal Latino immigrants in the same communities.