Immigrants and the Current Economic Crisis

Research Evidence, Policy Challenges, and Implications

Demetrios G. Papademetriou and Aaron Terrazas
Migration Policy Institute

January 2009


For their helpful comments on earlier versions of this paper, the authors thank Randy Capps,
Michael Fix, Michelle Mittelstadt, and Madeleine Sumption of the Migration Policy Institute (MPI)
and the members of MPI’s Labor Markets Advisory Group. For advice on data considerations, the
authors thank Jeffrey Passel of the Pew Hispanic Center.

This paper is a research product of MPI’s Labor Markets Initiative. For more on the Initiative,
please visit For a complete list of members of the Labor Markets
Advisory Group, please visit

Financial support for the Labor Markets Initiative is provided by the Ford Foundation and the J.M.
Kaplan Fund.

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Suggested citation: Papademetriou, Demetrios G. and Aaron Terrazas. 2009. Immigrants and the Current Economic
Crisis: Research Evidence, Policy Challenges, and Implications. Washington, DC: Migration Policy Institute.


Executive Summary
The United States is in an economic crisis that may already be the worst since the Great Depression
and some fear that the country may be in a downward spiral. For immigration analysts and
policymakers alike, the crisis raises fundamental questions about how current and prospective
immigrants will fare, and how they will respond to the already severe downturn. A widening circle of
government officials, business and community leaders, advocates, and researchers in the United
States and other major immigrant-receiving countries, as well as major sending ones, are trying to
think through the implications of these events — for the economy and society, for public policy,
and for the individuals and families themselves.

At the heart of this issue are complex, and often politically charged, questions of whether
immigrants — both legal and unauthorized — are leaving the United States in large numbers as
certain job sectors contract? And are would-be immigrants deciding not to come at all? Though
anecdotes abound, reliable answers to these questions are not easy to come by, primarily because
there has been no analog to the current situation during the professional lives of those who study
migration or make immigration policy. The picture is further complicated by the fluidity of the
global economic climate and evolving immigration enforcement policies.

Nonetheless, one can look at what is known and use experience and insight to speculate about how
this crisis might play itself out. Careful analysis of historical evidence and the most recent data, a
nuanced understanding of the motivations and likely behavior of immigrants, and a degree of
educated speculation together can provide a useful guide to the implications of the crisis.

This paper examines the current economic crisis, its impact on immigrants, and its likely effect on
immigration flows to and from the United States. The paper’s major findings include the following:

 A growing body of evidence suggests that growth in the US foreign-born population has
slowed since the recession began in late 2007; much of the slowdown can be attributed to
the fact that there has been no significant growth in the unauthorized population since 2006.
 Anecdotal evidence suggests that return migration to some countries, including Mexico,
appears to have increased in the last two years; however, data do not yet substantiate these
reports. As a result, there is no definitive trend so far that can be tied in a significant way to
US economic conditions. Some observers’ attempts to tie immigrants’ returns (other than
removals) to the substantial increases in interior immigration enforcement appear to be
 Generally speaking, return migration flows appear to correlate more closely with economic,
social, and political developments in countries of origin, and with the ease of circulation, than
with economic conditions in receiving countries such as the United States. For instance,
sustained economic improvements in Eastern Europe — along with the guarantee of
continued labor market access — are widely thought to have facilitated the large-scale return
migration of Poles and certain other Eastern Europeans since the British and Irish
economies began to slow down in 2007.
 Nevertheless, several factors taken together, such as the growing anti-immigrant animus of
the past few years; increasingly strict federal, state, and local immigration enforcement
policies; a much more robust border enforcement effort; improving economic and political
conditions in some migrant-sending countries; and the worsening US economic climate have
contributed to a measurable slowdown in the historic growth in overall immigration.


