CBO Study: Immigrants in the U.S. Labor Market

In July, the Congressional Budget Office (CBO) released a fascinating statistical portrait of immigrants in the U.S. labor market, entitled The Role of Immigrants In the U.S. Labor Market: An Update (See the report, PDF 676KB.) These latest CBO findings are sure to influence the course of the immigration debate, because its numbers are widely considered to be authoritative, objective, and above the partisan fray, and are required to be so, in accordance with its Congressional mandate.

At the outset, the study makes clear that the demographics of the American workforce are changing rapidly:

“People born in other countries are a growing presence in the U.S. labor force. In 1994, 1 in 10 people in the U.S. labor force was born elsewhere, but in 2009, 1 in 7 was foreign born. About 40 percent of the foreign-born labor force in 2009 was from Mexico and Central America, and more than 25 percent was from Asia.”

The statistics can be deceiving at first glance. Even though growth in the foreign-born U.S. labor force continues unabated, the rate of growth has actually slowed considerably, down from an average annual growth rate of 5.2 percent in the decade spanning 1994-2004 to the current average annual growth rate of 2.2 percent – a sharp decline, really, despite the overheated rhetoric to the contrary.

Educational attainment is another area where the interesting statistics are below the aggregate, top-level numbers. According to the CBO, for instance, the native-born workforce completed an average of 13.7 years of education, compared to foreign-born workers, who as a whole completed an average of 12.5 years of education. The averages mask a wide degree of variation in educational attainment, with immigrants from Mexico and Central America having completed, on average, just under ten years of schooling, while immigrants from India completed an average of 16.3 years of education, 15.2 years for immigrants from Canada and Great Britain, 14.8 years for immigrants from China and Hong Kong, and 14.9 years on average for immigrants from the Philippines.

The CBO study also documents a shifting pattern in geographic distribution of immigrant labor in the United States; immigrant workers continue to be heavily concentrated in California, New York, Florida, Texas, New Jersey, and Illinois, but are starting to spread into less-traditional locations around the country. California’s share of the immigrant workforce has dropped from 33 percent in 1994 to 26 percent in 2009, and the share of immigrant labor in other big states (NY, FL, TX, NJ, IL) dropped in the same period, from 41 to 39 percent, while the remaining states claimed an ever-larger proportion of the foreign-born workforce, rising from 26 percent in 1994 to 35 percent in 2004 and 2009.

Rates of unemployment also vary across the native-born / foreign-born, in some cases, considerably. In the aggregate, native-born men, age 16 and older, were unemployed at a higher rate in 2009 – 10.4 percent – than all foreign-born men – 9.9 percent – but at a lower rate than foreign-born men from Mexico and Central America, who experienced 11.4 percent unemployment. The contrast was even sharper for women, with native-born workers unemployed at a rate of 7.9 percent, foreign-born women workers unemployed at a rate of 9.1 percent; of these, women workers from Mexico and Central America were unemployed at a rate of 12.1 percent.

Across several domains, the numbers show that immigrant workers from Mexico and Central America are at a greater disadvantage in the U.S. labor force than their foreign-born colleagues from the rest of the world. One hopeful sign, however: the children of immigrant workers – including those from Mexico and Central America – tend to do better than their parents, getting more years of schooling and earning more money during their careers. The study should be required reading for Washington policy makers, when immigration reform returns to the national stage, sometime after the November elections.