1 No. 15 September 2011 StaffPAPERS FEDERAL RESERVE BANK OF DALLAS Employment Outcomes over the Business Cycle Pia Orrenius and Madeline Zavodny
2 StaffPAPERS is published by the Federal Reserve Bank of Dallas. The views expressed are those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted if the source is credited and the Federal Reserve Bank of Dallas is provided a copy of the publication or a URL of the website with the material. For permission to reprint or post an article, the Public Affairs Department at Staff Papers is available free of charge by writing the Public Affairs Department, Federal Reserve Bank of Dallas, P.O. Box , Dallas, TX ; by fax at ; or by phone at This publication is available on the Dallas Fed website,
3 No. 15, September 2011 Employment Outcomes over the Business Cycle Pia Orrenius Research Department Federal Reserve Bank of Dallas & IZA Madeline Zavodny Department of Economics Agnes Scott College & IZA Abstract have figured prominently in U.S. economic growth for decades, but the recent recession hit them hard. labor market outcomes began deteriorating even before the recession was offi cially under way, largely as a result of the housing bust. An analysis of employment and unemployment rates over the past fifteen years shows that immigrants labor market outcomes are more cyclical than those of natives. The greater cyclicality of immigrants employment and unemployment is concentrated among less-educated immigrants, but college-educated immigrants nonetheless have more-cyclically sensitive employment outcomes than college-educated natives. JEL codes: Keywords: J21, J61, J64, E32 Business cycle, recession, employment, immigrants The views expressed herein do not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System. We thank Michael Nicholson for excellent research assistance. This paper is a revised and expanded version of our report Tied to the Business Cycle: How Fare in Good and Bad Economic Times for the Migration Policy Institute, available online at
4 2 The United States is recovering from the deepest downturn the country has experienced since the Great Depression. By the time the unemployment rate peaked in October 2009, the number of unemployed persons had risen by 7.9 million since the Great Recession began in December All demographic groups experienced job losses, but some groups were more adversely affected than others. Repeating the pattern of most previous downturns, the recession s impact has been worst for low-education and minority workers. One group that has been particularly hard hit is immigrants. compose about 13 percent of the U.S. population and an even larger share over 15 percent of the labor force. 2 Between the end of 2006 and the first half of 2009, the unemployment rate among immigrants rose from a low of 3.4 percent to a high of 9.2 percent, and their employment rate dropped by 4.6 percentage points. In contrast, during that period the unemployment rate among natives rose from a low of 4.1 percent to a high of 8.3 percent, and their employment rate fell by 3.3 percentage points. 3 earnings also fell much more steeply than natives wages from 2009 to 2010 (Kochhar, Espinoza, and Hinze-Pifer 2010). are particularly sensitive to economic downturns because of their relatively low average skill levels. make up almost two-fifths of workers who do not have a high school diploma or equivalent and three-quarters of workers who have completed at most eighth grade. When the economy slows, employers look to shed their least productive employees first. Employers tend to invest less in training low-skilled workers and therefore have less incentive to try to keep them when laying off workers. Less-skilled workers may also be displaced by high-skilled workers who move down the skill chain during a recession (Devereux 2004). While this pattern affects both low-skilled immigrants and natives, low-skilled immigrants, particularly recent arrivals, face additional diffi culties. Over one-half of all U.S. immigrants and three-quarters of those who have not completed high school report that they cannot speak English very well. also tend to have less social capital, or fewer connections and less knowledge about labor markets, than low-skilled natives. Such diffi culties are compounded by a lack of legal status for some 8 million unauthorized immigrant workers in the U.S. While immigrants relatively low skill levels make the foreign-born particularly vulnerable during recessions, other factors may partly offset this effect. tend to be more mobile than natives, both geographically and across industries and occupations (Borjas 2001). If immigrants are quicker to search for and find alternative employment than natives, their unemployment spells may be shorter. In addition, immigrant inflows slow during recessions, particularly among unauthorized and employment-based legal immigrants, and some immigrants return home as their economic prospects worsen. Both of these behaviors reduce the competition for jobs among immigrants during downturns. They also dampen the cyclicality of the immigrant employment and unemployment rates. Previous research suggests that immigrants vulnerabilities tend to outweigh these advantages. Several studies conclude that immigrants labor market outcomes are more sensitive than natives outcomes to business cycle fluctuations in the U.S. and in several other countries. For example, employment and unemployment appear to be more sensitive to changes in the national unemployment rate among male immigrants than among male natives in the U.S. (Chiswick, Cohen, and Zach 1997). hourly wages also are more sensitive than natives wages to changes in state-level unemployment rates in the U.S. (Bratsberg, Barth, and Raaum 2006). A similar pattern holds for earnings in Norway (Barth, Bratsberg, and Raaum 2004). Within education groups, unemployment rates but not earnings are more responsive to the business cycle among immigrants than among natives in Germany and in the United Kingdom (Dustmann, Glitz, and Vogel 2010). In the U.S., in contrast, employment tends to be more cyclically sensitive among natives than among immigrants within education and race/ethnicity groups, whereas the opposite pattern holds for earnings (Borjas 2008). This study provides additional, recent evidence on whether labor market outcomes are more sensitive among immigrants than among U.S. natives. Using data from 1994 through the first half of 2009, we find that immigrants employment and unemployment rates display excess cyclicality relative to natives. This is true for comparisons relative to all natives and relative to natives with the same level of educational attainment. After showing that this is true for business cycles at both the national and state levels, we turn to a brief discussion of policy implications. 1 See Employment Situation Summary, Bureau of Labor Statistics, U.S. Department of Labor, news release, December 2009, 2 We use the terms immigrant and foreign-born interchangeably in this paper. 3 All statistics presented in this paper are authors calculations from Current Population Survey outgoing rotation group data unless indicated otherwise.