Generally. Immigrants are also highly overrepresented in many of the most vulnerable industries — including construction. all social and humanitarian legal flows (family unification.  Deeply felt family obligations (including the need to continue to send remittances to relatives in the country of origin) and lack of access to the federal social safety net often force immigrant workers to go to extraordinary lengths to remain employed or find new employment quickly. Employment-based immigration accounts for a relatively small share of overall legal immigration and the pent-up demand that exists for employer-sponsored visas should continue to drive employment-based immigration. While such flexibility and determination are commendable. Immigrants from Mexico and Central America are even more concentrated in many of these industries. there is an increasing probability that some immigrants may eventually choose to return to their countries of origin. and asylum flows) can be expected to behave without regard to the economic cycle for the foreseeable future. such as pushing immigrant workers into dangerous working conditions or informal work. refugee. took years to secure.  Public policies — such as the lack of access to the social safety net for unauthorized immigrants and many recently arrived legal immigrants — may increase immigrants’ vulnerability to abject poverty if they become long-term unemployed. many sectors in low value-added manufacturing. lower levels of education. they may have less laudable consequences. Legal immigration appears least tied to US economic conditions because most legal immigrants arrive on family-based visas that. including relative youth. at least for the near term.  On average. and as a result. and recent entry into the labor force. leisure and hospitality. in many cases.  At the same time. bear a disproportionate share of the downturn’s consequences. immigrants (and especially recent immigrants) may be able to adjust more quickly than native-born workers to changing labor market conditions because they are more amenable to changing jobs and their place of residence for work-related reasons. and support and personal services — and in many of the most vulnerable jobs within those industries. most immigrants share the demographic characteristics of the workers who are most vulnerable during recessions. iii . Consequently.

Introduction On December 1. Although immigrants have come from all over the globe over the course of the last three decades. what other factors might explain changes in immigration flows observed since the current economic crisis began?  How do immigrants fare in the US labor market during recessions? The analysis cannot answer the full range of questions that arise from the complex relationship between immigration flows and business-cycle fluctuations. a fact that massive governmental interventions might mitigate but are not likely to reverse — at least not in the next year. and it uses the available evidence to frame several important issues that. and a degree of educated speculation to examine the potential impact of the economic crisis on immigration flows to and from the United States. And an avalanche of increasingly dismal economic assessments from most parts of the world points to a severe and deepening global economic crisis. it relies on evidence about prior recessions and their effects on immigration trends. The paper poses and partially addresses the following policy questions:  How has the number of immigrants in the United States changed since the recession began?  How might the flows of immigrants by entry category change?  Beyond the economy. For much of the past decade. 2008 the National Bureau of Economic Research (NBER) officially declared the United States in recession. For policymakers and analysts. This report combines careful analysis of the most recent data. In doing so. Rather.6 million in 1970 to about 38. It is still unclear how deep. and long this recession will be. and estimated that it began in December 2007.2 The US foreign- born population had quadrupled from 9. the current economic crisis raises fundamental questions about how immigrants who are already here and those slated to enter in the coming years will fare and how they might respond to the economic downturn. 1 . both in the United States and in most of the world. and about another half a million have settled illegally. Both analysts and policymakers face many unknowns. more than ever. to the degree possible. growth account for another 27 percent (compared to 9 percent in 1970) while the combined share from Europe and Canada has plummeted to 15 percent — less than a quarter of its share 40 years ago (68 percent). it reviews the limited available literature and data on the impacts of economic crises on immigration flows and immigrants in the labor market. Now. expert judgment and insight must provide guidance. Nor does it attempt to project the future trajectory of immigration flows to the United States or the performance of the US economy. the US economy had grown in 23 of the past 25 years. who have also experienced significant. And immigrants from Latin America (including Mexico) and the Caribbean now account for over half (54 percent) of all immigrants (compared to 18 percent in 1970).I. Before 2007. if less dramatic.1 This makes the current US recession already longer than all but two since World War II. Mexico’s share of the total foreign-born population in the United States has increased by a factor of four (from 8 to 31 percent). During this period of sustained economic growth the United States attracted record numbers of new immigrants. wide. more than one million immigrants have entered the United States legally each year. But one thing seems clear: the recent period of unparalleled economic growth and prosperity has come to an abrupt end. Asians. policymakers will need to address. a nuanced understanding of America’s immigration history and the motivations and likely behavior of immigrants. These questions appear particularly daunting because there has been no comparable crisis in recent memory.1 million in 2007.

