Here’s What We Know about Foreign-Born Workers, and How They Compare to the Native-Born Population
Last Updated July 18, 2024
Foreign born workers make up 17 percent of the U.S. labor force. Understanding the differences between foreign and native-born workers sheds light on important details of the U.S. economy, with implications for our budget and policy choices. Annual data published by the Bureau of Labor Statistics (BLS), as well as data from the American Community Survey (ACS), provide a useful look at the significant contributions that foreign-born individuals make to the U.S. economy.
Highlights from the most recent BLS and ACS data include the following takeaways:
- There were 31 million foreign-born workers in the United States in 2023, who made up 19 percent of the total workforce.
- Overall, foreign-born workers earn 87 percent as much as native-born workers; however, foreign-born workers that are age 25 or older with at least a bachelor’s degree earn slightly more than native-born workers with those characteristics.
- The gap between foreign and native-born unemployment widened in 2023, partially reversing a post-pandemic trend towards convergence.
- The foreign-born population has a higher rate of labor force participation than the native-born population.
- The share of foreign-born adults with at least a bachelor’s degree is lower than the share of native-born adults with that level of education. However, foreign-born individuals from several regions of the world earn bachelor’s degrees at higher rates than the native-born population.
How Do We Define “Foreign-Born”?
According to BLS, the foreign-born population is defined as “persons residing in the United States who were not U.S. citizens at birth.” That includes “legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants.” Conversely, BLS defines the native-born population as “persons born in the United States or one of its outlying areas such as Puerto Rico or Guam or who were born abroad of at least one parent who was a U.S. citizen.”
In 2022, the U.S. population of 333 million included 46 million foreign-born individuals, or roughly 14 percent. That percentage has varied throughout history. In 1960, for example, foreign-born individuals composed only 5 percent of the total population. At other points in history, such as the late 1800s, the foreign-born population was about the same share of the population as it is today.
How Much Do Foreign-Born Workers Earn?
Foreign-born individuals typically earn less than native-born individuals — 87 cents for every dollar earned by their native-born counterparts. That disparity generally holds true across age groups and education levels, with one significant exception. Foreign-born individuals with a bachelor’s degree or more had median weekly earnings of $1,637 in 2023, $35 higher than the native-born median.
A different story emerges when analyzing the data by race and ethnicity. For White, Black, and Asian workers, foreign-born individuals earn slightly more than those who are native-born. However, for workers who are Hispanic or Latino, the foreign born earn just 84 cents for every dollar earned by the native born.
Employment Rates of Foreign-Born Workers
Over the past several years, the unemployment rate for foreign-born individuals tended to be higher than the unemployment rate for native-born individuals. Historically, the gap has widened during recessionary periods — reaching 1.5 percentage points in the aftermath of the 2008 financial crisis and 2.2 percentage points during the COVID-19 pandemic. In 2022, the gap closed to 0.1 percentage points as unemployment neared pre-pandemic levels for both populations, but 2023 saw a tick upwards in foreign-born unemployment, widening the gap to 0.4 percentage points.
Meanwhile, the foreign-born population has consistently shown a higher rate of labor force participation. According to BLS, 68 percent of the foreign-born population age 25 and older participated in the labor force in 2023, while the native-born rate was 63 percent. That 5 point difference means that a significantly larger share of the foreign-born population is either employed or actively looking for work.
Although the foreign-born population has an overall higher labor force participation rate, it varies by age group. For example, the native-born population age 25 to 34 had a labor force participation rate of 85 percent in 2023, which was 5 percentage points higher than the corresponding foreign-born population. However, for 55 to 64 year-olds, foreign-born individuals participated in the labor force at a rate that was nearly 6 percentage points higher than that of the native-born population.
Education Level of Foreign-Born Workers
The native-born population has a slightly higher level of educational attainment than does the foreign-born population. In 2023, 35.9 percent of the native-born population age 25 and older had a bachelor’s degree or more. For the foreign-born population age 25 and older, the percentage with a bachelor’s degree or more was 34.7 percent.
However, foreign-born individuals from several regions of the world have considerably higher levels of educational attainment than the foreign-born population as a whole. Those who are now living in the United States but were born in South Central Asia, East Asia, Europe, and Africa are more likely to have bachelor’s degrees than the native-born population of the United States.
English Proficiency Among Foreign-Born Individuals
The ACS collects data each year about the English proficiency of individuals age 5 or older. Data from the survey showed that in 2023, 17 percent of the foreign-born population spoke only English. A further 37 percent spoke English “very well”. The remaining share of foreign-born individuals, nearly half of the total, characterize their skills in English as less than “very well”.
The U.S. labor force is changing in many ways. A substantial part of the labor force is foreign born, so an understanding of that population’s characteristics is key to understanding the overall economy. The information provided by BLS and the ACS on the foreign-born workforce can help policymakers as they consider legislation aimed at promoting a healthy economy.
Further Reading
What Is the Disaster Relief Fund?
Climate and weather-related natural disasters are becoming increasingly frequent. In addition to endangering lives, they are economically costly.
The Fed Reduced Short-Term Rates, but Interest Costs Remain High
Higher short- and long-term Treasury rates mean that the federal government’s borrowing costs will also rise.
What is Inflation and Why Does it Matter?
Here’s an overview of inflation, why it matters, and how it’s managed.