July 19, 2021

Here’s What We Know about Foreign-Born Workers in the U.S. — and How Their Demographics Compare to the Native-Born Population

Foreign born workers make up nearly one-fifth of the U.S. labor force. Understanding the differences between foreign- and native-born workers sheds light on important details of the U.S. economy, with implications for our budget and policy choices. Annual data published by the Bureau of Labor Statistics (BLS), as well as data from the American Community Survey (ACS), provide a useful look at the significant contributions that foreign-born individuals make to the United States’ economy.

Highlights from the most recent BLS and ACS data include the following takeaways:

  • There were 27 million foreign-born workers in the United States in 2020, who made up 17 percent of the total workforce.
  • Overall, foreign-born workers earn 89 percent as much as native-born workers; however, foreign-born workers that are age 25 or older with at least a bachelor’s degree earn more than native-born workers with those characteristics.
  • The unemployment rate for the foreign-born population was higher than that of the native-born population, demonstrating the disproportionate effects the COVID-19 pandemic had on the foreign-born workforce.
  • The foreign-born population has a higher rate of labor force participation than the native-born population.
  • The share of foreign-born adults with at least a bachelor’s degree is lower than the share of native-born adults with that level of education. However, foreign-born individuals from several regions of the world 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 2019, the U.S. population of 328 million included 45 million foreign-born individuals, or roughly 14 percent. That percentage has varied throughout history. In 1970, for example, foreign-born individuals composed only 5 percent of the total population. At other points in history, such as the late 1800s, the foreign-born population was about the same share of the population as it is today.

The size of the foreign-born population has varied over time

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How Much Do Foreign-Born Workers Earn?

Foreign-born individuals typically earn less than native-born individuals — on average, 89 cents for every dollar earned by their native-born counterparts. That disparity generally holds true across age groups and education levels, with one significant exception. Foreign-born individuals with a bachelor’s degree or more had median weekly earnings of $1,492 per week in 2020, about $83 per week higher than the median for the native-born population with that level of education.

Earnings vary by education and birthplace

Education Level Median Weekly Earnings
Native Born Foreign Born
Less than a high school diploma $655 $601
Highschool graduate, no college 801 702
Some college or associate degree 910 829
Bachelor’s degree or more 1,409 1,492
All Education Levels 1,057 909

SOURCE: Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics —2020, May 2021.
NOTES: The foreign-born population is defined as persons residing in the United States who were not U.S. citizens at birth. The foreign-born population includes legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. Data above are for individuals age 25 and older.

© 2021 Peter G. Peterson Foundation

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A different story emerges when analyzing the data by race. For White, Black, and Asian workers, foreign-born individuals earn slightly more than those who are native-born. However, for workers who are Hispanic or Latino, the foreign born earn considerably less (13 percent) than the native born.

Earnings vary by race and birthplace

Race/Ethnicity Median Weekly Earnings
Native Born Foreign Born
White $1,075 $1,230
Asian 1,277 1,347
Black 794 837
Hispanic or Latino 812 704

SOURCE: Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics —2020, May 2021.
NOTES: The foreign-born population is defined as persons residing in the United States who were not U.S. citizens at birth. The foreign-born population includes legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. The race and ethnicity categories above are mutually exclusive but not exhaustive.

© 2021 Peter G. Peterson Foundation

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Employment Rates of Foreign-Born Workers

From 2007 through 2018, the unemployment rate for foreign-born individuals tended to be higher than the unemployment rate for native-born individuals. The gap reached a peak of 1.5 percentage points in 2009. The trend was interrupted in 2019, but switched back again in 2020, when the coronavirus (COVID-19) pandemic and resulting economic recession disproportionately affected employment for the foreign-born labor force. The unemployment rate for foreign-born workers rose sharply in 2020 to 8.9 percent, or 2.2 percentage points higher than that of the native-born workforce.

The foreign-born population has a higher unemployment rate than does the native-born population

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Meanwhile, the foreign-born population has consistently shown a higher rate of labor force participation. According to BLS, 65.6 percent of the foreign-born population age 25 and older participated in the labor force in 2020, while the native-born rate was 62.5 percent. That difference of 3.1 percentage points means that a significantly larger share of the foreign-born population is either employed or unemployed and looking for work.

The foreign-born population has a higher labor force participation rate than does the native-born population

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Although the foreign-born population has a higher overall rate of labor force participation, that rate varies among age groups. For example, the native-born population age 25 to 34 had a labor force participation rate of 82.5 percent in 2020, which was 6.6 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 3.8 percentage points higher than that of the native-born population.

Labor force participation rates vary by age and birthplace

Age Group Labor Force Participation Rate
Native Born Foreign Born
16 to 24 54.2% 50.9%
25 to 34 82.5 75.9
35 to 44 83.3 78.5
55 to 64 64.1 67.9
65 and older 19.3 20.1

SOURCE: Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics —2020, May 2021.
NOTES: The foreign-born population is defined as persons residing in the United States who were not U.S. citizens at birth. The foreign-born population includes legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants.

© 2021 Peter G. Peterson Foundation

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Education Level of Foreign-Born Workers

The native-born population has a slightly higher level of educational attainment than does the foreign-born population. In 2019, 33.2 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 32.7 percent.

Foreign-born adults are slightly less likely to have a college degree

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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. Those who are now living in the United States but were 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.

Educational attainment of the U.S. population varies considerably based on birth region

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English Proficiency Among Foreign-Born Individuals

The ACS collects data each year about the English proficiency of individuals age 5 or older. Data from the survey showed that in 2019, 16 percent of the foreign-born population spoke only English at home. A further 37 percent spoke English “very well” in addition to speaking one or more other languages. The remaining share of foreign-born individuals, nearly half of the total, characterize their skills in English as less proficient.

A majority of the foreign-born population speaks English well

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The U.S. 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 and the ACS on the foreign-born workforce can help policymakers as they consider legislation aimed at promoting a healthy economy.


Related: Income and Wealth in The United States: An Overview of Recent Data


Image credit: Photo by Getty Images

 

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