5 1. DATA Until recently, there was limited opportunity to study immigrants labor market outcomes over the business cycle in the U.S. The necessary data regular surveys that ask individuals about economic outcomes and foreign birth only began to become available as of Economists then had to wait until 2001 to observe a recession, which was relatively mild. The considerably more severe and prolonged downturn that began in late 2007 and ended in June 2009 thus provides an opportunity to examine how immigrants fare relative to natives over the business cycle. All data used here are from the monthly Current Population Survey (CPS) data. When examining the entire labor force, we include all individuals age 16 and older. When examining specific education groups, we include only individuals age 25 and older in order to capture completed education levels. Observations are weighted using the composite weights. 5 We examine only employment and unemployment because there already is a relatively extensive wagecurve literature that examines the effect of macroeconomic conditions on earnings, including Bratsberg, Barth, and Raaum s (2006) comparison of immigrants and natives. We conduct both an aggregate analysis that examines trends and cycles in employment and unemployment rates and an individual-level analysis that examines the effect of the business cycle on employment outcomes, controlling for individual characteristics. For the aggregate analysis, we used the composite weights to create seasonally adjusted quarterly employment and unemployment rates BACKGROUND ON IMMIGRANT AND NATIVE LABOR MARKET OUTCOMES Viewed over the course of two expansions and two recessions, trends in immigrant and native employment and unemployment rates over the last 15 years provide insight into how these two groups fare over the business cycle. Employment rates, which measure employed workers as a share of the noninstitutionalized civilian population, are typically procyclical, increasing during expansions and falling during recessions. Unemployment rates, which measure the unemployed as a share of the labor force, are typically countercyclical. Figure 1 shows the employment rates for immigrants and natives from the first quarter of 1994 through the second quarter of The shaded portions indicate the two recessions during this period: the hightech bust in 2001 and the more recent housing bust/financial crisis. 6 The figure suggests that the immigrant employment rate is more procyclical than the native rate. The immigrant employment rate skyrocketed by over 4 percentage points during the 1990s boom while the native employment rate inched upward about 1 percentage point. Employment rates for both groups fell during the 2001 recession, but by 2003 the immigrant employment rate surpassed the native employment rate and remained consistently higher. The immigrant employment rate reached a series high of over 66 percent in early 2007, while the native employment rate never returned to its pre-2000 rates. Instead, it remained largely flat during the 2000s economic expansion and then fell with the onset of the recession in late Since then, the immigrant employment rate has fallen more precipitously than the native rate. Figure 2 suggests a similar pattern with regard to unemployment rates. During the 1990s expansion, the immigrant unemployment rate fell more than the native rate. After rising in the early 2000s, the immigrant unemployment rate fell to 3.4 percent in late 2006, its lowest point over the 15-year period. The native unemployment rate did not fall as much during the 2000s expansion and actually bottomed out at 3.8 percent in the fourth quarter of The immigrant unemployment rate started rising earlier and faster than the native unemployment rate as the economy moved into the recession in late Differences in educational attainment may help explain these patterns. are concentrated in the middle to high end of the education distribution, while immigrants are concentrated at the low and high ends. Based on 2009 CPS data, roughly equal shares of adult natives have a high school diploma (32 percent), some college (28 percent), and a bachelor s degree or higher (30 percent). Only 10 percent have not completed high school. are less likely to be in the middle of the education distribution; about 25 percent have a high school diploma and 15 percent some college. In contrast, 30 percent of immigrants have 4 The 1980, 1990, and 2000 censuses all occurred near business-cycle peaks and so do not provide the needed variation to study business-cycle effects. 5 Composite weights are micro data weights that incorporate composite estimates based on the outgoing rotation groups in the monthly CPS data. 6 Because we use quarterly data, the figures here show the 2001 recession offi cially from March 2001 to November 2001, according to the National Bureau of Economic Research (NBER) as occurring from the second through the fourth quarter The recent recession is shown as beginning in the first quarter of 2008 instead of NBER s offi cial start date of December 2007.
6 4 Figure 1: Employment Rates by Nativity, % 66% 64% 62% 60% 58% 56% NOTES: Shown are seasonally adjusted quarterly data for first quarter 1994 to second quarter Recessions are shown as shaded areas. SOURCE: Authors calculations from U.S. Census Bureau, Current Population Survey, January 1994 to June Figure 2: Unemployment Rates by Nativity, % 9% 8% 7% 6% 5% 4% 3% NOTES: Shown are seasonally adjusted quarterly data for first quarter 1994 to second quarter Recessions are shown as shaded areas. SOURCE: Authors calculations from U.S. Census Bureau, Current Population Survey, January 1994 to June 2009.