many wonder how the stock of immigrants in the United States might change and how immigrants have already and will likely continue to respond to the recession.4 Figure 1. More recent monthly data from the CPS.II. show a leveling-off of the immigrant population since mid-2007. The growth of the stock of immigrants in the United States has slowed recently.3 In contrast. between 2000 and 2006. The ACS registered a net increase of just over 500. a monthly survey conducted by the US Bureau of Labor Statistics and the Census Bureau. although the data also reflect seasonal trends (Figure 1). Monthly Estimate of the US Foreign-Born Population. Available data suggest both slower growth in the stock of the foreign born in the United States and slightly slowing inflows of immigrants — especially from Mexico. 2 . the ACS.1 million). and other data sources suggest the net annual increase in the foreign-born population was higher — approaching one million.000 immigrants between 2006 and 2007 (from 37. Source: Migration Policy Institute analysis of US Census Bureau. January 2000 through November 2008 38 37 36 35 34 33 32 31 Recessions (monthly) 30 Estimated foreign-born population (millions) 29 Jul 00 Nov 00 Jul 01 Nov 01 Jul 02 Nov 02 Jul 03 Nov 03 Jul 04 Nov 04 Jul 05 Nov 05 Jul 06 Nov 06 Jul 07 Nov 07 Jul 08 Nov 08 Jan 00 May 00 Jan 01 May 01 Jan 02 May 02 Jan 03 May 03 Jan 04 May 04 Jan 05 May 05 Jan 06 May 06 Jan 07 May 07 Jan 08 May 08 Mar 00 Sep 00 Mar 01 Sep 01 Mar 02 Sep 02 Mar 03 Sep 03 Mar 04 Sep 04 Mar 05 Sep 05 Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Note: Estimates are based on a three-month moving average. Data from official population surveys suggest that the historic growth in the stock of immigrants in the United States is slowing.5 million to 38. The first slowdown appeared in the US Census Bureau American Community Survey (ACS) data for 2007. How has the number of immigrants in the United States changed since the current economic crisis began? Given the current economic climate. Current Population Survey (CPS). January 2000 to November 2008. Basic Current Population Survey.

The Mexico/Central America category includes foreign born from Belize. El Salvador. the CPS counted about 37. and Panama.6 million immigrants counted in November 2007. Data and statistical and respondent idiosyncrasies aside. CPS data also show that similar to the recent past.In November 2008. January 2000 to November 2008. An increasing reluctance on the part of illegally resident immigrants to continue to respond to government surveys in an environment of strongly increasing enforcement. Monthly Estimate of the US Foreign-Born Population by Region of Origin. Mexico. Honduras.6 The number of immigrants from regions of the world other than Mexico and Central America also displays some seasonal trends but the general trend has been flat for about a year. 3 . Figure 2. it seems clear that the growth of the foreign-born population has slowed. the number of Mexican and Central American immigrants in the United States fluctuates seasonally — although the overall direction continues to be generally upward (see Figure 2). Basic Current Population Survey. the increases observed between November 2007 and January and November 2008 are not statistically significant — they could be due to statistical variation in population sampling in the CPS — so it is not clear whether the observed changes in the long-term trend amount to an actual decline. January 2000 to November 2008 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 Jul 00 Nov 00 Jul 01 Nov 01 Jul 02 Nov 02 Jul 03 Nov 03 Jul 04 Nov 04 Jul 05 Nov 05 Jul 06 Nov 06 Jul 07 Nov 07 Jul 08 Nov 08 Jan 00 May 00 Jan 01 May 01 Jan 02 May 02 Jan 03 May 03 Jan 04 May 04 Jan 05 May 05 Jan 06 May 06 Jan 07 May 07 Jan 08 May 08 Mar 00 Sep 00 Mar 01 Sep 01 Mar 02 Sep 02 Mar 03 Sep 03 Mar 04 Sep 04 Mar 05 Sep 05 Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Recessions (monthly) Estimated foreign-born population from Mexico and Central America (millions) Estimated foreign-born population from other regions of the world (millions) Note: Estimates are based on a three-month moving average.7 million immigrants in the United States. and greater proportions of more mobile. slightly up from 37. even itinerant. Source: Migration Policy Institute analysis of US Census Bureau. however.4 million in January 2008 and the 37. Costa Rica. Guatemala. Nicaragua.5 However. legal and unauthorized immigrants in search of jobs could also have a small influence on trends observed in the CPS. the latest month for which data are currently available.

