Monthly Labor Review May 2002 3

The role of foreign-born

workers in the U. S. economy

Foreign-born workers have come to play

an increasingly important role in the U.S. economy;

between 1996 and 2000, they constituted

nearly half of the net increase

in the U.S. labor force

Abraham T.

Mosisa

Abraham T.

Mosisa is an

economist in the

Division of Labor

Force Statistics,

Bureau of Labor

Statistics.

E-mail:

Mosisa_A@bls.gov

A

s the 21st century begins, the ethnic and

racial composition of the U.S. workforce

continues to diversify at a rapid pace.

Much of that change reflects an expansion in the

share of foreign-born workers, from about 1 in 17

in 1960 to 1 in 8 workers today.1 Additionally, the

geographic areas of origin of those workers have

shifted. In 1960, about 3 in 4 of the foreign born

had come from Europe; today, that proportion is

less than 1 in 6, largely reflecting the influx of

immigrants from Latin America and Asia. The

large increase in the number of foreign-born

workers, which has occurred in recent years, has

contributed to the U.S. labor force expansion during that period. Between 1996 and 2000, the foreign born constituted nearly half of the net labor

force increase.2

This article first reviews the history of immigration, focusing on the changing national origins

of the foreign born; then, it presents a comparison

of labor force characteristics of the foreign-born

population with those of the native-born population; and finally, discusses the role of the foreign

born in regards to the labor force growth that occurred between 1996 and 2000.3

 In this article,

contrary to the customary BLS practice of counting

Hispanics (an ethnic group) as part of the race category to which they belong, Hispanics are not included in the estimates for whites, blacks, and

Asians, but, instead, are shown separately.4 This

was done because currently Hispanics constitute a

large proportion of the foreign born, and they have

distinctive characteristics, which will be outlined

further throughout this article. Hence, if they were

included in the estimates for the major race group,

clear-cut comparisons of employment characteristics among the groups would be difficult to make.

The data used in this study are primarily from the

Current Population Survey (CPS), the monthly survey of about 60,000 households conducted by the

Bureau of the Census for the Bureau of Labor Statistics.5

Whence come the foreign born?

Over the past 2 centuries, the geographic sources

of immigration to the United States have changed.6

During the 18th and much of the 19th centuries,

immigrants generally came from two areas of the

world, Northern Europe and Africa. Most often,

the European immigrants came from the British

Isles, with a major influx moving from Ireland

The Role of Foreign-born Workers
4 Monthly Labor Review May 2002

The Role of Foreign-born Workers

around the middle of the 19th century, as large numbers of the

Irish fled starvation and disease, brought about by the potato

blight that struck much of Europe at that time. The African

slave trade, which had begun during the Colonial era to provide workers in the New World, continued through most of

the first half of the 19th century, despite laws that attempted

to ban it.7

Moreover, Asia was a source of immigrants after 1848, as

Chinese contract laborers were brought largely to the West

Coast to work both in the gold mines and on the transcontinental railway. The large influx of Chinese laborers, however,

was ended with the Chinese exclusionary legislation that forbade Chinese immigration.8

By the early 1900s, European immigration patterns had

shifted, with the majority of the newcomers arriving from

southern and eastern Europe. These people were often

poorly educated and came from areas with cultural and linguistic traditions that were considerably different from those

of northwestern Europe. Further, among the Europeans

immigrating to the new country were sizable numbers of

Roman Catholics.9

In 1917, Congress passed a Literacy Act to restrict European immigration, and in 1921, the Emergency Quota Act was

also passed, which applied immigration quotas based on nationality or country of origin. The provisions of this act were

extended and made more restrictive by the National Origins Act of 1924. The quota system was reaffirmed in the

Immigration and Nationality Act of 1952. Aside from a few

exceptions, these quotas remained relatively intact until the

Immigration and Nationality Act of 1965 was passed, which

eliminated the system of national origin, race, or ancestry

quotas for immigration to the United States.

Not only did the new act lead to a substantial increase in

immigration, but also to a change in the geographic origin of

immigrants. Between 1960 and 2000, the proportion of the

foreign-born population that had come from Europe dropped

from 74.5 percent to 15.3 percent, while the proportion

coming from Latin America increased from 9.3 percent to 51

percent. (See table 1.)

Regional data, however, do not accurately capture the wideranging diversity of immigrants; it is better understood when

examined by country of origin. As shown in the box, the top

ten leading countries of birth of the foreign-born population

in 2000 were Mexico, the Philippines, India, China, Cuba, El

Salvador, Vietnam, South Korea, Canada, and the Dominican

Republic.

Labor force status of the foreign born

Overall, the foreign born are less likely than the native born

to participate in the U.S. labor force, primarily because foreign-born women are considerably less likely than their

native-born counterparts, overall, to be working or looking for work. Some of the reasons for this are discussed

below. (See table 2.) Foreign-born men—even though they

(like foreign-born women) tend to be less educated than native-born men—are more likely to be labor force participants

than their native-born counterparts, except for college

graduates, a category in which the two groups’ participaMexico ..................... 7,870.6 Greece .......................... 112.7

