The Employment Situation of Immigrants and Natives in January 2021

Unemployment and Labor Force Participation Among the Foreign-Born and Native Born

By Steven A. Camarota, Jason Richwine, and Karen Zeigler on March 1, 2021

An analysis by the Center for Immigration Studies of Bureau of Labor Statistics data for January 2021 shows that the official unemployment rate (share actively looking for work) of native-born Americans remains much higher than before Covid-19 hit. The labor force participation rate, which is the share of the working-age (16-64) with a job or looking for one, remains dramatically lower than before Covid-19. The number of working-age natives and immigrants out of the labor force has actually increased in recent months. Less-educated immigrants and natives continue to have much higher unemployment and lower labor force participation than those with at least a college degree. (Immigrants (legal and illegal together) are often referred to as the "foreign-born".)

Download the figures and tables here.

Among the findings:

  • The unemployment rate for native-born Americans (ages 16-plus) was 6.5 percent in January, substantially above the 4.0 percent in January 2020 before Covid-19. Among immigrants (legal and illegal together), the rate was 8.1 percent, more than twice what it was in January 2020 before Covid-19. (Figure 1, Table 1C)
  • The number unemployed in January stood at 8.6 million for natives and 2.2 million for immigrants, both dramatically higher than in January 2020. (Table 1B)
  • In addition to the unemployed, 47.2 million working-age (16-64) native-born Americans and 9.4 million immigrants were out of the labor force in January — neither working nor looking for work. The share of both groups in the labor force has improved little or not at all in recent months. This fact, coupled with population growth for both groups has caused the number not in the labor force to increase since the summer. (Tables 2B and 2C)
  • The total number of natives and immigrants not working — unemployed or out of the labor force — was 67.5 million in January 2021, 7.8 million more than in January 2020.1 (Tables 1B and 2B)
  • Excluding people under age 25, there were 47.6 million immigrants and natives ages 25 to 64 not working in January.2 (Tables 1B and 2B)
  • We estimate that the unemployment rate for illegal immigrants (sometimes referred to as "illegal aliens" or the "undocumented") was 8.7 percent, and that it was 8 percent for legal immigrants in January. However, our estimates by legal status are approximations only. (Table 4C)

Among the less-educated:

  • The unemployment rate for native-born Americans (ages 25-plus) without a bachelor's degree was 7.2 percent in January, compared to 3.7 percent for those with at least a bachelor's. Among immigrants (ages 25-plus), 9 percent without a bachelor's degree were unemployed, compared to 6 percent with at least a bachelor's. (Table 1C)
  • The unemployment rate (immigrant and native) in many jobs typically performed by the less-educated has improved but remains high. (Table 3G)
    • 17.9 percent for construction laborers
    • 16.5 percent for food preparers and servers
    • 16.7 percent for landscapers, trimmers, groundskeepers
    • 12 percent for maids and housekeepers
    • 12 percent for freight, stock, and material movers
    • 9.5 percent for cashiers
    • 8.6 percent for healthcare aides and nursing assistants.
  • The Covid-19 shutdown has exacerbated the long-term decline in the labor force participation rate (share working or looking for work) of the less-educated. In January 2021, only 65 percent of working-age (16-64) natives without a bachelor's degree were in the labor force, down from 71 percent in January 2007 and 74 percent in January 2000. (Figure 2)
  • Focusing on only men who are of prime working-age (25 to 54) still shows a long-term decline in labor force participation. The share of native-born men ages 25 to 54 without a bachelor's degree in the labor force was 82 percent in January 2021, compared to 88 percent in January 2007 and 89 percent in January 2000. (Figure 3)

Data and Methods

This report uses the public Current Population Survey (CPS) to examine the employment situation in the United States as of January 2021, with particular attention paid to differences between immigrants and natives. Based on a monthly survey of 60,000 households, the CPS is the nation's primary source for the unemployment rate and other labor force statistics. The sample is weighted to reflect the actual size and demographic makeup of the civilian non-institutionalized population. The raw data used in this analysis comes directly from the Census Bureau, which collects the data for the Bureau of Labor Statistics (BLS).3

Key Concepts and Terms. The labor force includes all workers, plus non-workers who have actively looked for work in the four weeks prior to the survey. The standard unemployment rate, referred to by the BLS as the U-3 rate, is calculated by dividing the number actively looking for work by the number in the labor force. The labor force participation rate is simply the share of people in the labor force.

Definition of Immigrant. The foreign-born in the CPS are all persons who were not U.S. citizens at birth. They include naturalized citizens, permanent residents (green card holders), temporary visitors, guestworkers, and illegal aliens. We use the term "immigrant" to encompass all of these foreign-born individuals. In Tables 1A, 1B, 1C, 2A, 2B, and 2C, we report figures separately for non-citizens and naturalized citizens. Tables 4A, 4B, 4C, 5A, 5B, and 5C report figures for legal immigrants and illegal immigrants separately.