7 no high school diploma, and 29 percent have a bachelor s degree or higher. Although educational attainment increased among both immigrants and natives during the last 15 years, natives have experienced a slightly faster pace of increase. The most dramatic difference in employment and unemployment rates is between immigrants and natives who have not completed high school. As the top left panel of Figure 3 shows, the employment rate among less-educated immigrants ranged between 50 and 60 percent during , over 20 percentage points higher than the employment rate among less-educated natives. Correspondingly, less-educated natives had higher unemployment rates than immigrants during the 2000s (Figure 4 ). These gaps widened during the housing boom, which benefited less-educated immigrants more than less-educated natives. with a high school diploma but no college education also outperformed similarly educated natives in terms of employment during the 2000s. 5 Figure 3: Employment Rates by Nativity and Education, No High School Diploma High School Diploma or Equivalent 85% 85% 75% 75% 65% 65% 55% 55% 45% 45% 35% 35% 25% 25% 85% 75% 65% 55% 45% 35% Some College 85% 75% 65% 55% 45% 35% Bachelor's Degree or Higher 25% 25% NOTES: Shown are seasonally adjusted quarterly data for first quarter 1994 to second quarter Data include only individuals age 25 and older. Recessions are shown as shaded areas. SOURCE: Authors calculations from U.S. Census Bureau, Current Population Survey, January 1994 to June While less-educated immigrants tend to substantially outperform less-educated natives in terms of employment and unemployment, the opposite is the case among the highly educated. College-graduate immigrants tend to have slightly lower employment rates and higher unemployment rates than similarly educated natives. In the first half of 2009, for example, college-educated immigrants averaged unemployment rates close to 6 percent, quite a bit higher than the 4 percent rate for college-educated natives. 3. IMMIGRANT AND NATIVE SENSITIVITY TO THE BUSINESS CYCLE We now turn to a more formal analysis of whether labor market outcomes are more cyclical among immigrants than natives and use several methods to examine this issue. We first decompose the data into trend and cyclical components using the Hodrick Prescott (HP) filter. 7 We first compare the cyclical components, which are short-run fluctuations around the long-run trend, of aggregate immigrant and native labor market outcomes by correlating them with quarterly gross domestic product (GDP) growth. We then also examine the relationship between labor market outcomes and the business cycle in a regression framework with individual-level data. Figure 5 shows the cyclical component of the immigrant and native employment rates. The vertical axis measures the percentage points by which each group s employment rate in a given quarter was above or below its trend over the 15-year period. The impact of the two recessions is apparent: Both native and immigrant employment rates fell below their long-run trends (below the zero line) during the downturns. Employment rates remained low for several years after the 2001 recession ended, a period that has been frequently characterized as a jobless recovery. 7 We use a smoothing parameter value of 1600.
8 6 Figure 4: Unemployment Rates by Nativity and Education, No High School Diploma 20% 20% High School Diploma or Equivalent 15% 15% 10% 10% 5% 5% 0% 0% Bachelor's Degree or Higher Some College 20% 20% 15% 15% 10% 5% 10% 5% 0% 0% NOTES: Shown are seasonally adjusted quarterly data for first quarter 1994 to second quarter Data include only individuals age 25 and older. Recessions are shown as shaded areas. SOURCE: Authors calculations from U.S. Census Bureau, Current Population Survey, January 1994 to June Figure 5: Short-Run Fluctuations in Employment Rates by Nativity, % 2% 1% 0% -1% -2% -3% NOTES: Shown are the cyclical components after applying the Hodrick Prescott filter to employment rates. Recessions are shown as shaded areas. Data are seasonally adjusted. SOURCE: Authors calculations from U.S. Census Bureau, Current Population Survey, January 1994 to June 2009.
9 Figure 5 also indicates that the immigrant employment rate experiences greater volatility than the native employment rate. The magnitude of the swings in the series is considerably larger for immigrants the standard deviation of the cyclical component of the immigrant employment rate is 0.9 percentage points compared with 0.5 percentage points for natives. This greater volatility appears to be caused by greater sensitivity of immigrant employment to the business cycle. The immigrant cyclical component is above that of natives during booms (1996 to 1998, at the end of 2000, and during 2005 to 2007) and below that of natives during economic troughs (in 2002 and 2008 to 2009). employment rate rises higher in booms and sinks lower in busts. Like the employment rate, the unemployment rate is more volatile among immigrants than natives. Figure 6 shows the cyclical component of the unemployment rates for natives and immigrants. Again, the standard deviation of the cycle is larger for immigrants than for natives, at 0.9 percentage points for immigrants versus 0.6 percentage points for natives. These deviations are particularly large before and after recessions, the very high and low points of economic activity. The 2001 recession shows this clearly, with the immigrant unemployment rate first dipping much further below its trend than the native rate and then spiking much higher above its trend soon after the recession s end. Despite registering unemployment well above the long-term trend in the wake of the high-tech bust of 2001, the immigrant unemployment rate recovered quickly. The housing boom provided a notable boost to job opportunities among immigrant workers during the 2000s expansion. 7 Figure 6: Short-Run Fluctuations in Unemployment Rates by Nativity, % 2% 1% 0% -1% -2% NOTES: Shown are the cyclical components after applying the Hodrick Prescott filter to unemployment rates. Recessions are shown as shaded areas. Data are seasonally adjusted. SOURCE: Authors calculations from U.S. Census Bureau, Current Population Survey, January 1994 to June If immigrants labor market outcomes are indeed more sensitive to swings in the business cycle, then they should be more strongly correlated with the growth rate of GDP than are natives labor market outcomes. As an initial foray into examining this possibility, Table 1 presents the simple correlation between quarterly GDP growth rates and the cyclical component of the employment rate and the unemployment rate series for immigrants and natives overall and by educational attainment. We focus on the cyclical component instead of the raw data because we are examining the correlation with GDP growth, not levels. Using detrended labor market outcomes is important in this comparison because the employment and unemployment trends among immigrants and natives are different over this period (as can be clearly seen in Figures 1 and 2). The correlations indicate that immigrants labor market outcomes are indeed more tied to the business cycle. The difference is most striking for employment, shown in the top panel of Table 1. The correlation between the GDP growth rate and the cyclical component of the employment rate for all immigrants is 0.26 versus 0.14 for natives. Looking by education, the correlation is strongest among immigrants who do not have a high school diploma, at The opposite is true among natives the correlation between GDP growth and the cyclical component of the employment rate is weakest among the least-educated at A similar pattern holds among college graduates, with the correlation between real GDP growth and the
