The Employment Situation of Immigrants and the U.S.-Born in the Fourth Quarter of 2021

Unemployment and labor force participation among the foreign-born and U.S.-born

By Steven A. Camarota and Karen Zeigler on March 14, 2022

An analysis by the Center for Immigration Studies of the Bureau of Labor Statistics’ Current Population Survey (CPS) shows that while the official unemployment rate for both the U.S.-born and immigrants has fallen significantly, it remains higher than before Covid. But perhaps most important, the labor force participation rate — the share of working-age (16-64) people holding a job or looking for one — remains near historic lows. Those not in the labor force are not included in the official unemployment rate. The economic and social disruptions caused by Covid-19 exacerbated what has been a long-term decline in the labor force participation rate going back decades. In the fourth quarter of 2021, only 73.2 percent of the working-age (16-64) U.S.-born were in the labor force compared to 77.3 percent in 2000. If their labor force participation had remained the same as it was in 2000, then nearly seven million more U.S.-born Americans would have been in the labor force in 2021.

The decline in labor force participation is especially pronounced among the U.S.-born without a bachelor’s degree. Although this report provides figures for every year from 2000 to 2021 for many different sub-populations, we focus on the peak years of economic expansion (2000, 2007, and 2019) as well 2021 because it is the most recent fourth-quarter data available. Immigrants (legal and illegal together) in the CPS are often referred to as the "foreign-born" and include all persons who were not U.S. citizens at birth — primarily naturalized citizens, lawful permanent residents, long-term temporary visitors (e.g. guestworkers), and illegal immigrants.

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Among the findings:

  • The unemployment rate for the U.S.-born (ages 16-plus) was 4.0 percent in the fourth quarter, higher than the 3.5 percent in the fourth quarter of 2019 before Covid-19. Among immigrants (legal and illegal together), the rate was 3.9 percent, higher than the 2.8 percent in the fourth quarter of 2019. (Tables 7 and 8)
  • The total number unemployed in the fourth quarter of 2021 was six million — five million U.S.-born and one million immigrants. (Tables 1 and 7)
  • In addition to the six million unemployed, 54.2 million working-age (16-64) U.S. residents were not in the labor force — 45.3 million U.S.-born and 8.9 million immigrants. (Tables 1 and 7)
  • The total number of (16-64) immigrants and U.S.-born not working — unemployed or not in the labor force — in the fourth quarter of 2021 was 60.6 million.1 Of this number, 69 percent are adults without a bachelor’s degree.
  • There would seem to be an enormous supply of potential workers for employers to draw on if properly paid and treated. This is especially true among the less-educated.
  • The Covid-19 shutdown has exacerbated the long-term decline in the labor force participation rate — the share of working-age (16-64) people working or looking for work. Those not in the labor force are not counted as unemployed.
  • Although it has improved since the low in 2020, the share of the U.S.-born (16-64) in the labor force was only 73.2 percent in the fourth quarter of 2021, down from 74.1 percent in 2019 before Covid-19 hit, and 75.2 percent in 2007 before the Great Recession, and 77.3 percent at the peak in 2000. (Tables 1, 7, 8, 9, and 10)
  • If the same share of working-age U.S.-born (16-64) were in the labor force in 2021 as in 2000, then 6.9 million more people would be in the labor force. Since 2000, legal and illegal immigration has added 8.8 million workers. (Calculation based on Tables 7 and 10)
  • Focusing only on U.S.-born adults (18-64) without a college degree shows an even more pronounced decline in labor force participation. In the fourth quarter of 2021, only 70.2 percent were in the labor force, compared to 71.4 percent in 2019, 74.3 percent in 2007, and 76.4 percent in 2000. (Tables 5, 7, 8, 9, and 10)
  • Among U.S.-born Black American adults (18-64) without a bachelor’s degree, only 66.3 percent were in the labor force in the fourth quarter of 2021, compared to 71 percent of U.S.-born whites and 72 percent of U.S.-born Hispanics. (Table 7).

Data and Methods

This report uses the public-use files of the Current Population Survey (CPS) from the fourth quarter (October, November, and December) of each year 2000 to 2021 to examine the employment situation in the United States, with particular attention paid to differences between immigrants and the U.S.-born. The raw data used in this analysis comes directly from the Census Bureau’s website, which collects the data for the Bureau of Labor Statistics (BLS). 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.

Key Concepts and Terms. The labor force includes all workers, plus those who are not working but have actively looked for work in the four weeks prior to the survey. There are three measures of labor force attachment used in this analysis. First, we report statistics using the standard unemployment rate, referred to by the BLS as the U-3 rate. It is calculated by dividing the number of people actively looking for work in the last four weeks by the number in the labor force (working or looking). Because of the way it is calculated, those not in the labor force are not included in the official unemployment rate. Second, there is the labor force participation rate, which is the share of people in the labor force, often confined to a particular age group such as 16 to 64. It is calculated by taking the share working or looking for work and dividing it by all persons in the age group of interest. Third, there is the share of the population that is employed, which is referred to as the employment rate. It reflects the share of the population that is working divided by all persons (working and not working) in the age group of interest.

Definition of Immigrant. The foreign-born in the CPS includes 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.

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". 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. Also, the limited number of statistics on the foreign-born published in the BLS monthly "Employment Situation" (Table A-7) reports are, like those reported here, not seasonally adjusted. Finally, comparing the fourth quarter of each year controls for seasonal differences and provides a larger sample and more statistically robust estimates. This is especially important when looking at smaller subpopulations.

Potential Problems with the Data. The Bureau of Labor Statistics (BLS) reports potential problems with the CPS since March 2020 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 2020 through December 2021 if these individuals were counted as unemployed. Second, the response rates for March 2020 through December 2021 were significantly lower than prior to Covid-19, though rates have improved since hitting a low in June 2020. These lower rates increase the sampling error of the survey. However, in June 2020, when the problem was most pronounced, BLS stated that “Although the response rate was adversely affected by pandemic-related issues, BLS was still able to obtain estimates that met our standards for accuracy and reliability.”

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 Note

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 341,766 in Q4 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 who are unemployed and out of the labor force the total would be 60.2 million.