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 United States’ economy.
Highlights from the most recent BLS and ACS data include the following takeaways:
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 2021, the U.S. population of 332.0 million included 45.3 million foreign-born individuals, or roughly 14.0 percent. That percentage has varied throughout history. In 1970, for example, foreign-born individuals composed only 5.0 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.
Foreign-born individuals typically earn less than native-born individuals — on average, 89 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 $1,521 per week in 2021, which was $81 per week higher than the median for the native-born population with that level of education.
Education Level | Median Weekly Earnings | |
---|---|---|
Native Born | Foreign Born | |
Less than a high school diploma | $699 | $610 |
Highschool graduate, no college | 826 | 735 |
Some college or associate degree | 934 | 846 |
Bachelor’s degree or more | 1,440 | 1,521 |
All Education Levels | 1,091 | 921 |
SOURCE: Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics —2021, May 2022.
NOTES: The foreign-born population is defined as persons residing in the United States who were not U.S. citizens at birth. The foreign-born population includes legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. Data above are for individuals age 25 and older.
© 2022 Peter G. Peterson Foundation
A different story emerges when analyzing the data by race. 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 considerably less (13 percent) than the native born.
Race/Ethnicity | Median Weekly Earnings | |
---|---|---|
Native Born | Foreign Born | |
White | $1,106 | $1,276 |
Asian | 1,272 | 1,371 |
Black | 799 | 859 |
Hispanic or Latino | 846 | 713 |
SOURCE: Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics —2020, May 2021.
NOTES: The foreign-born population is defined as persons residing in the United States who were not U.S. citizens at birth. The foreign-born population includes legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. The race and ethnicity categories above are mutually exclusive but not exhaustive.
© 2022 Peter G. Peterson Foundation
From 2007 through 2018, the unemployment rate for foreign-born individuals tended to be higher than the unemployment rate for native-born individuals. The gap reached a peak of 1.5 percentage points in 2009. The trend was interrupted in 2019, but switched back again in 2020, when the coronavirus (COVID-19) pandemic and resulting economic recession disproportionately affected employment for the foreign-born labor force. The unemployment rate for foreign-born workers rose in 2020 to 8.9 percent, or 2.2 percentage points higher than that of the native-born workforce. In 2021, that gap narrowed slightly, but foreign-born workers still had a higher unemployment rate than the native born.
Meanwhile, the foreign-born population has consistently shown a higher rate of labor force participation. According to BLS, 65.7 percent of the foreign-born population age 25 and older participated in the labor force in 2021, while the native-born rate was 62.0 percent. That difference of 3.7 percentage points means that a significantly larger share of the foreign-born population is either employed or unemployed and looking for work.
Although the foreign-born population has an overall higher labor force participation rate, it varies among age group. For example, the native-born population age 25 to 34 had a labor force participation rate of 82.8 percent in 2021, which was 5.6 percentage points higher than the corresponding foreign-born population. However, for the 55- to 64- year-old age group, foreign-born individuals participated in the labor force at a rate that was 4.5 percentage points higher than that of the native-born population.
Age Group | Labor Force Participation Rate | |
---|---|---|
Native Born | Foreign Born | |
16 to 24 | 55.8% | 53.0% |
25 to 34 | 82.8 | 77.2 |
35 to 44 | 82.8 | 79.3 |
45 to 54 | 81.0 | 79.6 |
55 to 64 | 63.8 | 68.3 |
65 and older | 18.7 | 19.7 |
SOURCE: Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics —2021, May 2022.
NOTES: The foreign-born population is defined as persons residing in the United States who were not U.S. citizens at birth. The foreign-born population includes legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants.
© 2022 Peter G. Peterson Foundation
The native-born population has a slightly higher level of educational attainment than does the foreign-born population. In 2021, 35.3 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 33.8 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.
The ACS collects data each year about the English proficiency of individuals age 5 or older. Data from the survey showed that in 2021, 17.0 percent of the foreign-born population spoke only English at home. A further 37.0 percent spoke English “very well” in addition to speaking one or more other languages. The remaining share of foreign-born individuals, nearly half of the total, characterize their skills in English as less proficient.
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.
Related: Income and Wealth in The United States: An Overview of Recent Data
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