10 8 Table 1: Correlation Between GDP Growth Rate and Cyclical Components of Labor Market Outcomes, by Nativity and Education Employment rate All No high school diploma High school diploma only Some college Bachelor s degree Unemployment rate All No high school diploma High school diploma only Some college Bachelor s degree NOTES: Shown is the correlation between changes in real GDP and the cyclical component of the labor market outcome (employment or unemployment rate) by nativity and education. See text for details. Data are from the first quarter of 1994 through the second quarter of The all rows include individuals age 16 and older, and rows by education include only individuals age 25 and older. cyclical component of the employment rate more than twice as large among immigrants with a bachelor s degree or higher as among natives (0.24 and 0.11, respectively). In contrast to the results for employment rates, the correlation between real GDP growth and the cyclical component of the unemployment rate is similar among immigrants and natives. As the bottom panel of Table 1 reports, the simple correlation between the real GDP growth rate and the cyclical component of the unemployment rate is 0.25 for immigrants and 0.22 for natives overall. However, the correlation is considerably stronger among immigrants who do not have a high school diploma than among natives ( 0.22 and 0.12, respectively). The correlations suggest that employment is more-cyclically sensitive among immigrants than among natives overall. Why this result does not carry over to unemployment is an interesting question. It is possible that the labor force adjusts more readily in the case of immigrants than natives. One possible explanation is that unemployed immigrants have less incentive to remain in the labor force than natives because they are often ineligible for unemployment benefits. Also, unemployed immigrants are more likely than natives to move within the U.S. or even leave the country entirely when jobs are relatively scarce, dampening the correlation between the immigrant unemployment rate and the business cycle. In addition, the duration of immigrants unemployment spells may be less variable over the business cycle, both because of greater mobility and because immigrants may search harder for jobs and have lower expectations regarding job amenities such as a desirable location, pleasant working conditions, and fringe benefits than natives do. with some college education but not a bachelor s degree appear to be an anomalous group in Table 1. The reasons for this are unclear. These immigrants may have credentials that transfer particularly poorly into the U.S. labor market. Alternatively, immigrants in this group may be particularly heterogeneous. with a particularly large variety of education levels and credentials may fall into that education level, resulting in little correlation between real GDP growth and the cyclical components of their employment and unemployment rates. To further understand immigrant native differences, we turn to regressions that allow us to compare the sensitivity of immigrants and natives labor market outcomes to the business cycle, controlling for individual-level characteristics. 4. REGRESSION MODEL We estimate the following simple linear probability model of individuals labor market outcome (employment or unemployment status). Labor market outcome ist = α + β 1 Business Cycle st + β 2 Demographics i + β 3 Time t (1) +β 4 Time Squared t + β 5 S s + β 6 Q t + ɛ ist. When examining employment, the dependent variable equals 1 for employed and 0 otherwise, and we include all individuals 16 and older in the population. When examining unemployment, the dependent
11 variable equals 1 for unemployed and 0 otherwise, and we only include individuals 16 and older in the labor force. We focus on the relationship between employment or unemployment status and one of two measures of the business cycle: the quarterly growth rate in real GDP or the quarterly growth rate in state real personal income. 8 The first measure captures the national business cycle, while the second captures changes in state-level macroeconomic conditions. 9 We include only one measure in the regressions because of multicollinearity between the two variables. We estimate the linear probability regressions for immigrants and natives overall and then by education. As with the aggregate analysis, the overall results include all individuals age 16 and older, while the education results only include individuals age 25 and older. In addition to a measure of the business cycle, the regressions include demographics variables (an indicator variable for females and a quartic in age), state dummy variables, a linear time trend and its square, and quarter dummy variables to control for any seasonal effects RESULTS Employment and unemployment likelihoods tend to be more tied to the national business cycle among immigrants than among natives. As the top panel of Table 2 shows, the effect of real GDP growth on employment is more than three times larger among all immigrants than among all natives (0.542 versus 0.166). Table 2: Regression Estimates of the Sensitivity of Labor Market Outcomes Among and to the National Business Cycle Employed All 0.542** 0.166** (0.106) (0.038) No high school diploma 0.588** (0.199) (0.117) High school diploma only 0.554* 0.309** (0.220) (0.070) Some college * (0.276) (0.074) Bachelor s degree 0.731** 0.247** (0.202) (0.067) Unemployed All 0.665** 0.341** (0.071) (0.025) No high school diploma 0.781** 0.414** (0.164) (0.131) High school diploma only 0.732** 0.483** (0.145) (0.045) Some college ** (0.165) (0.043) Bachelor s degree 0.468** 0.268** (0.107) (0.032) *p<0.05; **p<0.01 NOTES: Shown are estimated coeffi cients on the growth rate of real GDP in linear probability regressions. The samples for the top panel are the population age 16 and older for all or age 25 and older for education groups. The samples in the bottom panel are the labor force age 16 and older for all or age 25 and older for education groups. Each entry is from a separate regression. Regressions also include a linear time trend and its square, a quartic in age, an indicator for female, and state and quarter indicator variables. The (unweighted) number of observations is 533,582 for immigrants and 4,208,618 for natives age 16 and older in the employment regressions (353,449 and 2,789,414, respectively, in the unemployment regressions). 8 Growth in GDP and personal income are calculated as the first difference of logged values. 9 Unlike some previous research, we do not use unemployment rates as a measure of the business cycle since they are mechanically related to the dependent variable in CPS data, particularly at the state level. The advantage of unemployment rates is that they are available monthly, unlike national GDP and state personal income.