7 The most recently reported data for fiscal year 2007 — which ended in September 2007 — are not recent enough to make any judgments about the flow since the recession started.8 Immigration from South America has slowed. They undergo a lengthy official immigration application 4 . humanitarian migrants (including refugees and asylum seekers). and flows from the Middle East are also increasing but are very small overall. the National Institute of Statistics. Immigration flows from Europe and Canada also appear to be slowing.4 per 1.6 per 1. but the slowdown is in line with longer-term trends since about 2000 and reflects in large part tighter visa-issuing policies by the US State Department (intended to reduce visa overstaying from certain countries in the region) and closer cooperation from Mexico in reducing the entry into Mexico of the third-country nationals most likely to subsequently seek to enter the United States illegally. it began increasing again midway through the recession in September 2001.000 in 2007 and 8.000 in 2008. estimates of flows can be derived from some sample surveys including the CPS. and Information Technology (INEGI) — the rate of outmigration from Mexico in the spring (February to May)9 has slowed over the past two years from 14. Pew Hispanic Center Demographer Jeffrey Passel estimates that immigration from Mexico has slowed and that flows from Central America show signs of a decrease as well. Unofficial estimates of immigration flows based on the CPS suggest a slowdown in total immigration of an uncertain size. According to the National Survey of Occupations and Employment (ENOE) — a labor force survey of 120.Official flow data are not recent enough to identify trends during the current recession. By contrast.10 III. Flow data on the entry of new legal immigrants to the United States are reported each fiscal year by the US Department of Homeland Security (DHS).000 residents in 2006 to 10. Migration to the United States is composed of several major categories or types of flows: Lawful permanent residents (LPRs). unauthorized migrants. immigration from Asia appears to be increasing. The current recession is already longer and deeper than the 2001 recession. LPRs. the largest group. are admitted to the United States primarily because of family ties and. historical evidence. While all recessions are unique.8 per 1. knowledge of the complexities of the US immigration system. Geography. However. Other data sources confirm the slowdown in immigration from Mexico. but unofficial estimates suggest a slowdown of an uncertain size. and a solid understanding of immigrants’ motivations can provide insight into how the flow of immigrants entering through different legal channels might behave during the current recession. although the magnitude of these changes is not clear. only secondarily. How might the flow of immigrants by entry category change? The number of immigrants in the United States fluctuated very little from its long-term upward trend during the most recent recession — which officially lasted from March to November 2001 — as Figure 1 (above) shows. directly for employment. Although the number of immigrants declined initially.000 Mexican households conducted four times each year by Mexico’s official statistical agency. and temporary workers and students. Each of these flows is likely to respond differently to changing labor market conditions.

Refugees are resettled in an orderly manner from large pools of eligible applicants.11 Unauthorized immigrants are those who either entered the country illegally — typically by crossing the border with Mexico — or overstay or otherwise violate the terms of a valid visa. historical evidence does not point to a direct. This timing suggests that the decline in legal immigration observed during the Great Depression may be also explained by the Immigration Act of 1924. Political and legal factors also clearly influence immigration trends observed for the past three decades. Each period of US history is unique so historical comparisons must be taken with caution. Research conducted by the Mexican Migration Project at Princeton University and the University of Guadalajara in Mexico found that during the Great Depression the annual flow of legal immigrants from Mexico declined dramatically from around 46. when the US government conducted systematic roundup and removal operations directed at Mexican workers. some students are granted the right to work for a period of up to 18 months after completing their studies under the Optional Practical Training (OPT) regulation.700 per year during the 1930s. 2001. however. Foreign students can work in the United States in addition to studying. the decline following the 2001 recession is strongly related to the heightened security climate following September 11. and institutionalized penalties for employers who hire unauthorized workers — immigration trends became strongly influenced by policy changes and operational and administrative priorities and failures. available historical evidence does not suggest a direct. Temporary workers are admitted on work visas issued after a successful petition by their prospective employer. long-term relationship between legal immigration flows and the ups and downs of the US economy.12 On balance.process and most have to endure long waiting periods. After the attacks. reformed the seasonal agricultural worker program. In addition. Students enter the United States on visas whose duration corresponds to the term of their studies. Similarly. long-term relationship between business-cycle fluctuations and legal immigration flows. The dramatic decline in admissions following the July 1990 to March 1991 recession is largely the result of the end of the wave of IRCA legalizations. and asylum seekers apply for refugee status after arriving at a port of entry or from inside the United States following a change of circumstances in their home country.13 More recent Migration Policy Institute (MPI) analysis of DHS data on legal permanent immigrant admissions and NBER historical data on US recessions show that the decline in legal immigration observed during the Great Depression (the recession that officially lasted from August 1929 to March 1933) actually began in 1928 — before the stock market crash of 1929 (see Figure 3). which imposed severe quotas limiting the annual inflow of new immigrants from most countries and which took effect in 1928. The changes required more rigorous reviews of all petitioners for immigration benefits by the Federal Bureau of 5 . both the Immigration and Naturalization Service (INS) and the State Department made extensive changes to their procedures in order to strengthen security screening and diverted adjudications personnel and resources to security operations. Changes in the volume of immigration flows following recent recessions appear to be mostly the result of policy changes and administrative delays although some variation — especially in much earlier times — is likely due to economic conditions as well.000 per year during the 1920s to less than 2. Following the passage of the Immigration Reform and Control Act (IRCA) of 1986 — that legalized nearly 3 million unauthorized immigrants.

