Understanding the United States’ changing labor force can be a key part of understanding larger trends in the overall economy. Each May, the Bureau of Labor Statistics (BLS) publishes details on the demographics, labor force participation, occupations, and earnings of the foreign-born population of the United States. Along with information gathered each year by the American Community Survey (ACS), the BLS data provide an objective and useful look at the contributions that foreign-born individuals make to the United States economy. Outlined in this blog post are key characteristics of the foreign-born population and how they compare to the native-born population.
Highlights from the most recent BLS and ACS data include:
- There are 27 million foreign-born workers in the United States, making up 17% of the total workforce.
- Overall, foreign-born workers earn 83 percent as much as native-born workers; however, foreign-born workers with at least a bachelor’s degree earn more than native-born workers with the same level of education.
- The unemployment rate for the foreign-born population age 25 and older was 3.8 percent in 2017, compared with 3.6 percent for the native-born population.
- The foreign-born population has a higher rate of labor force participation than does the native-born population.
- Education levels of the foreign-born population are similar to those of the native-born.
- Foreign-born individuals from several regions earn bachelor’s degrees at higher rates than the native-born population.
How Do We Define “Foreign-Born”?
According to BLS, the foreign-born population is defined as “persons residing in the United States who were not U.S. citizens at birth.” That includes “legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants.” Conversely, BLS defines the native-born population as “persons born in the United States or one of its outlying areas such as Puerto Rico or Guam or who were born abroad of at least one parent who was a U.S. citizen.”
In 2016, the United States population of 323 million included 44 million foreign-born individuals, or roughly 14 percent. That percentage has varied throughout history. In 1970, for example, foreign-born individuals comprised only 5 percent of the total population. At other points in history, such as the late 1800s, the foreign-born population was much larger as a share of the total population.
How Much Do Foreign-Born Workers Earn?
Foreign-born individuals typically earn less than native-born individuals—on average, 83 percent of their native-born counterparts. That disparity generally holds true across age, gender, and education level, with one significant exception. Foreign-born individuals with a bachelor’s degree or more had median weekly earnings of $1,340 per week in 2017, about $70 per week higher than the median for the native-born population with that level of education.
Employment Rates of Foreign-Born Workers
Since 2006, the unemployment rate for foreign-born individuals has tended to be slightly higher than the unemployment rate for native-born individuals. However, in the years since the Great Recession, that gap has fallen from a peak of 1.5 percentage points in 2009 to 0.2 percentage points in 2017. Last year, the foreign-born population age 25 and older had an average unemployment rate of 3.8 percent; slightly above the rate for the native-born population of 3.6 percent.
The foreign-born population has a higher rate of labor force participation. According to BLS, 67.2 percent of the foreign-born population age 25 and older participates in the labor force, while the native-born ratio is 63.5 percent. That difference of 3.7 percentage points means that a significantly larger share of the foreign-born population is either employed or unemployed and looking for work.
Although the foreign-born population has a higher overall labor force participation rate, that rate varies among age groups. For example, the native-born population age 25 to 34 had a labor force participation rate of 83.5 percent in 2017, which was 8.1 percentage points higher than the corresponding foreign-born population. However, for the 55 to 64 year old age group, foreign-born individuals participated in the labor force at a rate that was 4.7 percentage points higher.
Education Level of Foreign-Born Workers
The foreign-born and native-born populations have comparable levels of educational attainment. According to the ACS, in 2016, 31.6 percent of the native-born population age 25 and older had a bachelor’s degree or more. For the foreign-born population age 25 and older, the percentage with a bachelor’s degree or more was 30.0 percent.
However, foreign-born individuals from several regions of the world have considerably higher levels of educational attainment than the foreign-born population as a whole. In fact, individuals born in four regions outrank the native-born population on that metric. Individuals now living in the United States but born in East Asia; the Middle East and North Africa; Europe; and Sub-Saharan Africa are more likely to have bachelor’s degrees than the native-born population of the United States.
English Proficiency Among Foreign-born Individuals
The ACS collects data each year about the proficiency in English of individuals age 5 or older. Data from the survey showed that in 2016, 16 percent of the foreign-born population spoke only English at home. A further 35 percent spoke English “very well”. However, that leaves nearly half of foreign-born individuals who characterize their skills in English as less proficient.
The United States labor force is changing in many ways. A substantial part of the labor force is foreign-born, so an understanding of that population’s characteristics is key to understanding the overall economy. The information provided by BLS on the foreign-born workforce can help policymakers as they consider and pass legislation aimed at promoting a healthy economy.