12 10 Turning to unemployment, the effect of GDP growth is almost twice as large on all immigrants as on all natives ( versus 0.341). The fact that the immigrant native difference is smaller for unemployment than for employment echoes the findings from the correlations in Table 1. Nonetheless, the regressions do indicate that the employment and unemployment probabilities are more closely tied to the business cycle among immigrants than among natives overall. This difference in cyclical sensitivity is not simply a result of lower levels of education among immigrants. As the other coeffi cients in Table 2 show, the same result holds within most education groups. Among people who do not have a high school diploma, for example, the effect of stronger GDP growth on employment is more than five times as large among immigrants as among natives (0.588 versus 0.115, with the latter not even significantly different from zero). Within each education group except the some college group, immigrants labor market outcomes are more sensitive to the national business cycle. The results using the growth rate of state-level real personal income as a measure of the business cycle are fairly similar to the national results, as can be seen in Table 3. Employment and unemployment are more closely tied to the growth rate of state real personal income among immigrants than among natives. This result holds overall and within each education group, including the some college group. Table 3: Regression Estimates of the Sensitivity of Labor Market Outcomes Among and to the State Business Cycle Employed All 0.297** 0.130** (0.068) (0.036) No high school diploma 0.255* (0.106) (0.117) High school diploma only 0.261** 0.129* (0.091) (0.057) Some college 0.434* (0.183) (0.038) Bachelor s degree 0.437** 0.154** (0.090) (0.049) Unemployed All 0.445** 0.231** (0.059) (0.028) No high school diploma 0.605** 0.331** (0.133) (0.102) High school diploma only 0.481** 0.285** (0.151) (0.038) Some college 0.341** 0.197** (0.070) (0.028) Bachelor s degree 0.320** 0.142** (0.061) (0.036) *p<0.05; **p<0.01 NOTES: Shown are estimated coeffi cients on the growth rate of real state personal income in linear probability regressions. The samples for the top panel are the population age 16 and older for all or age 25 and older for education groups. The samples in the bottom panel are the labor force age 16 and older for all or age 25 and older for education groups. Each entry is from a separate regression. Regressions also include a linear time trend and its square, a quartic in age, an indicator for female, and state and quarter indicator variables. The (unweighted) number of observations is 533,582 for immigrants and 4,208,618 for natives age 16 and older in the employment regressions (353,449 and 2,789,414, respectively, in the unemployment regressions). The sensitivity of unemployment likelihood to the state business cycle declines monotonically across education groups for both immigrants and natives. More-educated workers are less vulnerable to the business cycle in terms of unemployment prospects, regardless of their nativity. Surprisingly, a similar result does not hold for employment prospects. The fact that more-educated workers are not necessarily more sheltered from the business cycle in terms of employment prospects is an intriguing finding worthy of more research. This could be an artifact of the two most recent recessions since both severely impacted sectors with relatively high education levels (the technology sector in 2001 and the financial sector in the recent recession), or it could indicate structural changes in the labor market.
13 6. DISCUSSION There have been improvements in immigrant outcomes over the past 15 years. Economic booms have hastened immigrants progress, while the recent recession has slowed it. Recessions harm employment prospects and raise unemployment. This occurs among both immigrants and natives, but the effect tends to be larger among immigrants, particularly the least-educated. economic outcomes tend to be more sensitive to the business cycle than those of natives, particularly with regard to employment. This is true overall as well as within most education groups, indicating that low average levels of education attainment cannot fully account for the more-pronounced cyclicality of immigrants labor market outcomes. greater vulnerability to the business cycle raises an interesting conundrum for public policies assisting people during downturns. Unemployment insurance (UI), the main program aimed at helping workers ride out recessions, covers only a minority of unemployed workers. UI programs have a large number of exclusions that disproportionately affect low-wage workers, who are more likely to move between jobs, hold several part-time jobs, or be self-employed. Many unemployed immigrants are therefore ineligible for UI benefits, and all unauthorized immigrants are categorically ineligible. Other transfer programs also may be ineffective at helping immigrants during downturns. Many immigrants are ineligible for benefits because they are unauthorized or have not spent suffi cient time in the United States. Also, immigrants may be reluctant to apply for benefits because they are concerned about jeopardizing an application for naturalization or a green card or revealing a family member s unauthorized status. In addition, immigrant households are more likely to be among the working poor than native households, which puts many traditonal transfer programs out of reach. Low-education immigrants are much more likely to work and less likely to be unemployed than less-educated natives, even during recessions. Reforming U.S. immigration policy is one way to help mitigate immigrants vulnerability to the business cycle. Immigrant admissions could be restructured to explicitly tie admissions to the business cycle or to make employment-based flows a larger share of all admissions. Either way, inflows would be more cyclical, falling during recessions and rising during expansions. This would better sync immigration with economic growth, lessening the burden on competing workers and reducing the need for expanded safety-net programs during economic downturns. Making immigration policy more responsive to the business cycle requires no outlay of funds and would benefit immigrants already present in the United States and possibly natives as well. 11 REFERENCES Barth, E., B. Bratsberg, and O. Raaum (2004), Identifying Earnings Assimilation of Under Changing Macroeconomic Conditions, Scandinavian Journal of Economics 106 (1): Borjas, G.J. (2001), Does Immigration Grease the Wheels of the Labor Market?, Brookings Papers on Economic Activity 2001 (1): (2008), Wage Trends Among Disadvantaged Minorities, in Working and Poor: How Economic and Policy Changes Are Aff ecting Low-Wage Workers, ed. Rebecca Blank, Sheldon Danziger, and Robert Schoeni (New York: Russell Sage Foundation), Bratsberg, B., E. Barth, and O. Raaum (2006), Local Unemployment and the Relative Wages of : Evidence from the Current Population Surveys, The Review of Economics and Statistics 88 (2): Chiswick, B.R., Y. Cohen, and T. Zach (1997), The Labor Market Status of : Effects of the Unemployment Rate at Arrival and Duration of Residence, Industrial and Labor Relations Review 50 (2): Devereux, P.J. (2004), Cyclical Quality Adjustment in the Labor Market, Southern Economic Journal 70 (3): Dustmann, C., A. Glitz, and T. Vogel (2010), Employment, Wages, and the Economic Cycle: Differences Between and, European Economic Review 54 (1): Kochhar, R., C.S. Espinoza, and R. Hinze-Pifer (2010), After the Great Recession: Foreign Born Gain Jobs; Native Born Lose Jobs (Washington, D.C.: Pew Hispanic Center, October).
