Foreign-born workers make up 17 percent of the U.S. workforce. Understanding the differences between foreign and native-born workers reveals important details about the U.S. economy and influences budget and policy choices. Annual data published by the U.S. Bureau of Labor Statistics (BLS) and data from the American Community Survey (ACS) help us understand the important contributions that foreign-born individuals make to the U.S. economy.
Here are some key takeaways from the latest BLS and ACS data:
In 2023, there will be 31 million foreign-born workers in the United States, representing 19 percent of the total workforce. Overall, foreign-born workers earn the same as 87 percent of native-born workers. However, foreign-born workers over the age of 25 with at least a bachelor’s degree earn slightly more than native-born workers with such characteristics. The gap between the foreign unemployment rate and the native-born unemployment rate widened in 2023, partially reversing the post-pandemic convergence trend. The foreign-born population has a higher labor force participation rate than the native-born population. The percentage of foreign-born adults with at least a bachelor’s degree is lower than the percentage of domestic-born adults with that level of education. However, foreign-born people in some parts of the world earn bachelor’s degrees at higher rates than their native-born counterparts.
How do you define “foreign-born”?
According to the BLS, the foreign-born population is defined as “those who reside in the United States but who were not U.S. citizens at the time of their birth.” This includes “legally admitted immigrants, refugees, temporary residents such as students and temporary workers, and illegal immigrants.” Conversely, the BLS defines the mainland-born population as “persons born in the United States or its peripheral regions, such as Puerto Rico or Guam, or persons born abroad where at least one parent is a U.S. citizen.”
In 2022, the U.S. population of 333 million people included 46 million people, or about 14%, who were foreign-born. That proportion has changed throughout history. For example, in 1960, foreign-born individuals made up only 5 percent of the total population. At other points in history, such as the late 1800s, foreign-born people made up about the same percentage of the population as they do today.
How much do foreign-born workers earn?
Foreign-born individuals typically earn less than native-born individuals, with native-born individuals earning 87 cents on the dollar. This disparity generally holds true across age groups and education levels, with one important exception. The median weekly earnings for foreign-born individuals with a bachelor’s degree or higher was $1,637 in 2023, $35 higher than the median for native-born individuals.
When we analyze the data by race and ethnicity, a different story emerges. For white, black, and Asian workers, foreign-born workers earn slightly more than their native-born counterparts. But for Hispanic and Latino workers, foreign-born workers earn just 84 cents for every dollar earned by native-born workers.
Employment rate of foreign-born workers
Over the past few years, the unemployment rate for foreign-born people has tended to be higher than that for domestic-born people. Historically, this gap has widened during recessions, reaching 1.5 percentage points immediately after the 2008 financial crisis and 2.2 percentage points during the COVID-19 pandemic. In 2022, the unemployment rate approaches pre-pandemic levels for both populations, narrowing the gap to 0.1 percentage point, but in 2023, the foreign-born unemployment rate gradually increases, widening the gap to 0.4 percentage point. did.
Meanwhile, the foreign-born population has a consistently high labor force participation rate. According to the BLS, in 2023, 68 percent of the foreign-born population aged 25 and older participated in the labor force, compared to 63 percent of the native-born population. This 5-point difference means that a significantly larger share of the foreign-born population is employed or actively looking for work.
The foreign-born population has a higher labor force participation rate overall, but it varies by age group. For example, the labor force participation rate for the mainland-born population aged 25 to 34 was 85% in 2023, which was 5 percentage points higher than the corresponding foreign-born population. However, among the 55- to 64-year-olds, the foreign-born labor force participation rate was nearly 6 percentage points higher than the native-born population.
Educational level of foreign-born workers
The native-born population has slightly higher educational attainment than the foreign-born population. In 2023, 35.9 percent of the mainland-born population aged 25 and over had a bachelor’s degree or higher. Among foreign-born people over the age of 25, 34.7% had a bachelor’s degree or higher.
However, foreign-born people in some parts of the world have significantly higher levels of education than the foreign-born population as a whole. People who currently live in the United States but were born in South Central Asia, East Asia, Europe, or Africa are more likely to earn a bachelor’s degree than those born in the United States.
English proficiency for foreign-born people
The ACS collects data annually on the English language proficiency of individuals age 5 and older. According to survey data, in 2023, 17 percent of the foreign-born population spoke only English. A further 37% spoke English “very well”. The remaining proportion of foreign-born individuals (nearly half of the total) characterize their English language skills as less than “very good.”
The U.S. workforce is changing in many ways. Because a significant portion of the workforce is foreign-born, understanding the characteristics of that population is key to understanding the economy as a whole. The foreign-born workforce information provided by BLS and ACS helps policymakers consider legislation aimed at promoting a healthy economy.
Related: US Income and Wealth: An Overview of Recent Data
Image credits: Photo courtesy: Getty Images