LPRs arrive in the United States through several immigration categories: family reunification.15 Only employment sponsorship — which accounts for about 15 percent of all LPR inflows — is explicitly linked to labor market needs. status adjusters were about three times more likely to be sponsored by an employer than newly arriving LPRs (21 percent of status adjusters compared to 7 percent of new arrivals). Each month the State Department publishes the filing dates of petitions currently being processed. 2001 and May 1. Accordingly. DHS admissions from the two most recent recessions are clear on this point. These adjustments slowed the processing of applications dramatically in 2002 and 2003. About 58 percent of LPRs admitted between 1998 and 2007 were status adjusters. Together. the effect on overall permanent admissions will be small. reinforces the relative rigidity of the total LPR flow. 1. pent-up demand will likely continue to drive employment-based immigration in the short term. As a general rule.Investigation (FBI). employment- based admissions do not appear to respond to business-cycle fluctuations. the diversity visa program. the State Department was processing visas for skilled employment-based visas (second and third preference) filed between October 15. the large share of status adjusters among total LPRs. 3. employer sponsorship. 2008. Pent-up demand for employment-sponsored visas means that actual lower admissions in these categories are not anticipated in the immediate future. and their high labor market attachment. The total yearly inflow of permanent immigrants is composed of status adjusters and new arrivals to the United States. the number of new status adjusters is less likely to immediately respond to changes in the labor market since so many are already employed and do not need to find new jobs. 2005 depending upon the nationality of the applicant. lawful permanent resident (LPR) immigration flows are less responsive to the US economic cycle than those for unauthorized immigrants and temporary workers.) 6 . family reunification accounts for about two-thirds of lawful permanent immigration. Lawful permanent immigration flows are least responsive to the US economy. 2. The majority of LPRs in recent years have been status adjusters who already reside in the United States and tend to have strong ties to the labor market. and a variety of other smaller.16 By contrast. Whenever there are more applicants for a visa category than there are available visas. Although they are designed to respond to labor needs. Visa processing slowed for all applicants but the process ground to a virtual halt — sometimes for years — for a subset of applicants about whom the FBI had questions. (Most LPRs work once they reach the United States — regardless of whether they entered through family reunification. This trend is the result of pent-up demand for employment-sponsored visas and the relatively short duration of these recessions. humanitarian cases (refugee and asylum adjustments). Status adjusters are individuals who enter the United States in one legal status (such as that of a student or a temporary worker admitted under one of the few temporary work visa categories that allow the holder to change status) and then apply for permanent residency while still in the country. The relatively small share of employment-based immigrants means that even if demand for such visas slackens in 2009. targeted categories. Over the period 1998 to 2007.14 Even if new demand for employer-sponsored visas falls. Status adjusters appear to have higher labor market attachment than new arrivals and tend to be more embedded in the US economy and society than newly arriving immigrants. As of December 8. the category becomes “oversubscribed” and immigrant visas are issued in the chronological order in which the petitions were filed until the annual numerical limit for the category is reached.

4 World War I Sept. 1952 Act. 4 World War II 0.0 Immigration and 1.dhs. 8 Persons obtaining lawful permanent resident status (annual) 1.xls.0 0. Legislation from. Persons Obtaining Lawful Permanent Resident Status in the United States (annual. normally visible in real GDP. The National Bureau of Economic Research defines a recession as “a significant decline in economic activity spread across the economy. Immigration and Immigrants: Setting the Record Straight (Washington. 6 1. Available at http://www. quarterly). DC: The Urban Institute. 11. lasting more than a few months.” The first broad modern assertion of the federal regulatory power in the immigration area is generally considered the Chinese Exclusion Act of 1882. 1882 Immigration and 1. industrial production.2 Naturalization Act.2 0.0 2. 2 0. Recessions are based on quarterly data from peak to trough of the business cycle.8 1. Fiscal Years 1882 to 2007 2. 0 Recessions (quarterly) 1.6 0. 1. 1924 1. Michael Fix and Jeffrey S. in millions). 0 1882 1887 1892 1897 1902 1907 1912 1917 1922 1927 1932 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 Note: These data represent persons admitted for lawful permanent residence during the 12-month fiscal year ending in October of the year designated. Source: Migration Policy Institute analysis of Table 1 in US Department of Homeland Security.6 1. 2 IRCA 1. Office of Immigration Statistics.html#announcements. Available at 4 Chinese Exclusion 2001 Act.4 0. May 1994).nber. 1965 Great Depression 0. and wholesale retail sales. The total for 1976 includes both the fiscal year and transitional quarter data. employment. real income. 1891 0. the Business Cycle (peak to trough. 0 Immigration Naturalization Act. 6 0.8 0. US Business Cycle Expansions and Contractions. Data on recessions from National Bureau of Economic Research. 8 Immigration and Nationality Act. 7 . Yearbook of Immigration Statistics 2007. and Key Immigration Legislation.Figure 3.