Identifying Illegal Immigrants. Prior research indicates that most illegal immigrants are included in Census data. To determine which respondents are most likely to be illegal aliens, CIS first excludes immigrant respondents who are almost certainly not illegal aliens — for example, spouses of native-born citizens; veterans; people who have government jobs; Cubans (because of special rules for that country); immigrants who arrived before 1980 (because the 1986 amnesty should have already covered them); people in certain occupations requiring licensing, screening, or a government background check (e.g., doctors, pharmacists, and law enforcement); and people likely to be on student visas.

The remaining candidates are weighted to replicate known characteristics of the illegal population (population size, age, gender, region or country of origin, state of residence, and length of residence in the United States). CIS has previously used the Department of Homeland Security (DHS) as the source of those known characteristics; however, DHS data were last published in 2015. For more recent data, we turn to 2018 estimates from the Center for Migration Studies (CMS), including its estimates of educational attainment.4 The resulting illegal population, which consists of a weighted set of CPS respondents, is designed to match CMS on the characteristics listed above. However, we do not adjust the number of illegal immigrants for undercount in the CPS.5 Estimates for legal immigrants are calculated simply by subtracting estimated counts of illegal immigrants from the total immigrant population.

All of our findings that separate immigrants by legal status should be considered rough approximations only. Because we do not have information about the illegal immigrant population in 2021, we are forced to take the known characteristics of illegal aliens from 2018 and apply them to the new labor market data in 2021. The primary weakness of this approach is that it assumes the illegal immigrant population still has the same demographic profile (population size, age, gender, etc.) as it did in 2018.

Matching Published BLS Tables. In this report, all statistics covering the entire population, such as the unemployment rate, match those published by the BLS. However, the counts and percentages for sub-populations will in some cases be slightly different. The reason is that the Census Bureau adds "perturbations" to the public-use microdata to protect respondent confidentiality. Fortunately, the Census Bureau states that any differences between published figures and those calculated from the public-use data will be so small that they "fall well within the sampling variability associated with CPS estimates".6 In other words, there should be no meaningful difference between statistics calculated from the pubic-use data and those published by the BLS.

Finally, the figures in this report are not seasonally adjusted. Unadjusted figures are conceptually simpler and easier for other researchers to replicate.7 Also, the limited number of statistics on the foreign-born published in the BLS monthly "Employment Situation" reports are not seasonally adjusted.

Potential Problems with the Data. The BLS reports a potential problem with the CPS since March because of the Covid-19 pandemic. First, interviewers who administered the survey miscoded some respondents as employed when they were on furlough, temporary layoff, or similar situations. They should have been considered temporarily laid-off and coded as unemployed. The number unemployed and the unemployment rate would be higher in March through January if these individuals were counted as unemployed. For January, BLS states that if these misclassified workers were included in the unemployed population then the unemployment rate would have been 0.6 percentage points higher. But they also state that, "this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error."8 Second, the response rates for March 2020 through January 2021 were significantly lower than prior to Covid-19, though rates have improved since hitting a low in June. These lower rates increase the sampling error of the survey. The Bureau stated in January 2021 that, "While the rate was lower than the average of 83 percent for the 12 months ending in February 2020, it was considerably higher than the low of 65 percent in June 2020."9 Neither the Census Bureau, which collects the data, nor the BLS has altered the data in response to these issues. Our analysis takes the raw CPS data as provided; and our results match published non-seasonally adjusted figures, with the caveats about perturbations in public use data discussed above.

End Notes

1 Following the example of the Bureau of Labor Statistics, the unemployment figures in this analysis include all persons who are actively looking for work, including a modest number over age 64, which was 564,000 in January 2021. The figures for those outside of the labor force include only those 16 to 64. If we focus only on those 16 to 64 unemployed and out of the labor force the figure would be 66.9 million.

2 As indicated in end note 1, 564,000 people over age 64 in January 2021 were unemployed, which are included in the 47.6 million figure. Excluding the elderly actively looking for work and focusing only on the those 25 to 64 unemployed or out of the labor force would make the total 47.0 million.

3 "Basic Monthly CPS", U.S. Census Bureau, undated.

4 "State-Level Unauthorized Population and Eligible-to-Naturalize Estimates", Center for Migration Studies, undated.

5 In 2018, CMS estimated a total illegal immigrant population of 10.6 million, which includes an undercount adjustment for those missed in Census Bureau data. Our analysis of the CPS totals to 9.8 million illegal immigrants, reflecting a 7.5 percent undercount.

6 "Monthly Current Population Survey Public Use Microdata Files", U.S. Census Bureau, undated.

7 "Table A-7. Employment status of the civilian population by nativity and sex, not seasonally adjusted", U.S. Bureau of Labor Statistics, January 8, 2021.

8 See the text box in the January 2021 press release titled, "Coronavirus (COVID-19) Impact on January 2021 Establishment and Household Survey Data" toward the bottom of the release.

9 See posting at the BLS website entitled, "Impact of the coronavirus (COVID-19) pandemic on The Employment Situation for January 2021.