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Title: Tied to the Business Cycle: How Immigrants Fare in Good and Bad Economic Times
Citation Type: Miscellaneous
Publication Year: 2009
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Abstract: Immigrants have figured prominently in US economic growth for decades, but the current recession has hit them hard. Between the early 1990s and 2007, the United States experienced a long period of sustained economic growth interrupted only by the relatively mild 2001 recession. During that period, immigrants surpassed natives in several key labor market outcomes. From 1994 to 2007, the immigrant employment rate rose above that of natives, peaking at about 66 percent in 2007 compared to about 63 percent for natives. Also, the immigrant unemployment rate fell below that of natives, dropping to 3.4 percent in 2006 compared to 4.5 percent for natives. These gains by immigrants are even more notable because the foreign-born population swelled during this period. Although immigrants made large inroads in the labor market, the immigrant-native earnings gap remained largely unchanged. Immigrant earnings increased, particularly during the 1990s, but the growth largely matched native earnings gains. The immigrant poverty rate plummeted during the 1990s and then remained fairly stable until the onset of the recent recession in late 2007. Immigrant economic outcomes began deteriorating before the recession was officially underway, largely as a result of the housing bust. As house prices began to decline in spring 2006, residential construction employment slumped and immigrant employment rates fell. The immigrant unemployment rate began rising toward the end of 2006. Since then, immigrants have seen larger decreases in employment and increases in unemployment than have natives. The pattern these changes suggest is borne out by a statistical analysis of employment and unemployment over the past 15 years. Despite a long-run trend of rising employment rates and falling unemployment rates, immigrants’’ economic outcomes in the short run are more strongly tied to the business cycle than those of natives. The natural follow-up question is why immigrant labor market outcomes are more cyclical. Since immigrants differ from natives in many ways, a number of explanations are possible:
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Authors: Orrenius, Pia, M; Zavodny, Madeline
Publisher: Migrant Policy Institute
Data Collections: IPUMS CPS
Topics: Migration and Immigration
Countries: United States