19 Where labor market tests are required to ensure that employers have made an effort to recruit local workers.20 Worker shortages may continue due to geographic mismatches and in occupations that are particularly unappealing and physically demanding (such as agriculture). Some unemployed workers already in the country — including both natives and immigrants — may be unwilling to move to regions of the country where jobs are available due to family ties or other personal constraints. Temporary worker programs are intended to fill seasonal and other labor market gaps. but not all do so. information technology. require specialized knowledge or training (such as health care. While budget allocations for the refugee resettlement program can be susceptible to budget cuts that often occur during economic downturns. or advanced sciences). As a result. There is a wide range in the duration and conditions of admission for temporary workers whose visas can be valid for as long as six years and. their flows are typically unrelated to economic conditions. However. may choose to continue their education rather than move or remain unemployed. this adjustment does not occur automatically. temporary worker programs might be expected to respond relatively quickly to the business cycle.17 Because refugees and asylees are fleeing persecution. if the economic crisis leads to humanitarian emergencies — such as armed conflicts or famines — new pressures on humanitarian flows are expected to emerge and the US government is likely to respond in ways that may also include some new admissions. other international political upheavals. such as those without family obligations or with significant savings. Some workers who are able to do so. deciding to rely on their savings. or are expected to continue growing robustly (such as elder care). in some cases (such as with the O and TN visas) indefinitely. overall one should expect foreign wars. These trends might lead to fewer labor shortages and lower demand for temporary workers. Many temporary worker flows gradually adjust to labor market conditions. the income (and the hospitality) of family members. Refugees and asylees represent a small share (about 7 percent) of the US immigrant population. or they may be unwilling to take jobs that they find financially or socially unattractive. Others may prefer to drop out of the labor force entirely. Rising unemployment during recessions will presumably steer workers already in the country toward sectors where jobs are available. While many temporary worker programs should respond to labor market changes. The degree to which unemployed workers already in the country are willing and able to adjust to a changing labor market will strongly influence the demand for temporary workers during a recession.18 In many cases there are limits on the number of temporary workers allowed into the country each year — either through annual quotas (for example H-1B visas) or by requiring employers to prove that US workers are unavailable for a particular job (for example H-1B and H-2A visas). Refugee admissions are set yearly by the administration and must be approved by Congress. and changes in US policy priorities (such as increased admissions of Iraqi refugees) to be much more important than US economic conditions in determining refugee flows. or the social safety net. 8 . not all do so.Humanitarian immigration flows are largely independent of the US economic climate.

they provide the most complete portrait currently possible.26 Estimates of the unauthorized population over time based on the CPS show a strong correlation with recessionary periods in recent years. demand for visas from both US employers and foreign workers exceeds the supply. The number of legal immigrant visas is set by legislation independent of economic conditions.4 million to 11.Illegal immigration should be more responsive to economic changes than legal immigration. which has contributed to reducing circular migration dramatically over the past two decades24. Some analysts have studied the relationship between illegal immigration and business-cycle fluctuations by relying on data from large official sample surveys and border apprehensions.22  unauthorized workers’ greater intersectoral mobility and high geographic mobility within the United States. Federal Reserve Bank of Dallas Senior Economist Pia Orrenius observes that.27 From 2000 to 2008.  the rising cost of illegal entry to the United States23.21 Accordingly. and  the unstable security climate fueled largely by rising narco-violence in Mexico and the Central American countries that together are the source of most unauthorized immigrants in the United States. The evidence overall. large-scale return migration of the unauthorized is unlikely absent protracted and severe economic conditions in the United States. the unauthorized population increased by more than 40 percent — from an estimated 8. These include:  unauthorized immigrants’ high degree of attachment to the labor force.9 million. suggest that large returns of unauthorized migrants may be unlikely. large-scale return migration of the unauthorized is unlikely absent protracted and severe economic conditions in the United States. According to Pew Hispanic Center estimates. These studies show that illegal migration to the United States is driven by both the prospect of employment in the destination country and the economic climate in source countries. by employment prospects in the United States. the most recent recession and the current recession are the only two time periods when the estimated unauthorized population observed in these data did not increase. when a six-month lead is accounted for. However. their migration decisions are influenced by other factors as well.28 There were estimated increases in the unauthorized population in each of these years. These rigidities in the US legal immigration system force many economic migrants into illegal channels. confirms this viewpoint and suggests that illegal immigration flows tend to be highly responsive to the US economy. While unauthorized migrants are motivated. discussed below. Indeed. in large part. Still. Family reunification is another important factor driving illegal immigration.30 9 . illegal immigration flows should be more responsive to economic changes than legal immigration flows. several characteristics of the unauthorized immigrant population as well as recent trends along the Southwest border and in Mexico and Central America. the growth of the unauthorized immigrant population in the United States has slowed recently although it is not yet clear if the slowdown represents a decline in the stock of unauthorized immigrants in the United States. except for 2001-02 and 2007-08.25 Although both sources are flawed. As a result. Border apprehensions data add support to the conclusion that illegal immigration is correlated with the business cycle. fluctuations in migrant apprehensions along the Southwest border closely track changes in US labor demand since about the 2001 recession (see Figure 4).29 Thus.