Philippines ............... 1,227.1 Argentina ...................... 112.3

India ........................ 1,027.3 Nigeria .......................... 106.1

China ......................... 948.4 Lebanon ........................ 101.2

Cuba ......................... 922.3 Israel .............................. 94.4

El Salvador ................. 795.7 Scotland .......................... 92.9

Vietnam ..................... 777.7 Indonesia ........................ 87.7

Korea/South ............... 715.2 Turkey ............................ 86.2

Canada ...................... 688.0 Romania ......................... 85.9

Dominican Republic ..... 600.6 Ghana ............................ 83.7

Germany .................... 598.2 Laos ............................... 81.0

Jamaica ..................... 488.4 Armenia .......................... 80.9

Colombia ................... 483.5 Holland/Netherlands ......... 80.3

England ..................... 479.3 Hungary .......................... 79.7

Haiti ........................... 463.5 Bangladesh ..................... 79.0

Italy ........................... 437.6 South Africa ..................... 77.1

Russia ....................... 431.8 Iraq ................................ 76.2

Poland ....................... 430.4 Chile ............................... 74.9

Taiwan ....................... 316.1 Spain .............................. 71.1

Japan ........................ 306.3 Dominica ......................... 67.2

Peru .......................... 293.6 Ethiopia .......................... 67.0

Guatemala ................. 277.5 Panama .......................... 64.8

Ukraine ...................... 275.5 Austria ............................ 64.5

Iran ........................... 270.4 Costa Rica ...................... 52.0

Honduras ................... 256.8 Uruguay .......................... 51.9

Nicaragua .................. 253.8 Lithuania ......................... 48.9

Ecuador ..................... 241.8 Sweden .......................... 47.9

Pakistan ...................... 211.5 Barbados ........................ 47.2

Guyana ...................... 210.5 Switzerland ..................... 45.1

Hong Kong ................. 192.0 Malaysia ......................... 43.3

Trinidad and Tobago .... 178.8 Syria ............................... 42.4

Ireland/Eire ................. 170.9 Afghanistan ..................... 40.5

Brazil ......................... 169.2 Bolivia ............................ 39.2

Portugal ..................... 154.8 Jordan ............................ 38.5

Thailand ..................... 131.1 Australia ......................... 37.1

Yugoslavia .................. 128.3 Belize ............................. 37.0

Egypt ......................... 120.2 Morocco .......................... 35.2

Venezuela ................... 115.7 Burma ............................. 34.0

France ........................ 114.9 Azores ............................ 31.8

Cambodia ................... 114.9

[Numbers in thousands]

Foreign-born population

by country of birth,

annual averages, 2000

Country1 Population Country1 Population

1

 Country not shown where the number is under 30,000.

SOURCE: Current Population Survey.
Monthly Labor Review May 2002 5

Total foreign born

 (in thousands) .................................... 2,245 10,341 9,738 9,619 14,080 19,767 28,379

Percent distribution

Total ................................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Europe ............................................. 90.5 85.9 74.5 59.7 36.6 22.0 15.3

Northern and Western ...................... 90.1 69.7 34.2 27.3 16.9 10.4 6.7

Ireland ........................................... 42.8 15.6 3.5 2.6 1.4 .9 .7

Southern and Eastern ...................... 4.0 16.2 40.1 32.1 19.5 11.6 8.4

Asia ................................................. 1.0 1.2 5.0 8.6 18.0 25.2 25.5

China ............................................

(3) .8 1.0 1.8 2.0 2.7 4.9

Latin America .................................... .9 1.3 9.3 18.8 31.1 42.5 51.0

Mexico ........................................... .6 1.0 5.9 7.9 15.6 21.7 27.6

Other4.............................................. 8.5 11.6 11.1 13.0 14.3 10.3 8.1

Geographic area of birth of the foreign-born population in the United States, 1850–2000

Geographic area

Table 1.

1

 Data are from the U.S. Census Bureau, Public-Use Microdata Samples

(PUMS).

2

 Data from the March Current Population Survey.

3

 Less than 0.05 percent.

4 Other includes Africa, Oceania, North America, and not reported.

18501 19001 19601 19701 19801 19901 20002

Year

tion rates were about the same.

Participation rates among women. For women, the difference was greatest for those aged 16 to 24 and 25 to 34, where

the participation rates for the foreign born were about 17 percentage points lower than those of their native-born counterparts. (See table 3.) A number of factors appear to play a role

in the differences between these two groups of young women,

including marital status, the presence of children, and, probably most importantly, education.

Among the 16- to 24-year-olds, a higher percentage of

the foreign-born women had not completed high school, comTotal ......................................................................... 209,699 26,527 12.7 183,173

In labor force ........................................................... 140,863 17,705 12.6 123,158

Labor force participation rate .................................. 67.2 66.7 – 67.2

Employed ............................................................... 135,208 16,954 12.5 118,254

Employment-population ratio .................................. 64.5 63.9 – 64.6

Unemployed ........................................................... 5,655 751 13.3 4,904

Unemployment rate ............................................... 4.0 4.2 – 4.0

Not in the labor force ................................................ 68,836 8,821 12.8 60,015

Men .......................................................................... 100,731 13,106 13.0 87,625

In labor force ........................................................... 75,247 10,462 13.9 64,785

Labor force participation rate .................................. 74.7 79.8 – 73.9

Employed ............................................................... 72,293 10,067 13.9 62,226

Employment-population ratio .................................. 71.8 76.8 – 71.0

Unemployed ........................................................... 2,954 396 13.4 2,559

Unemployment rate ............................................... 3.9 3.8 – 3.9

Not in the labor force ................................................ 25,484 2,644 10.4 22,840

Women ..................................................................... 108,968 13,420 12.3 95,548

In labor force ........................................................... 65,616 7,243 11.0 58,373

Labor force participation rate .................................. 60.2 54.0 – 61.1

Employed ............................................................... 62,915 6,887 10.9 56,028

Employment-population ratio .................................. 57.7 51.3 – 58.6

Unemployed ........................................................... 2,701 356 13.2 2,345

Unemployment rate ............................................... 4.1 4.9 – 4.0

Not in the labor force ................................................ 43,352 6,177 14.2 37,175

Labor force status and country of birth Total Native born

Total Percent of total

Table 2.

[Numbers in thousands]

Employment status of the civilian population 16 years and older, by sex, annual averages, 2000

Foreign born
6 Monthly Labor Review May 2002

The Role of Foreign-born Workers

pared with the native-born. Not surprisingly, among both

groups, the participation rates for those without a high school

diploma were lower than the rates for those with more education. However, the participation rate for the foreign born without a high school diploma was considerably lower than that

for the native born. At least in part, this is because the foreign

born who had not graduated from high school were almost 5

times as likely to be married and more than twice as likely to

have children than their native-born counterparts; being married or having children tends to reduce women’s likelihood of

being in the labor force.

In addition, the foreign born aged 16 to 24, who had attended or graduated from college, were also markedly less

likely than their native-born counterparts to be in the labor

force. In this instance, however, there is relatively little difference in the proportions who are married or have children.

Participation rate differences among high school graduates

who did not go to college were much smaller.

Among those women who were 25 to 34, the lower overall

participation rate for the foreign born has varying causes. In

part, the fact that a larger proportion of the foreign born do

not have a high school diploma is reflected in their participation rates, which are usually lower than the rates of bettereducated people. Even so, this is not the entire explanation,

because the better-educated foreign born also are less likely

to be labor force participants when compared with their native-born counterparts. Among those with a high school diploma or those with some college but no degree, the lower

participation rates of the foreign born may reflect to some

extent their greater likelihood of being married or having children. Among those with college degrees, the lower participation rate of the foreign born may also be due in part to the

higher proportion who are married. Both foreign-born and

native-born college graduates are about equally likely to have

children.

Race and Hispanic origin. Among the foreign-born population, labor force participation rates for whites were lower than

for any other race/ethnic group. (See table 3.) This occurred

at least partly because foreign-born whites are older on balance than are other groups, and labor force participation falls

dramatically after age 55, as indicated in the following tabulation. (As noted earlier, prior to the Immigration and Naturalization Act of 1965, immigrants to the United States came

Age

Total, 16 years and older ...................................... 66.7 67.2 79.8 73.9 54.0 61.1

16 to 24 years ..................................................... 60.2 66.6 70.6 68.4 47.8 64.9

25 to 34 years ..................................................... 77.0 86.2 92.1 93.6 61.4 79.2

35 to 44 years ..................................................... 82.1 85.3 94.0 92.4 69.7 78.4

45 to 54 years ..................................................... 80.0 82.9 88.4 88.3 69.6 77.8

55 to 64 years ..................................................... 59.1 59.2 73.6 66.5 47.3 52.4

65 years and older ............................................... 12.1 12.9 18.6 17.4 7.4 9.6

Education1

Less than a high school diploma ............................ 59.0 37.4 78.0 46.7 41.4 29.2

High school graduates, no college ......................... 66.5 64.4 81.4 74.3 54.1 55.9

Some college, no degree ...................................... 72.5 72.2 81.7 79.2 63.9 65.9

College graduates ............................................... 76.9 79.9 85.3 84.3 67.4 75.2

Race/ethnicity

White, non-Hispanic ............................................. 59.1 67.6 71.0 74.9 48.0 60.8

Black, non-Hispanic ............................................. 75.0 64.9 80.6 67.6 69.4 62.8

Asian, non-Hispanic ............................................. 67.3 66.1 77.8 70.0 58.2 62.3

Hispanic origin .................................................... 69.5 67.7 85.4 74.8 52.5 61.4

1 Educational attainment data are for persons 25 years and older.

Table 3. Labor force participation rates of the foreign born and native born by selected demographic

characteristics, annual averages, 2000

Total Men Women

Foreign Native Foreign Native Foreign Native

born born born born born born

Characteristic
Monthly Labor Review May 2002 7

primarily from Europe. In subsequent decades, immigrants

have increasingly come from Asia and Central and South

America.)

 White, non-Hispanic

Native born ............................. 29.6 32.5

Foreign born ........................... 37.1 29.1

 Black, non-Hispanic

Native born ............................. 21.1 29.0

Foreign born ........................... 14.4 48.4

 Asian, non-Hispanic

Native born ............................. 15.4 31.3

Foreign born ........................... 19.8 38.3

 Hispanic

Native born ............................. 16.1 31.4

Foreign born ........................... 16.1 35.0

Among blacks, Asians, and Hispanics, the participation

rates for the foreign born were either about the same as those

of their native-born counterparts, or, as in the case of blacks,

much higher. In contrast, foreign-born whites were less likely

than their native-born counterparts to be labor force participants. For both Asians and Hispanics, the similarity in overall

participation rates between the foreign born and native born

was due to the fact that the participation rates for the foreignborn women in these groups were lower than those of the native-born women, offsetting the much higher rates of the foreign-born men. Among blacks, the participation rates for both

foreign-born men and women were much higher than those of

their native-born counterparts. (See table 3.)

Education. For the foreign born and the native born 25 years

of age and older, labor force participation is quite similar at

each education level, except for those without high school

diplomas. Approximately 59 percent of the foreign born, who

were not high school graduates were in the labor force, compared with 37.4 percent of the native born. This probably reflects the economic motivation many had for coming to this

country, as well as the fact that they are younger, on average,

Age

Total, 16 years and older ....................... 4.2 4.0 3.8 3.9 4.9 4.0

16 to 24 years ...................................... 7.9 9.5 7.4 10.0 8.7 8.9

25 to 34 years ...................................... 3.9 3.7 3.1 3.5 5.1 3.9

35 to 44 years ...................................... 3.8 2.9 3.2 2.7 4.7 3.1

45 to 54 years ...................................... 3.2 2.4 2.9 2.4 3.5 2.3

55 to 64 years ...................................... 3.9 2.3 3.8 2.3 4.1 2.3

65 years and older ................................ 4.1 3.0 4.7 3.2 3.1 2.7

Education1

Less than a high school diploma ............. 5.8 6.7 4.6 6.0 7.8 7.8

High school graduates, no college .......... 3.3 3.5 2.9 3.5 3.9 3.5

Some college, no degree ....................... 3.3 2.8 3.0 2.6 3.7 3.0

College graduates ................................ 2.3 1.6 2.1 1.4 2.6 1.7

Race/ethnicity

White, non-Hispanic .............................. 3.2 3.2 2.9 3.2 3.6 3.2

Black, non-Hispanic .............................. 5.4 7.9 5.5 8.5 5.2 7.4

Asian, non-Hispanic .............................. 3.2 4.7 3.2 4.9 3.2 4.5

Hispanic origin ..................................... 5.1 6.4 4.2 6.0 6.7 6.8

1

 Educational attainment data are for persons 25 years and older.

Unemployment rates of the foreign born and native born by selected demographic characteristics,

annual averages, 2000

Characteristic

Foreign Native Foreign Native Foreign Native

born born born born born

Total Men Women

Percent

Labor force

participation

rate

Country of birth, 55 years and older

race, and ethnic

origin

Table 4.
8 Monthly Labor Review May 2002

The Role of Foreign-born Workers

Understanding the educational characteristics of the foreign-born population is key to interpreting several features of their labor-force patterns, in particular, their occupational distribution. The foreign-born population tends

to be divided mainly into two educational categories: those

with relatively high levels of education and those with

relatively low levels, with few in-between the two categories. (See chart below.) When the educational attainment

of the foreign-born and native-born populations, 25 years

and older are compared, the foreign born are much more

likely to have left school before completing a high school

diploma than are the native born, but about as likely to

have college degrees as the native-born population.1

This phenomenon is due to the large share of immigrants now coming from Latin America and Mexico in

particular. In 2000, about half of the foreign-born population was from Latin America, including Mexico. Educational levels among foreign-born Hispanics differ

The foreign born and education

sharply from the other ethnic groups. About 55 percent of

the foreign-born Hispanic population 25 years and older

had less than a high school education, while 9.5 percent

had college degrees in 2000. By comparison, only 15.4

percent of foreign-born Asians had not completed high

school, while 46.5 percent had graduated from college.

The proportions of foreign-born whites and blacks who

had not completed high school were 16.4 percent and 19.9

percent, respectively, while the proportions of those with

college degrees were 34.6 percent and 25.6 percent, respectively.

1

 A study in 1998 by Betts and Lofstrom concludes that the upper

half of the immigrant population has been and continues to be at least

as highly educated as the upper half of the native-born population.

The observed decline in the mean level of immigrants’ education relative to that of natives reflects a decline in the relative educational status of the bottom half of the immigrant population. See Julian R. Betts

and Magnus Lofstrom, “The educational attainment of Immigrants:

Trends and Implications,” NBER Working Paper Series, October 1998.

Civilian noninstitutional population, 25 years and older

by educational attainment, annual averages, 2000

College

graduates

Associate

degree

Some college,

no degree

High school

graduates,

some college

Less than

a high school

diploma

0 10 20 30 40

0 10 20 30 40

Foreign born

Native born

Percent

Percent
Monthly Labor Review May 2002 9

than their native-born counterparts. Among college graduates,

however, the native born were more likely to be labor force

participants.

Unemployment. The unemployment rate was 4.2 percent for

the foreign born, compared with 4.0 percent for the native

born in 2000. Except for 16- to 24-year-olds, the unemployment rate of the foreign born is higher than for the native born

for all age groups. (See table 4.) The gap tends to increase

with age. For example, the unemployment rate among the foreign born 25- to 34-year-olds is not much different—0.2 percentage point—than that for the native born in the same age

group; among 55- to 64-year-olds, however, the gap increases

to 1.6 percentage points. Most of the differences in rates are a

reflection of the higher unemployment rates for foreign-born

women compared with the rates of their native-born counterparts. Among the major race and ethnic groups, the unemployment rates for foreign-born and native-born whites are

the same, while among Asians, blacks, and Hispanics, the rates

for the foreign born are lower than for their native-born counterparts.

Occupation. The occupational distribution of foreign-born

workers, when compared with that of the native born offers

some insights into the economic role of the foreign born in

this country. The proportion of the foreign born employed in

professional specialty occupations (13.5 percent), which usually require a college degree, was close to that of the native

born (15.9 percent). (See table 5.) The similarity in the proportion of the foreign born and the native born with college

degrees helps explain the two groups’ similar representation

in professional specialty occupational categories. In contrast,

only 9.9 percent of the foreign born were employed as executives, administrators, and managers—occupations that also

tend to require a college education—compared with 15.3

percent for the native born. Seniority, and language problems

for non-English speakers, are two reasons why the foreign

born most likely are underrepresented in executive and

administrative occupations.

The foreign born tend to be overrepresented in low-paying occupations, which often do not require the completion

of high school. In 2000, about 19 percent of the foreign born

were employed in service occupations, and another 19 percent worked as operators, fabricators, and laborers. A little

less than 13 percent of the native born were employed in each

of these occupational categories. Poorer educational background, language difficulties, and unfamiliarity with the U.S.

job market are likely explanations for the high proportion of

foreign born in lower-paying jobs.

Earnings. Overall, foreign-born workers earned about 75.6

cents for every dollar earned by the native born in 2000—

$447 compared with $591, respectively.10 Among men, the

median weekly earnings of the foreign born was 70.6 percent

that of natives. The earnings gap was much narrower among

women—81.4 percent. (See table 6.)

At each level of education, the foreign born earned less

than the native born.11 However, the relative gap in median

weekly wage and salary earnings was narrowest among college graduates. At each level of education, the earnings gap

was narrower among women than among the men.

Among the major race and ethnic groups, median weekly

Table 5. Distribution of the foreign born and the native born by major occupations, annual averages, 2000

[In percent]

Occupation

Foreign

born

Total .............................................. 100.0 100.0 100.0 100.0 100.0 100.0

Executive, administrative, and managerial .......... 9.9 15.3 9.8 15.8 10.0 14.8

Professional specialty ...................................... 13.5 15.9 12.9 13.6 14.5 18.5

Technicians and related support ........................ 2.9 3.3 2.7 3.0 3.2 3.6

Sales occupations ........................................... 9.8 12.4 8.7 11.8 11.3 13.1

Administrative support, including clerical ............ 8.9 14.5 4.6 5.6 15.3 24.5

Service occupations ......................................... 18.9 12.7 13.4 9.5 26.9 16.4

Protective service ......................................... .8 1.9 1.1 2.9 .4 .8

Private household ......................................... 1.8 .4 .1 0 4.4 .8

Service, except private household

and protective ............................................. 16.3 10.4 12.2 6.5 22.2 14.8

Precision production, craft, and repair ................ 12.8 10.8 19.0 18.7 3.6 2.0

Operators, fabricators, and laborers ................... 18.9 12.8 22.7 18.8 13.5 6.1

Farming, forestry, and fishing ............................ 4.4 2.2 6.3 3.3 1.6 1.1

Foreign

born

Foreign

born

Native

born

Native

born

Native

born

Total Men Women
10 Monthly Labor Review May 2002

The Role of Foreign-born Workers

Total, 16 years and older ............................. $423 $447 $552 $591 5.7 7.1

Men ....................................................... 443 477 638 676 7.7 6.0

Women .................................................. 390 407 467 500 4.4 7.1

Age

16 to 24 years ............................................ $295 $314 $332 $369 6.4 11.1

25 to 34 years ............................................ 404 433 525 574 7.2 9.3

35 to 44 years ............................................ 465 499 634 652 7.3 2.8

45 to 54 years ............................................ 505 516 666 690 2.2 3.6

55 to 64 years ............................................ 481 483 607 635 .4 4.6

65 years and older ...................................... 400 381 427 457 –4.8 7.0

Education2

Less than a high school diploma ................... $314 $322 $376 $389 2.5 3.5

High school graduates, no college ................ 410 420 497 514 2.4 3.4

Some college, no degree ............................. 510 524 574 604 2.7 5.2

College graduates ...................................... 789 852 841 902 8.0 7.3

Race/ethnicity3

White, non-Hispanic .................................... $653 $670 $632 $662 2.6 4.7

Black, non-Hispanic .................................... 442 481 453 496 8.8 9.5

Asian, non-Hispanic .................................... 564 641 665 704 13.7 5.9

Hispanic origin ........................................... 347 367 484 513 5.8 6.0

1

 Consumer Price Index research series using current methods (CPI-U -RS) was used to convert 1996 current dollars to 2000 constant dollars.

2

 Educational attainment data are for persons 25 years and older.

3

 Race/ethnicity data are for 25 years and older.

Table 6. Median usual weekly earnings of foreign born and native born full-time wage and salary workers,

by selected demographic characteristics, annual averages, 1996–2000

Median weekly earnings in constant dollars1

Foreign born Native born Characteristic

1996 2000 1996 2000 Foreign born Native born

Percent change, 1996–2000

earnings of foreign-born blacks and whites at each education

level were not much different from that for their native-born

counterparts. Among Asians and Hispanics, however, the foreign born typically earned less at every educational level.

Trends, 1996–2000

The foreign born played an important role in the 1996–2000

labor-force expansion. During this period, foreign-born workers 16 years and older constituted 48.6 percent of the total

labor force increase of 6.7 million.12 (See table 7.) Nearly

two-thirds of the increase in the number of men in the labor

force, and more than a third of the increase among the women

were foreign-born workers.

Among some age groups where labor force participation

was already high, most of the labor force increase occurred

among the foreign born. For instance, over 80 percent of the

net labor force increase among 35- to 44-year-old workers

was attributable to the foreign born. In other age groups the

number of native born in the labor force declined, while the

number of foreign-born participants rose. For example, among

labor force participants aged 25 to 34, the number of native

born declined by about 2.8 million, while the number of foreign born grew by over 630,000.

The foreign born accounted for very large shares of the

overall labor force increase among Asians and Hispanics.

About 83 percent of the increase among Asians and 64.7 percent of the increase among Hispanics were foreign born. The

corresponding proportions for blacks and whites were 28.4

percent and 27.9 percent, respectively.

Census regions. In 2000, a third of the foreign-born workforce

resided in the Pacific region, two-and-a-half times the share

of all native-born workers who live in the region. The follow-
Monthly Labor Review May 2002 11

ing tabulation shows that the other regions with large shares

of the foreign-born workers were the Middle Atlantic (18.4

percent), and the South Atlantic (16.3 percent):13

Foreign Native

born born

 U.S. total ................................ 100.0 100.0

New England .................................. 4.4 5.2

Middle Atlantic .............................. 18.4 12.9

South Atlantic ................................. 16.3 18.4

East South Central ......................... 1.2 6.6

West South Central ........................ 9.8 10.9

East North Central ......................... 8.6 17.8

West North Central ........................ 2.3 8.0

Mountain ........................................ 5.5 6.5

Pacific ............................................. 33.4 13.8

Within the broad geographic regions, the foreign-born

workforce was concentrated in just a few States. Approximately 60 percent of the foreign-born

workforce in 2000 were living in just

4 States—California (30 percent),

New York (12.5 percent), Florida (9.3

percent), and Texas (8.9 percent).

