Full Citation

Title: Immigration, Unemployment and Labor Force Participation in the United States

Citation Type: Miscellaneous

Publication Year: 2018

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: EXECUTIVE SUMMARY Critics of immigration often allege that immigration worsens US-born workers' labor market outcomes, such as their employment and earnings. A large body of economic research has examined how immigration has affected natives' wages. Most of these studies have concluded that immigration has little or no adverse effect on US natives' wages. However, few studies have examined other key dimensions of US natives' success in the labor market: unemployment and labor force participation. Understanding how immigration affects unemployment and labor force participation among US natives is important for several reasons. The foreign-born share of the population is the highest in a century, and immigrants account for 1 in 6 workers. Although unemployment is currently near a record low, it soared during the Great Recession of 2007-2009 and was slow to return to pre-recession levels. Labor force participation, meanwhile, has been declining for years, a trend that accelerated with the recession and has yet to reverse. Unemployment and labor force participation are markedly worse among disadvantaged groups, such as less-educated workers, that may compete the most intensively with immigrants in the United States. This study examines the relationship between immigrants' share of the labor force and US natives' unemployment and labor force participation rates using comprehensive data from 2005-2013. The study controls for economic conditions that may affect the number of immigrants in a state and presents two-stage least squares estimates that control for endogeneity. The results of the state-level analysis indicate that immigration does not increase US natives' unemployment or reduce their labor force participation. Instead, having more immigrants reduces the unemployment rate and raises the labor force participation rate of US natives within the same sex and education group. Specifically, this study finds: • A 1 percentage point increase in the share of the labor force comprised of immigrants appears to reduce the unemployment rate of US natives in the same sex-education group by 0.062 percentage points, on average. • A 1 percentage point increase in the share of the labor force comprised of immigrants appears to raise the labor force participation rate of US natives in the same sex-education group by 0.045 percentage points, on average. • There is no evidence of significant adverse effects among less-educated US-born workers, while immigration appears to boost labor force participation among more-educated US-born workers. • Having more immigrants overall does not significantly affect US natives' unemployment or labor force participation rate.

Url: https://nfap.com/wp-content/uploads/2018/05/IMMIGRANTS-AND-JOBS.NFAP-Policy-Brief.May-2018-1.pdf

User Submitted?: No

Authors: Zavodny, Madeline

Publisher: NFAP

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Migration and Immigration

Countries: