Steven A. Camarota is the director of research and Karen Zeigler is a demographer at the Center.
The unemployment rate for immigrants and the U.S.-born is 3.2 percent and 3.4 percent, respectively; however, these figures obscure the long-term decline in the labor force participation rate of the U.S.-born, particularly those without a bachelor’s degree. The unemployed only includes those who have actively looked for a job in the prior four weeks and does not include those entirely out of the labor force — neither working nor looking for work. The share of the working-age U.S.-born in the labor force remains below pre-pandemic levels and has been declining for decades. If the labor force participation rate for the U.S.-born in the fourth quarter of 2022 was what it had been in the fourth quarter of 2000, then 6.4 million more Americans would be in the labor force.
This analysis by the Center for Immigration Studies is based on the Current Population Survey (CPS), collected by the Census Bureau for the Bureau of Labor Statistics. We focus on the peak years of economic expansion (2000, 2006, and 2019) as well as 2022 because it is the most recent quarterly 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.
Among the findings:
- There were 1.9 million fewer U.S.-born Americans working in the fourth quarter of 2022 than in the same quarter of 2019 before Covid. In contrast, the number of immigrants (legal and illegal) working was up two million over the same time period. The rapid growth in immigrant workers is well above the pre-pandemic trend line. (Figure 2, Table 2)
- There were a total of 5.5 million 16-plus unemployed immigrants and U.S.-born Americans in the fourth quarter of 2022 and the overall unemployment rate was just 3.3 percent. (Tables 2 and 7)
- The unemployed does not include those entirely out of the labor force — neither working nor looking for work. There were 54 million working-age (16-64) immigrants and U.S.-born Americans not in the labor force, creating a total of 59.5 million people not working, some share of whom could potentially work. (Tables 1 and 7)1
- There has been a decades-long decline in the labor force participation rate of the U.S.-born of working-age (16 to 64), from 77.3 percent in 2000 to 73.5 percent in the fourth quarter of 2022 (Figure 1 and Table 1)
- If the labor force participation rate for the working-age U.S.-born in the fourth quarter of 2022 was what it had been in the fourth quarter of 2000, then 6.4 million more people would be in the labor force (Figure 4)
- The long-term decline in the labor force participation rate is especially pronounced among the less-educated. The rate for U.S.-born adults ages 18 to 64 without a bachelor’s degree was 70.3 percent in the fourth quarter of 2022, down from 71.4 percent in 2019, before Covid; 74.8 percent in 2006, before the Great Recession; and 76.4 percent at the peak of the expansion in 2000 (Figure 5 and Table 5)
- Men who are of “prime working age” (25 to 54) traditionally are the most likely to work. But of prime-age U.S.-born men without a bachelor’s degree, only 83.7 percent were in the labor force in the fourth quarter of 2022, compared to 85.1 percent in 2019, 88.1 percent in 2006, and 89.3 percent in 2000 (Figure 7 and Tables 7-10)
- Though the decline is not as pronounced, the labor force participation of prime-age immigrant men without a bachelor’s degree has also declined some. After peaking at 93.4 percent in 2007, it was 90.7 percent in the fourth quarter of 2022 (Figure 7 and Table 7)
- Women traditionally have lower rates of work than men, often due to child-care responsibilities, though the falloff in fertility means fewer women have children. The labor force participation rate of less-educated U.S.-born women of prime age has declined from 76.1 percent in 2000 to 72 percent in the fourth quarter of 2022 (Figure 8 and Tables 7 and 10)2
- At 63.1 percent in the fourth quarter of 2022, the labor force participation rate for less-educated, prime-age immigrant women is a good deal lower than their U.S.-born counterparts, but it has not declined in the way that it has for U.S.-born women (Figure 8 and 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 from 2000 to 2022 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, so it does not include those in prisons and nursing homes.
Key Concepts and Terms. The labor force includes all workers, plus those who are not working but report in the CPS that they 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. Sometimes the BLS reports labor force participation for all persons 16 and older, including those of retirement age. But such statistics confound the impact of population aging with the phenomenon of declining participation in the labor force among the working-age, which is our focus here. 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 term “immigrant” has a specific meaning in U.S. immigration law, which is all those inspected and admitted as lawful permanent residents. In this analysis, we use the term “immigrant” in the non-technical sense of the word to mean all those who were not U.S.-citizens at birth. Typically, the government refers to these individuals in surveys such as the CPS as the “foreign-born”, which 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. While it may surprise some, the BLS is clear that illegal immigrants are included in the survey, though some fraction are missed by the CPS.
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.
Seasonal Adjustment. 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 same quarter each year, as we do here, essentially controls for that variable.
Potential Problems with the Data Due to Covid. 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.
Potential Issue with Sample Weights. One potential issue with the data not discussed by the Census Bureau or BLS is that the rapid increase in the immigrant population may explain the decline in the total U.S.-born due to the way the data is weighted. Adding up the employed, unemployed, and those not in the labor force in Table 1 show a U.S.-born working-age (16-64) population that was 1.6 million smaller at the end of 2022 than at the end of 2019. This seems implausible, as most Covid deaths were in the older age cohorts. As we have discussed in prior reports, this decline likely reflects the way the survey is weighted rather than an actual decline in this population. Like virtually all modern surveys, the survey is controlled to a total target population each month that is basically pre-determined — reflecting what the Census Bureau believes is the actual size and composition of the population across demographic characteristics carried forward each month. Each January, the weights are readjusted by race, sex, age, and other factors as new information about births, deaths, and net international migration becomes available.
Nativity is not one of the characteristics used to weight the data. This means that the identification of the foreign-born reflects what survey respondents tell interviewers, much like employment status. Given that respondents can only be either U.S.- or foreign-born and the survey is controlled to a target population, an increase in the foreign-born must make the U.S.-born population smaller. As a result, it is not really possible to look at the relative growth in the two populations within the same calendar year, though this should not be a problem when making year-over-year comparisons as we do in this analysis. However, this is only true if the bureau is correctly weighting the data. If, as we have argued elsewhere, it is understating the arrival of immigrants, then the overall population totals will be different. This means as the share of people reporting they are foreign-born increases, as it has dramatically in the last two years, the U.S.-born population will decline in the survey.
If we are correct that the weights are off due to an underestimation of the net migration of the foreign-born, then the actual U.S.-born and foreign-born populations are larger than reported here. How much larger is difficult to say. But if the weights were corrected, it seems likely that it would show both more natives and immigrants working, but also more not in the labor market as well. Perhaps most important, it would not show a decline in the working-age U.S.-born population between 2000 and 2022. Such a decline will occur in the coming years given the drop in fertility starting in 2008 and the large number of Baby Boomers reaching age 65 each year.
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 relatively modest number over age 64, which was 301,000 in Q4 2022. The figures for those outside of the labor force include only those working-age, 16 to 64. If we focus only on those 16 to 64 who are unemployed and out of the labor force the total not working would be 59.2 million.
2 One might think that the decline in the labor force participation of women was due to more staying home to care for young children, but this is not the case. Among the U.S.-born in the fourth quarter of 2000, 79 percent of prime-age women without a bachelor’s degree and no children under age 13 were in the labor force compared to 74 percent in 2022. Even before Covid in 2019, it was 75 percent. For prime-age, less-educated women with children, it declined from 73 percent in 2000 to 70 percent in 2022. Also, it must be remembered that the share of less-educated, prime-age women who even live with a child has declined as fertility has fallen. In 2000, 46 percent of these women lived with a child 12 or under; by 2022, it was 42 percent. Therefore, it is extremely unlikely that changes in child-rearing practices account for the decline in labor force participation among U.S.-born women.