At least two factors may help explain the differing concentrations of

the foreign-born workforce; labor migration occurs towards regions where

economic opportunity is perceived to

be better. Another consideration is that

immigrants generally prefer to settle

in States where large numbers of

people of their ethnic origin have

settled earlier. There are several reasons for the new arrivals to look for

ethnic enclaves. Not only can the newcomers continue to live in a familiar

culture, communicate in their mother

tongue, and share their ethnic cuisine

by joining their kin, they also can use

their ethnic group as a social network

for gaining employment. Sometimes,

such ethnic cultures can survive for

generations, albeit with modifications,

as each new generation begins to integrate new traditions with the old,

even after immigration from the old

country declines or totally ceases.14

The following tabulation shows regions that included States with relatively large numbers of foreign-born

workers also had very high labor force growth over the 1996–

2000 period:

 Regions

[Numbers in thousands]

New England ................... 142 128 90.1

Middle Atlantic ............... 456 412 90.4

South Atlantic .................. 1,511 801 51.6

East South Central .......... 294 80 27.2

West South Central ......... 695 337 48.5

East North Central .......... 779 322 41.3

West South Central ......... 133 123 92.5

Mountain ......................... 849 242 28.5

Pacific .............................. 1,834 827 45.1

The foreign-born labor force growth in the Pacific Region

accounted for almost half the total labor force growth in the

five-State region. In California, the foreign born accounted

Total, 16 years and older ......................... 6,733 3,272 49

Men ................................................... 3,062 1,925 63

Women ............................................... 3,671 1,348 37

Age

16 to 24 years ........................................ 1,461 426 29

25 to 34 years ........................................ –2,166 632 –

35 to 44 years ........................................ 1,242 1,018 82

45 to 54 years ........................................ 4,047 823 20

55 to 64 years ........................................ 1,820 278 15

65 years and older .................................. 329 68 21

Education1

Less than a high school diploma ............... –393 654 –

High school graduates, no college ............

(2) 733 –

Some college, no degree ......................... 629 210 33

College graduates .................................. 3,883 1,073 28

Race/ethnicity

White, non-Hispanic ................................ 1,940 542 28

Black, non-Hispanic ................................ 1,290 366 28

Asian, non-Hispanic ................................ 819 683 83

Hispanic ................................................ 2,566 1,661 65

1

 Educational attainment data are for persons 25 years and older.

2 Missing values.

NOTE: Dash indicates negative value.

Table 7.

[Numbers in thousands]

Change in

foreign born

as percent

of total

Age and sex

Foreign born

labor force

change

Total

labor force

change

Foreign born as percent of labor force change by selected demographic

characteristics, annual averages, 1996–2000

Change in

foreign born

as percent

Total of total Foreign

born

Labor force change,

1996–2000

Regions
12 Monthly Labor Review May 2002

The Role of Foreign-born Workers

for 46 percent of the State’s labor force growth over the period. In the South Atlantic region, the foreign-born labor-force

growth accounted for 52 percent of the region’s total labor

force growth; foreign born constituted about 78 percent of

Florida’s total growth.

Occupational trends. The occupational distribution of the

foreign born changed over the 1996–2000 period. (See table

8.) The proportion of foreign-born workers who worked in

executive, administrative, and managerial occupations declined, while it rose in professional specialty, and precision,

production, craft, and repair occupations. Among the native

born, the proportion both in executive, administrative, and

managerial occupations and professional specialty occupations rose, while it declined in most of the lower-paying occupations.

The foreign born constituted a large share of the 1996-

2000 employment increases in several major occupation

groups. (See table 9.) They accounted for half or more of the

increase in administrative support; services; precision, production, craft and repair; and operators, fabricators, and laborers. In some occupations, employment declined among

natives, while gaining among the foreign born. For example,

the number of native-born workers employed in farming, forestry and fishing occupations fell by 295,000 between 1996

and 2000 just as the number of foreign-born workers in these

occupations rose by 117,000. Within service occupations, all

of the net employment increase among private household

workers was attributable to the foreign born.

Earnings trends. Over the 1996 to

2000 period, the usual median weekly

earnings of both foreign-born and native-born wage and salary workers who

worked full time increased overall. In

constant dollars, the median for the

foreign born grew by 5.7 percent,

while that for the native born increased

by about 7 percent. The earnings of

foreign-born men grew somewhat

faster than that of their native-born

counterparts, while among women, the

reverse was true. (See table 6.)

Earnings of both groups increased

for all age categories, with the exception of foreign-born men, 55- to 64-

years-old. The earnings increases

among the foreign born were larger

among 25- to 34-year-olds and 35- to

44-year-olds, than for those in other

age groups; while among the native

born, the increase in the earnings was

most pronounced among 16- to 24-year-olds, followed by 25-

to 34-year-olds. The median weekly earnings increased both

among the foreign born and the native born at nearly all

education levels between 1996 and 2000. College graduates

experienced the largest inflation-adjusted earnings increase,

gaining 7.3 percent and 8.0 percent, respectively, for the

native born and the foreign born.

Except for Asians, earnings of the native born grew slightly

more between 1996 and 2000 than did the earnings of the

foreign born. Among Asians, however, the usual median

weekly earnings of those who were foreign-born grew by nearly

14 percent, more than twice the gain for their native-born counterparts. The fact that the percent of foreign-born Asians with

college degrees jumped by 4.4 percentage points compared

with an increase of only 1.3 percentage points for their native-born counterparts partly explains the higher earnings increase among foreign-born Asians between 1996 and 2000.

Current labor force status of the foreign born

The economic downturn that began in March 2001 had unexpectedly different effects on the foreign born than on the

native born. For instance, the labor force participation rate of

the foreign born increased by 0.4 percentage point to 67.1

percent between 2000 and 2001, while that for the native born

declined by 0.3 percentage point to 66.9 percent. The increase

in labor force participation among the foreign born stems from

the fact that foreign-born women’s participation rate increased

by 0.5 percentage point, while the rate for their male counterTable 8. Percent distribution of employed foreign born and native born

by occupation, annual averages, 1996–2000

Total ............................... 100.0 100.0 100.0 100.0

Executive, administrative,

and managerial ............................... 10.6 9.9 14.4 15.3

Professional specialty ....................... 12.7 13.5 14.4 15.9

Technicians and related support ......... 2.6 2.9 3.2 3.3

Sales occupations ............................ 9.7 9.8 12.4 12.4

Administrative support,

including clerical ............................. 9.8 8.9 15.0 14.5

Service occupations .......................... 19.5 18.9 12.9 12.7

Protective service .......................... .8 .8 1.8 1.9

Private household .......................... 1.9 1.8 .5 .4

Service, except private

household and protective ............... 16.8 16.3 10.5 10.4

Precision production, craft,

and repair....................................... 11.5 12.8 10.6 10.8

Operators, fabricators,

and laborers ................................... 19.0 18.9 13.8 12.8

Farming, forestry, and fishing ............. 4.7 4.4 2.6 2.2

Occupation

Foreign born Native born

1996 2000 1996 2000
Monthly Labor Review May 2002 13

parts was about unchanged. In contrast, among the native born the participation rates of both men and

women declined—by 0.4 and 0.2 percentage point, respectively. About

three-fourths of the overall la bor

force increase between 2000 and 2001

occurred among the foreign born.