CENTER FOR IMMIGRATION STUDIES June All Employment Growth Since Went to Immigrants of U.S.-born not working grew by 17 million By Steven A. Camarota and Karen Zeigler Government data show that since all
The Vanishing Middle: Job Polarization and Workers Response to the Decline in Middle-Skill Jobs By Didem Tüzemen and Jonathan Willis Over the past three decades, the share of middle-skill jobs in the United
Report December 15, 2008 Latino Workers in the Ongoing Recession: 2007 to 2008 Rakesh Kochhar Associate Director for Research, Pew Hispanic Center The Pew Hispanic Center is a nonpartisan research organization
Sarah A. Donovan Analyst in Labor Policy David H. Bradley Specialist in Labor Economics March 15, 2018 Congressional Research Service 7-5700 www.crs.gov R45090 Summary Wage earnings are the largest source
Inequality in the Labor Market for Native American Women and the Great Recession Jeffrey D. Burnette Assistant Professor of Economics, Department of Sociology and Anthropology Co-Director, Native American
DISCUSSION PAPER SERIES IZA DP No. 3951 I'll Marry You If You Get Me a Job: Marital Assimilation and Immigrant Employment Rates Delia Furtado Nikolaos Theodoropoulos January 2009 Forschungsinstitut zur
National Poverty Center Working Paper Series #05-12 August 2005 Wage Trends among Disadvantaged Minorities George J. Borjas Harvard University This paper is available online at the National Poverty Center
The Population in the United States Population Characteristics March 1998 Issued December 1999 P20-525 Introduction This report describes the characteristics of people of or Latino origin in the United
Immigrant Employment and Earnings Growth in Canada and the U.S.: Evidence from Longitudinal data Neeraj Kaushal, Columbia University Yao Lu, Columbia University Nicole Denier, McGill University Julia Wang,
Sandra Yu In class, we have framed poverty in four different ways: poverty in terms of deviance, dependence, economic growth and capability, and political disenfranchisement. In this paper, I will focus
Prospects for Immigrant-Native Wealth Assimilation: Evidence from Financial Market Participation Una Okonkwo Osili 1 Anna Paulson 2 1 Contact Information: Department of Economics, Indiana University Purdue
1 THE STATE OF WORKING FLORIDA 2 LABOR DAY SEPTEMBER 3, 2012 THE STATE OF WORKING FLORIDA 2012 by BERNARDO OSEGUERA ACKNOWLEDGEMENTS Special thanks to Emily Eisenhauer and Alayne Unterberger who reviewed
Immigration and the U.S. Economy Pia M. Orrenius, Ph.D. Federal Reserve Bank of Dallas June 19, 2007 Mercatus Center, George Mason University Disclaimer: The views expressed herein are those of the presenter;
A COMPARISON OF ARIZONA TO NATIONS OF COMPARABLE SIZE A Report from the Office of the University Economist July 2009 Dennis Hoffman, Ph.D. Professor of Economics, University Economist, and Director, L.
What Happened to the Immigrant \ Native Wage Gap during the Crisis: Evidence from Ireland Alan Barrett, Adele Bergin, Elish Kelly and Séamus McGuinness 14 June 2013 Dublin Structure Background on Ireland
Peter Gottschalk and Sheldon Danziger Inequality of Wage Rates, Earnings, and Family Income in the United States, 1975-2002 PSC Research Report Report No. 04-568 PSC P OPULATION STUDIES CENTER AT THE INSTITUTE
School Performance of the Children of Immigrants in Canada, 1994-98 by Christopher Worswick * No. 178 11F0019MIE No. 178 ISSN: 1205-9153 ISBN: 0-662-31229-5 Department of Economics, Carleton University
THE DECLINE IN WELFARE RECEIPT IN NEW YORK CITY: PUSH VS. PULL Howard Chernick Hunter College and The Graduate Center, City University of New York and Cordelia Reimers Hunter College and The Graduate Center,
Evaluating Methods for Estimating Foreign-Born Immigration Using the American Community Survey By C. Peter Borsella Eric B. Jensen Population Division U.S. Census Bureau Paper to be presented at the annual
Part 1: Focus on Income indicator definitions and Rankings Inequality STATE OF NEW YORK CITY S HOUSING & NEIGHBORHOODS IN 2013 7 Focus on Income Inequality New York City has seen rising levels of income
The Demography of the Labor Force in Emerging Markets David Lam I. Introduction This paper discusses how demographic changes are affecting the labor force in emerging markets. As will be shown below, the
Inequality in Labor Market Outcomes: Contrasting the 1980s and Earlier Decades Chinhui Juhn and Kevin M. Murphy* The views expressed in this article are those of the authors and do not necessarily reflect
Canadian Labour Market and Skills Researcher Network Working Paper No. 81 Immigrant Earnings Differences Across Admission Categories and Landing Cohorts in Canada Michael G. Abbott Queen s University Charles
SCHWARTZ CENTER FOR ECONOMIC POLICY ANALYSIS THE NEW SCHOOL WORKING PAPER 2007-6 Charting U.S. Economic Performance with Alternative Labor Market Indicators: The Importance of Accounting for Job Quality
Understanding Racial Disparities in Unemployment Rates Samuel L. Myers, Jr. Roy Wilkins Professor of Human Relations and Social Justice Hubert H. Humphrey School of Public Affairs University of Minnesota
Living in the Shadows or Government Dependents: Immigrants and Welfare in the United States Charles Weber Harvard University May 2015 Abstract Are immigrants in the United States more likely to be enrolled
Upjohn Institute Working Papers Upjohn Research home page 1995 Job Growth and the Quality of Jobs in the U.S. Economy Susan N. Houseman W.E. Upjohn Institute Upjohn Institute Working Paper No. 95-39 Published