000 160 Apprehensions (thousands) 140 500 120 100 0 80 -500 60 40 -1. Federal Reserve Bank of Dallas.32 As a result.”31 Figure 4.500 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Note: De-trended employment shifted six months. the evidence suggests that inflows of new immigrants to the United States have slowed substantially since the economic crisis began. Data from: US Department of Labor.000 20 Apprehensions Employment 0 -1. Yet when a recession is deep and prolonged — as the current crisis appears to be — there are more opportunities for employers and workers to adjust their expectations and behaviors. the precise relationship between immigration flows and business cycles is difficult to pin down. Office of Immigration Statistics. employment data correspond to six months after the month indicated. with steep increases in the flow toward the end of expansion phases of the business cycle and significant decreases during economic downturns. Bureau of Labor Statistics. 1991 to 2008 200 1. Cornelius et al. California. Beyond the economy. IV. Still.Using survey data from interviews with immigrants in the Mexican state of Oaxaca and in San Diego County. These adjustments become further complicated when economic crises are international — as is the current one. Source: Courtesy of Pia Orrenius. US Department of Homeland Security. what factors might explain changes in immigration flows observed since the current economic crisis began? On balance. Migrants decide to move for various reasons and political and social factors often influence their decisions as much as economic ones. Apprehensions data correspond to the month indicated. 10 . both businesses and individuals are unlikely to make long-term decisions regarding employment and residence based on what are often perceived (at least initially) as short-term fluctuations in the business cycle — particularly given the lag between the onset of a recession and adjustments on the part of both employers and workers. Border Apprehensions as a Function of US Labor Demand.500 180 Total employment growth (thousands) 1. reach a similar conclusion finding that “undocumented migration responds to changing US economic conditions.

Federal. several states — most notably Arizona. state laws and selective enforcement could also erode a state’s business competitiveness and encourage businesses to relocate to neighboring states. 11 .37 Data are not yet available to show definitive trends. A recent study suggested that a significant drop in the number of less-educated Hispanic immigrants in the monthly CPS data. state laws and selective enforcement strategies will probably first divert unauthorized immigrants to other destinations within the United States rather than induce return migration. They may also force unauthorized immigrants into increasingly informal and precarious employment situations and further isolate them from US society. as well as unauthorized immigrants who happen to be in the same household or nearby. Colorado. They include:  Changing US federal immigration enforcement policies and strategies and the proliferation of state laws targeting unauthorized immigrants and their employers.35 In addition. could be attributed in part to the economy and in part to enforcement. and  The growing effectiveness of the border enforcement effort. and South Carolina — have enacted legislation designed to curb illegal immigration through mandatory verification of employment eligibility. restrictions on eligibility for public services. state.38 It is not possible to identify the destinations of those who have left these states.In addition to changing demand for workers in the US labor market. state.  The depth and speed with which the economies of migrant-sending economies (especially Mexico and Central America) have been affected by the US downturn. and it is difficult to disentangle the effects of the economic crisis from those of much more stringent enforcement regimes and the unwelcoming environment that enforcement creates. further destabilizing local labor market and broader economic conditions.34 That figure grew to about 361. Mississippi. and local authorities is deterring illegal immigration and convincing some unauthorized migrants to return to their home countries. In the context of a slowing economy. and similar provisions.  Sustained high levels of deportations. several other variables are contributing to the changes in immigration observed since the economic crisis began. Teams of immigration enforcement agents.33 DHS formally deported 319.  The intensity of anti-immigrant animus in many parts of the country. Some observers have argued that increasingly strict enforcement of immigration laws by federal. and local immigration enforcement policies and other factors are likely initially to divert unauthorized immigrants to other destinations rather than induce return migration. from summer 2007 to spring 2008. often arresting significant numbers of unauthorized workers for removal. unless implementation of enforcement regimes — both on the federal and state levels — is nationwide. However. have been locating growing numbers of noncitizens with outstanding orders of removal because of non-immigration crimes. but anecdotal evidence suggests that some immigrants (both legal and unauthorized) are leaving states that have imposed strict immigration regulations.000 in fiscal 2008 according to preliminary DHS reports.382 immigrants in fiscal 2007 — a record number and a 14 percent increase from 2006.36 At the same time. in an initiative called the National Fugitive Operations Program (NFOP). DHS has been conducting a steady stream of high-profile worksite raids. criminalization of harboring and transporting unauthorized immigrants. Oklahoma.

