Tied to the Business Cycle: How Immigrants Fare inGood and Bad Economic Times

Pia M. Orrenius

Federal Reserve Bank of Dallas and Institute for the Study of Labor (IZA)

Madeline Zavodny

Agnes Scott College and Institute for the Study of Labor (IZA)November 2009

Acknowledgments

The authors wish to make clear that the views expressed herein do not necessarily reflect the viewsof the Federal Reserve Bank of Dallas or the Federal Reserve System. The authors thank MichaelNicholson for excellent research assistance.The Migration Policy Institute is grateful for the generous support of its funders, and with respect tothis research in particular wishes to acknowledge the J.M. Kaplan Fund and the Ford Foundation.

No part of this publication may be reproduced or transmitted in any form by any means, electronic ormechanical, including photocopy, or any information storage and retrieval system, without permissionfrom the Migration Policy Institute. A full-text PDF of this document is available for free downloadfromwww.migrationpolicy.org.Permission for reproducing excerpts from this report should be directed to: Permissions Department,Migration Policy Institute, 1400 16

Street, NW, Suite 300, Washington, DC 20036, or by contactingcommunications@migrationpolicy.org.Suggested citation: Orrenius, Pia M. and Madeline Zavodny. 2009.

Tied to the Business Cycle: How Immigrants Fare in Good and Bad Economic Times.

Washington, DC: Migration Policy Institute.

Table of Contents

Executive Summary..........................................................................................................................................1 I. Introduction..............................................................................................................................................3 II. How Do Labor Market Outcomes and Poverty Rates Compare between Immigrants andNatives over the Business Cycle?.................................................................................................................6A. Employment and Unemployment................................................................................................6B. Earnings..........................................................................................................................................14C. Poverty...........................................................................................................................................16 III. Why Are Immigrants More Vulnerable to Business-Cycle Downturns than Natives, andWhich Immigrants Are Most Affected?....................................................................................................18A. Education.......................................................................................................................................19B. Race, Ethnicity, and Country of Origin...................................................................................22C. Industry and Occupation...........................................................................................................25 IV. What Can Public Policy Do to Reduce the Disparate Impact of Business-CycleDownturns on Immigrant Households?....................................................................................................26 V. Conclusion.........................................................................................................................................30 Appendices......................................................................................................................................................31 Works Cited...................................................................................................................................................33 About the Authors........................................................................................................................................37