B2v8:0f XML:ver::0: RLEC V024 : 2400 /0/0 :4 Prod:Type:com pp:2ðcol:fig::nilþ ED:SeemaA:P PAGN: SCAN: 2 IMMIGRANTS IN THE ISRAELI HI- TECH INDUSTRY: COMPARISON TO NATIVES AND THE EFFECT OF TRAINING Sarit
Entrepreneurship among California s Low-skilled Workers April 2010 Magnus Lofstrom with research support from Qian Li and Jay Liao Summary Self-employment has grown significantly in California over the
DISCUSSION PAPER SERIES IZA DP No. 3732 The Transmission of Women s Fertility, Human Capital and Work Orientation across Immigrant Generations Francine D. Blau Lawrence M. Kahn Albert Yung-Hsu Liu Kerry
OTTO-VON-GUERICKE-UNIVERSITY MAGDEBURG FACULTY OF ECONOMICS AND MANAGEMENT The Immigrant Wage Gap in Germany Alisher Aldashev, ZEW Mannheim Johannes Gernandt, ZEW Mannheim Stephan L. Thomsen FEMM Working
Catalogue no. 11F0019M No. 329 ISSN 1205-9153 ISBN 978-1-100-17669-7 Research Paper Analytical Studies Branch Research Paper Series Do Highly Educated Immigrants Perform Differently in the Canadian and
NBER WORKING PAPER SERIES THE LABOR MARKET IMPACT OF HIGH-SKILL IMMIGRATION George J. Borjas Working Paper 11217 http://www.nber.org/papers/w11217 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts
How s Life in Ireland? November 2017 Relative to other OECD countries, Ireland s performance across the different well-being dimensions is mixed. While Ireland s average household net adjusted disposable
Georgia s Immigrants: Past, Present, and Future Douglas J. Krupka John V. Winters Fiscal Research Center Andrew Young School of Policy Studies Georgia State University Atlanta, GA FRC Report No. 175 April
Immigration and the Labour Market Outcomes of Natives in Developing Countries: A Case Study of South Africa Nzinga H. Broussard Preliminary Please do not cite. Revised July 2012 Abstract According to the
The Decline in Earnings of Childhood Immigrants in the U.S. Hugh Cassidy October 30, 2015 Abstract Recent empirical work documenting a declining trend in immigrant earnings relative to natives has focused
NBER WORKING PAPER SERIES WHY DON T MORE PUERTO RICAN MEN WORK? THE RICH UNCLE (SAM) HYPOTHESIS María E. Enchautegui Richard B. Freeman Working Paper 11751 http://www.nber.org/papers/w11751 NATIONAL BUREAU
How s Life in Italy? November 2017 Relative to other OECD countries, Italy s average performance across the different well-being dimensions is mixed. The employment rate, about 57% in 2016, was among the
How s Life in the Netherlands? November 2017 In general, the Netherlands performs well across the OECD s headline well-being indicators relative to the other OECD countries. Household net wealth was about
Cyprus Economic Policy Review, Vol. 1, No. 2, pp. 37-49 (2007) 1450-4561 The Impact of Foreign Workers on the Labour Market of Cyprus Louis N. Christofides, Sofronis Clerides, Costas Hadjiyiannis and Michel
EMBARGOED UNTIL THURSDAY 9/5 AT 12:01 AM Poverty matters No. 1 It s now 50/50: chicago region poverty growth is A suburban story Nationwide, the number of people in poverty in the suburbs has now surpassed
Institute for Public Policy and Economic Analysis The Institute for Public Policy and Economic Analysis at Eastern Washington University will convey university expertise and sponsor research in social,
EMPLOYMENT AND QUALITY OF LIFE IN THE MISSISSIPPI DELTA A Summary Report from the 2003 Delta Rural Poll Alan W. Barton September, 2004 Policy Paper No. 04-02 Center for Community and Economic Development
How s Life in Austria? November 2017 Austria performs close to the OECD average in many well-being dimensions, and exceeds it in several cases. For example, in 2015, household net adjusted disposable income
How s Life in Portugal? November 2017 Relative to other OECD countries, Portugal has a mixed performance across the different well-being dimensions. For example, it is in the bottom third of the OECD in
How s Life in New Zealand? November 2017 On average, New Zealand performs well across the different well-being indicators and dimensions relative to other OECD countries. It has higher employment and lower
Institute for International Economic Policy Working Paper Series Elliott School of International Affairs The George Washington University Travel Time Use Over Five Decades IIEP WP 2016 24 Chao Wei George
S U R V E Y B R I E F ASSIMILATION AND LANGUAGE March 004 ABOUT THE 00 NATIONAL SURVEY OF LATINOS In the 000 Census, some 5,06,000 people living in the United States identifi ed themselves as Hispanic/Latino.
How s Life in Hungary? November 2017 Relative to other OECD countries, Hungary has a mixed performance across the different well-being dimensions. It has one of the lowest levels of household net adjusted
Pulling Open the Sticky Door Social Mobility among Latinos in Nebraska Lissette Aliaga-Linares Social Demographer Office of Latino/Latin American Studies (OLLAS) University of Nebraska at Omaha Overview
Discussion comments on Immigration: trends and macroeconomic implications William Wascher I would like to begin by thanking Bill White and his colleagues at the BIS for organising this conference in honour
BUDGET & TAX CENTER December 2017 ENJOY READING THESE REPORTS? Please consider making a donation to support the Budget & tax Center at www.ncjustice.org MEDIA CONTACT: PATRICK McHUGH 919/856-2183 firstname.lastname@example.org
Class: Date: Macro CH 21 sample questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Which of the following conducts the Current Population Survey?