Looking at employment, the number of employed foreign born increased by 491,000 over the year,

while the number of employed native

born declined by 897,000. Almost all

of the increase among the foreign born

occurred in services; executive, administrative, and managerial; and in

professional specialty occupations,

while employment losses among the

native born were primarily concentrated in lower-paying occupations

including operators, fabricators, and

laborers; sales; administrative support; and farming, forestry, and fishing occupations. The employment

population ratios of both groups declined over the year. The decrease was

greater among the native born (–0.8

percent) than among the foreign born

(–0.4 percent).

The behavior of the unemployment

rate for both the foreign born and the

native born, however, was consistent

with the contracting economy. The

jobless rate for both groups increased

over the year. Between 2000 and

2001, the unemployment rate of the

foreign born increased by 1.1 percentage points to 5.3 percent, while the

rate for the native born increased by

0.7 percentage point to 4.7 percent.

TH E ETHNIC AND RACIAL COMPOSITION of the U.S. population is

more diverse now than at any time since the Nation’s founding. In 2000, the foreign born constituted about 13 percent of

the population, whereas 40 years earlier, the proportion was

about half that. The foreign-born population in the United

States today has come from a multitude of countries and cultures around the world. The largest group is of Hispanic origin,

constituting nearly half of the immigrant population.

The diverse background of the foreign born makes it difficult to generalize about its role in the U.S. workforce. Today’s

foreign born not only bring racial and ethnic diversity, but

also a wide-ranging array of age, skills, and education. Levels of education are very low among some groups. In 2000,

about 55 percent of the foreign-born Hispanic population 25

years and older had not completed high school, while 9.5 percent had college degrees. In contrast, only 15.4 percent of foreign-born Asians had not completed high school, while 46.5 percent were college graduates.

The labor force participation rates for foreign-born men

were higher than for their native-born counterparts, while for

Table 9. Foreign born as a percent of employment change by occupation,

and sex, annual averages, 1996–2000

Change in

foreign born

as percent

of change

in total

Foreign

born Total

Occupation

[Numbers in thousands]

Employment change

Total ............................................................. 8,390 3,531 42.1

Executive, administrative, and managerial ....... 2,014 251 12.5

Professional specialty ................................... 2,351 589 25.1

Technicians and related support ..................... 460 146 31.7

Sales occupations ........................................ 923 350 37.9

Administrative support, including clerical ......... 355 203 57.2

Service occupations ..................................... 1,091 592 54.3

Protective service ....................................... 213 29 13.6

Private household ....................................... –16 60 –

Service, except private household

and protective ........................................... 894 503 56.3

Precision production, craft, and repair ............. 1,267 618 48.8

Operators, fabricators, and laborers ................ 105 664 632.4

Farming, forestry, and fishing......................... –178 117 –

Men .............................................................. 4,032 2,079 51.6

Executive, administrative, and managerial ....... 822 118 14.4

Professional specialty ................................... 959 328 34.2

Technicians and related support ..................... 254 90 35.4

Sales occupations ........................................ 454 175 38.5

Administrative support, including clerical ......... 88 65 73.9

Service occupations ..................................... 281 142 50.5

Protective service ....................................... 135 23 17.0

Private household ....................................... –4 1 –

Service, except private household

and protective ........................................... 149 118 79.2

Precision production, craft, and repair ............. 1,142 565 49.5

Operators, fabricators, and laborers ................ 227 502 221.1

Farming, forestry, and fishing......................... –196 95 –

Women ......................................................... 4,361 1,452 33.3

Executive, administrative, and managerial ....... 1191 133 11.2

Professional specialty ................................... 1,392 261 18.8

Technicians and related support ..................... 206 56 27.2

Sales occupations ........................................ 471 175 37.2

Administrative support, including clerical ......... 267 138 51.7

Service occupations ..................................... 812 450 55.4

Protective service ....................................... 78 6 7.7

Private household ....................................... –12 58 –

Service, except private household

and protective ........................................... 746 385 51.6

Precision production, craft, and repair ............. 126 54 42.9

Operators, fabricators, and laborers ................ –122 163 –

Farming, forestry, and fishing......................... 18 22 122.2

NOTE: Dash indicates negative value.
14 Monthly Labor Review May 2002

The Role of Foreign-born Workers

Notes

1

 The foreign-born population, although primarily comprised of legally admitted immigrants, includes refugees, temporary residents such as students

and temporary workers, and undocumented immigrants. “Natives” are persons born in the United States, Puerto Rico, or an outlying area of the United

States such as Guam or the U.S. Virgin Islands, and persons who were born in

a foreign country but who had at least one parent who was a U.S. citizen. All

others are “foreign born.”

2

 In response to the increased demand for statistical information about the

foreign born, questions on nativity, citizenship, year of entry, and parental

nativity were added to the Current Population Survey ( CPS) beginning in January

1994. Prior to 1994, the decennial census, two CPS Supplements (in April 1983

and November 1989) and, to some extent, the Immigration and Naturalization

Service (INS) that collects information about legally admitted immigrants and

nonimmigrants, were the primary data sources on the foreign born. See A.

Dianne Schmidley and J. Gregory Robinson, “How well does the Current Population Survey measure the foreign-born population in the United States?” Technical working paper No. 22, (U.S. Bureau of the Census, April 1998), p. 1.

