Low-Skilled Immigration
and the U.S. Workforce
Pia Orrenius, Ph.D.
Federal Reserve Bank of Dallas
Washington, DC
February 1, 2013
Disclaimer: The views expressed herein are
those of the presenter; they do not necessarily
reflect the views of the Federal Reserve Bank of
Dallas or the Federal Reserve System.
Road map
Trends in immigration


Numbers, education, countries of origin
Legal status
Low-skilled immigrants at work


A changing native labor force
Occupations and earnings
Effect on natives

Economic benefits and costs
Trends in Immigration
WHO COMES?
Foreign-born population
40 million in 2011
Millions
45
40
35
30
25
Number
20
15
10
5
0
1850
1870
1890
1910
1930
1950
1970
1990
Source: Census (through 2000); American Community Survey (2011)
2011
Second Great Migration takes us near
historic peaks of immigration
Millions
45
Percent
16
40
14
Share of
Population
35
12
30
10
25
8
Number
20
6
15
10
4
5
2
0
0
1850
1870
1890
1910
1930
1950
1970
1990
Source: Census (through 2000); American Community Survey (2011)
2011
Millions
Rising influx of foreign-born,
low-skilled workers
7
6
Foreign born share of
low-skilled labor force
Percent
60
50
5
Foreign-born, low-skilled workers
40
4
30
3
20
2
1
0
1960
1970
1980
1990
2000
2011
NOTE: Number of foreign-born workers with less than a high school education aged 25 and older.
Source: Census; 2011 American Community Survey
10
0
Today, nearly one-third of the foreign
born lack a high school degree
Percent
35
Education Distribution by Nativity
30
Native
25
Foreign born
20
15
10
5
0
Less than high
school graduate
High school
graduate or
equivalent
Some college or
associate's degree
Source: 2011 American Community Survey
Bachelor's degree
Graduate or
professional degree
Low-skilled dominate migration
from Mexico, Central America
India
Taiwan
Iran
Japan
Former USSR
United Kingdom
Korea
Canada
China/Hong Kong
Philippines
Germany
Brazil
Poland
U.S. natives
Colombia
Peru
All immigrants
Italy
Vietnam
Jamaica
Cuba
Haiti
Ecudador
Dominican Republic
Honduras
El Salvador
Mexico
Guatemala
Bachelor's degree and higher
High school graduate and
some college
Less than high school
0
10
20
30
40
50
60
70
80
Note: Composition of educational attainment among immigrants by country of origin.
Source: 2011 American Community Survey
90
100
Much low-skilled immigration
is (or was) unauthorized
Millions
13
Unauthorized Immigrant Population
12
11
DHS*
Pew
10
9
8
7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Note: *DHS estimates not available for 2001-2004.
Source: Department of Homeland Security; Pew Hispanic Center
Unauthorized population as large as
permanent resident population
Unauthorized
immigrants
Temporary
migrants
Source: Pew Hispanic Center
Naturalized
citizens
Permanent
residents
U.S. Labor Demand
LOW-SKILLED
IMMIGRANTS AT WORK
Aging underway: seniors will be
20% of U.S. population by 2030
Percent
25
20
15
10
5
0
1950
1970
1990
2010
2030
2050
Source: Census, various years; 2009 Census Bureau population projections 2010 - 2050
U.S. labor force participation
rate in decline since 2000
Percent
68
66
64
62
60
58
56
Source: Bureau of Labor Statistics
U.S.-born workers more educated over time
(Change in labor force by education and nativity)
3.60
Bachelor's Degree or Higher
11.07
1.60
Some College or Associate's degree
High School Graduate
4.07
Foreign-born
Native-born
2.63
-2.31
.
Less than High School
2.01
-2.80
-5
Note: Change from 1996 to 2011
Source: Bureau of Labor Statistics
0
5
10
15
Millions
Immigrant workers overrepresented at
extremes of the education distribution
Percent
60
50
40
30
20
Foreign born
share of labor
force
10
0
Less than high
High school
school graduate graduate, some
college
Bachelor's
degree
Source: 2011 American Community Survey
Master's degree
Professional
degree
Doctoral degree
Immigrants go where the jobs are
0.2
Foreign born population growth
NV
0.15
UT
0.1
WY
0.05
0
-0.05
-0.1
-0.15
-0.2
AZ
ID
AK
CO
NM
SD
TX
MT
FL
NE
ND
OK
MN
GA
WA
AR NC
KS MS
VA
IA
LA
WI
WV DEKY AL SC
TN NH
PA MO VT MD CA
HI
IL IN MA
ME
NJ NY
OH
CT
MI
RI
-0.15
-0.1
-0.05
0
0.05
OR
0.1
0.15
0.2
0.25
State employment growth
Note: Coordinates indicate deviation from average foreign born population log growth (vertical
axis) and from average state nonfarm payroll log growth (horizontal axis) from 1990 to 2009.
Foreign born worker share by occupation
(low-skilled)
Farm workers
Hairdressers and cosmetologists
Gardeners and groundskeepers
Misc food prep workers
Housekeepers, maids, butlers
Construction laborers
Cooks, variously defined
Child care workers
Janitors
Waiters and waitresses
Timber, logging, and forestry…
Motor vehicle operators
Nursing aides, orderlies, and…
Foreign-born as a percentage of labor
force with less than high school
education
Mechanics
Kitchen workers
Miners
Pest control occupations
0
20
40
50.3
60
80
100
Percent
Note: Percent of workers age 25 and over with less than high school education who are foreign born for
selected occupations.
Source: 2011 American Community Survey
Low-skilled immigrants earn less
Dollars Per Hour
40
$36.44
35
$32.50
Native
Foreign-Born
30
$25.50 $25.00
25
20
15
$17.42
$15.00
$12.44
$10.80
10
5
0
Less than High School
High School, Some
college
College
Graduate Degree
Note: Median hourly wages among full-year workers by educational attainment and nativity.
Source: 2011 American Community Survey
Effect on Natives
BENEFITS AND COSTS
OF MIGRATION
“Immigration Surplus:” The rise in
natives’ incomes from immigration
Labor force grows, output increases

Immigrants account for nearly one-half labor force
growth since 1996
Prices fall, return to land and capital rise.
Efficiency gains




Complement native workers at high, low ends of
skill distribution
Fill jobs natives shun
Move to where jobs are
High-skilled: Boost innovation, entrepreneurship
“Immigration Surplus:” The rise in
natives’ incomes from immigration
Drawbacks


Fiscal impact of low-skilled immigration
Labor market effects
Winners and losers
Concluding thoughts
Low-skilled immigration has been
massive, with high shares unauthorized

Outcome of robust labor demand, proximity to
Mexico
Economic benefits widespread but…

Created winners and losers in labor market

Fiscal impact is negative
Share of foreign-born workers by state
NOTE: Data in AK, ME, MT, ND, SD, VT, WV, WY are from the 2009 American Community Survey, while
data in the remaining states are from the 2011 American Community Survey.