Immigrant Wages and Recessions: Evidence from Undocumented Mexicans Rebecca Lessem and Kayuna Nakajima March 11, 2016 Abstract We study the impact of recessions on the real wages of undocumented immigrants
Comments Welcome Immigrants and the Receipt of Unemployment Insurance Benefits Wei Chi University of Minnesota email@example.com and Brian P. McCall University of Minnesota firstname.lastname@example.org July 2002
Institute for Public Policy and Economic Analysis The Institute for Public Policy and Economic Analysis at Eastern Washington University will convey university expertise and sponsor research in social,
Preliminary draft, not to be quoted without the authors' permission, comments welcome Real Wages and Unemployment in the Big Squeeze Paul Gregg * and Stephen Machin ** November 2012 * Department of Social
History of Immigration to Texas For most of its history, Texas has attracted settlers from the rest of the nation rather than abroad Mexican immigrants did not begin to settle permanently until late 1970s
How s Life in the United States? November 2017 Relative to other OECD countries, the United States performs well in terms of material living conditions: the average household net adjusted disposable income
Immigrant Entrepreneurship: Trends and Contributions Magnus Lofstrom Edward Lazear, Stanford economics professor and former chairman of the President s Council of Economic Advisers, has said, The entrepreneur
Undocumented Immigration to California: 1980-1993 Hans P. Johnson September 1996 Copyright 1996 Public Policy Institute of California, San Francisco, CA. All rights reserved. PPIC permits short sections
Remittances and the Brain Drain: Evidence from Microdata for Sub-Saharan Africa Julia Bredtmann 1, Fernanda Martinez Flores 1,2, and Sebastian Otten 1,2,3 1 RWI, Rheinisch-Westfälisches Institut für Wirtschaftsforschung
Environment and Planning A 2006, volume 38, pages 1505 ^ 1525 DOI:10.1068/a37246 The migration ^ immigration link in Canada's gateway cities: a comparative study of Toronto, Montreal, and Vancouver Feng
The Labour Market Adjustment of Immigrants in New Zealand Steven Stillman and David C. Maré Motu Working Paper [Enter Number (Office Use)] Motu Economic and Public Policy Research March 2009 Author contact
Retrospective Voting Who Are Retrospective Voters and Does it Matter if the Incumbent President is Running Kaitlin Franks Senior Thesis In Economics Adviser: Richard Ball 4/30/2009 Abstract Prior literature
How s Life in Estonia? November 2017 Relative to other OECD countries, Estonia s average performance across the different well-being dimensions is mixed. While it falls in the bottom tier of OECD countries
CROSS-COUNTRY VARIATION IN THE IMPACT OF INTERNATIONAL MIGRATION: CANADA, MEXICO, AND THE UNITED STATES Abdurrahman Aydemir Statistics Canada George J. Borjas Harvard University Abstract Using data drawn
Why Are Fewer Workers Earning Middle Wages and Is It a Bad Thing? Jennifer Hunt Rutgers University Ryan Nunn The Hamilton Project February 10, 2017 Hunt: email@example.com. Nunn: firstname.lastname@example.org.
How s Life in the United Kingdom? November 2017 On average, the United Kingdom performs well across a number of well-being indicators relative to other OECD countries. At 74% in 2016, the employment rate
How s Life in Korea? November 2017 Relative to other OECD countries, Korea s average performance across the different well-being dimensions is mixed. Although income and wealth stand below the OECD average,
DISCUSSION PAPER SERIES IZA DP No. 731 Educational Attainment: Analysis by Immigrant Generation Barry R. Chiswick Noyna DebBurman February 2003 Forschungsinstitut zur Zukunft der Arbeit Institute for the
FACT SHEET CIRCLE The Center for Information & Research on Civic Learning & Engagement The Youth Vote 2004 By Mark Hugo Lopez, Emily Kirby, and Jared Sagoff 1 July 2005 Estimates from all sources suggest
Rethinking the Area Approach: Immigrants and the Labor Market in California, 1960-2005. Giovanni Peri, (University of California Davis, CESifo and NBER) October, 2009 Abstract A recent series of influential
How s Life in Mexico? November 2017 Relative to other OECD countries, Mexico has a mixed performance across the different well-being dimensions. At 61% in 2016, Mexico s employment rate was below the OECD
Sandra Schaffner #118 Ruhr Economic Papers Ruhr Economic Papers Published by Ruhr-Universität Bochum (RUB), Department of Economics Universitätsstr. 150, 44801 Bochum, Germany Technische Universität Dortmund,
The International Asian Business Success Story: A Comparison of Chinese, Indian and Other Asian Businesses in the United States, Canada and United Kingdom NBER Volume on International Differences in Entrepreneurship
Introducing a New Data Resource For Policy and Planning Applications Demographic Futures for California Projections 1970 to 2020 that Include a Growing Immigrant Population With Changing Needs and Impacts
Second-Generation Immigrants? The 2.5 Generation in the United States n S. Karthick Ramakrishnan, Public Policy Institute of California Objective. This article takes issue with the way that second-generation
UNRWA PO Box 19149 Sheikh Jarrah East Jerusalem +97225890400 SUMMARY Contrary to media reports of a flourishing West Bank economy, evidence from the second half of 2010 shows deteriorating labour market
Labor Force Statistics Vol. 1: and Underemployment Report (Q1-Q3 2017) Report Date: December 2017 Contents Summary 1 Definition and Methodology 3 Labor Force and Non-Labor Force and Underemployment 3 8
Languages of work and earnings of immigrants in Canada outside Quebec By Jin Wang (7356764) Major paper presented to the Department of Economics of the University of Ottawa in partial fulfillment of the
Peruvians in the United States 1980 2008 Center for Latin American, Caribbean & Latino Studies Graduate Center City University of New York 365 Fifth Avenue Room 5419 New York, New York 10016 212-817-8438
How s Life in Finland? November 2017 In general, Finland performs well across the different well-being dimensions relative to other OECD countries. Despite levels of household net adjusted disposable income
How s Life in the Czech Republic? November 2017 Relative to other OECD countries, the Czech Republic has mixed outcomes across the different well-being dimensions. Average earnings are in the bottom tier