3

 Because data for 1994 and 1995 are not strictly comparable with data for

1996 and subsequent years, for this study, only data collected since 1996 are

used. See Schmidley and Robinson, “How well does ...?”.

4

 People of Hispanic origin may be of any race including white, black, Asian

and some other race. For most BLS programs, the practice is not to exclude

persons of Hispanic origin from the white and black population groups.

5

 See Ryan T. Helwig, Randy E. Ilg, and Sandra L. Mason, “Expansion of

the Current Population Survey Sample Effective July 2001,” Employment and

Earnings (Bureau of Labor Statistics, August 2001). Data prior to 1996 are

from Public-Use Microdata Samples (PUMS) of the Census Bureau.

6

 For a more detailed discussion on the brief history of immigration and

migration, see Howard Hayghe, Abraham Mosisa, and Terence McMenamin,

“Counting Minorities: A Brief History and a Look at the Future,” Report on

the American Workforce (U.S. Department of Labor, 2001), chapter 1.

7

 See Timothy J. Hatton, and Jeffrey G. Williamson, “The Age of Mass Migration,” (Oxford University Press, New York, 1998), pp. 7–17.

8

 In 1879, the first immigration restriction law aimed at a particular nationality was passed by the U.S. Congress. The Fifteen Passenger Bill limited the

number of Chinese passengers on any ship entering the United States to fifteen. But, because it would have violated the 1868 Burlingame-Seward treaty

between the United States and China, which recognized the rights of their

respective citizens to emigrate, it was vetoed. In 1880, however, a new agreement was signed between America and China called the Angell Treaty that

allowed the United States to limit Chinese immigration. Two years later, the

Chinese Exclusion Act was signed, barring Chinese laborers from immigrating to the United States for ten years. It was renewed in 1892, again in 1902,

and, in 1904, was renewed for an indefinite length of time. The passage of this

act paved the way for further restrictive legislation affecting not only Asians,

but Europeans as well.

9

 Anti-Catholic sentiments began to emerge, followed by major movements

endorsing the limitation of immigration among certain groups. A fact-finding

commission was established and it published a report in 1911, lamenting the

gradual shift in the sources of immigration away from northwestern and toward southern and eastern Europe, perceiving it as a decline in immigrant

quality, for example, lack of financial resources, good health, or sponsorship

by relatives already in the country.

10 Usual weekly earnings data represent earnings before taxes and other deductions, and include any overtime pay, commissions, or tips usually received

(at the main job in the case of multiple jobholders). Earnings reported on a

basis other than weekly (for example, annual, monthly, hourly) are converted

to weekly. Data refer to wage and salary workers (excluding self-employed

persons who respond that their businesses were incorporated) who usually work

full time on their sole or primary job. The comparison of earnings of the foreign born and native born is difficult, given that median weekly earnings data

here exclude self-employed workers. Several researchers of immigration observe that a larger proportion of the foreign born are self-employed compared

with the native born. Thus, caution should be exercised in interpreting the

outcomes due to excluding self-employed workers from median weekly earnings.

11

 This section compares median weekly earnings for persons with different

levels of education. No attempts were made to correct other differences between different educational records such as quality of education, type of degrees earned, and other unobservable differences. Thus, caution should be exercised in interpreting outcomes as being entirely due to differences in education.

12 The share of the foreign born in the labor force change may be even higher.

For example, estimates for the CPS show 28.8 million foreign born in 2000,

while data from the Census 2000 supplementary survey universe show 30.5

million. Moreover, based on Demographic Analysis (DA) by the U.S. Bureau

of the Census, the Census Level Undercoverage rate for the foreign-born population ranges from 3.3 percent to 6.7 percent in 2000. The undercoverage rate

differed by migrant status: 35 percent for temporary migrants, 12.5 percent for

unauthorized migrants, and 2 percent for legal migrants. See Gregory J.

Robinson, ESCAP II: Demographic Analysis Results, P.A.–12, Report No. 1

(U.S. Bureau of the Census, October 13, 2001).

13 The following is a listing of states for each region: New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont);

Middle Atlantic (New Jersey, New York, Pennsylvania); South Atlantic (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South

Carolina, Virginia, West Virginia); East South Central (Alabama, Kentucky,

Mississippi, Tennessee); West South Central (Arkansas, Louisiana, Oklahoma,

Texas); East North Central (Illinois, Indiana, Michigan, Ohio, Wisconsin); West

North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota,

South Dakota); Mountain (Arizona, Colorado, Idaho, Montana, Nevada, New

Mexico, Utah, Wyoming); Pacific (Alaska, California, Hawaii, Oregon, Washington).

14

 A long literature exists in the disciplines of economics, sociology, and

urban planning that speaks to the issue of “ethnic enclaves.” Some scholars

believe such groupings to be detrimental to the newcomers, whom it can effectively prevent from assimilating into the larger society; while others believe

the enclave can provide opportunities to newcomers that might not otherwise

accrue to them in their new home.

the women, the opposite was true. Unemployment rates for

the foreign born are not much different from those for the

native born. Also, while the employed foreign born tend to be

more concentrated in lower-skilled, lower-paying occupations

than the native born, about the same proportions of each group

can be found working in professional specialty and precision

production, craft and repair occupations, both of which are

typically higher-paying job categories.

With regard to weekly earnings, the foreign born generally

earn less than their native-born counterparts, except among

college graduates. The earnings of foreign-born college graduates are very similar to that of their native-born counterparts.

Between 1996 and 2000, when employment in the United

States was expanding rapidly and unemployment was falling,

the foreign born constituted a disproportionate share of the

increase in the labor force—nearly half. Indeed, among some

age groups, occupations, and geographic regions, the share

of the expansion contributed by the foreign born was extremely

large. As a result, the foreign born have come to play an increasingly important role in the U.S. economy.