Over the past year (from December 1. Given the pace at which the global economic outlook is deteriorating. As a result. the collapse of the US automobile industry could have dire implications for employment prospects in Mexico. and the Indian rupee has suddenly increased the real value (in pesos.40 Similar to trends observed over the past decade.39 The International Monetary Fund (IMF) and the World Bank project that some emerging economies — notably China. Migration is driven by both the economic climate in source countries and the prospect of employment in the destination country. and Brazil — will grow through 2009 although at slower rates than in the recent past. economic crises in Mexico have resulted in higher levels of migration to the United States. more recent indicators — including slack energy demand (in Brazil). which has become increasingly dependent on automobile and automobile parts exports to the United States.1 percent. 2007 and December 1. and the approval of an economic stimulus plan by the Chinese government reportedly to boost domestic demand — suggest that the global slowdown is spreading quickly to these emerging economies. In particular. Currency fluctuations are wild cards in peoples’ decisions whether to emigrate. economists Gordon Hanson and Antonio Spilimbergo conclude that when wages in Mexico change relative to wages in the United States. apprehensions respond within the current month. or return to their countries of origin. Currency fluctuations in response to the business cycle may encourage some migrants to remain abroad rather than return to their countries of origin. 2008). It is the perception of a large “opportunity differential” between countries that leads many to migrate. the Brazilian real.9 percent in 2006 to 1. they estimate that a 10 percent decrease in the Mexican real wage relative to the United States gives rise to at least a 6. the Mexican peso depreciated 22 percent. Historically. the World Bank expects that economic growth in Mexico will slow to 1. the forecast is less optimistic. the employment prospects for some highly skilled migrants returning to these economies appear strong. India. However. falling industrial output (in India). In a study correlating apprehensions along the Southwest border with relative wages in the United States and Mexico.The depth and speed with which the economies of migrant-sending economies are affected by the US downturn will strongly influence immigration trends. recessions spread quickly from the developed to the developing world. However. A strengthening US dollar increases the real value of remittances (relative to country of origin currency) by making migrants’ income even more valuable for family members remaining in the country of origin.4 to 8. the degree to which some emerging economies may have partially “decoupled” from business cycles in developing countries could dramatically alter the recession’s impact on immigration flows. the recent rapid depreciation of the Mexican peso. Traditionally. A robust debate continues over whether some emerging economies will be able to sustain growth despite the global slowdown. stay abroad. reais. and rupees) of remittances to these countries. the Brazilian 12 . a healthy degree of skepticism is useful when considering projections that suggest that emerging economies will be immune to the developed world’s woes. For Mexico. For instance.7 percent increase in attempted illegal immigration. The IMF expects that the Mexican economy will continue to be closely tied to the US economy and predicts that economic growth will slow from 4. how sending and receiving countries fare during business-cycle fluctuations matters a lot in trying to anticipate how immigrants and prospective immigrants might behave during a severe downturn.41 More precisely.8 percent in 2009.

the ratio rose to one departure for every two entries during the Great Depression. On balance. Generally.real dropped 33 percent. policies encouraging circular migration can introduce flexibility into the labor market — during both economic booms and busts.45 While about one immigrant departed for every three admitted between 1908 and 1957. it is widely accepted that the emigration rate of the foreign born did increase significantly during the Great Depression. may encourage new immigration flows or.42 (By contrast. Return migration flows generally correspond more with developments in the country of origin. and with the ease of circulation. Ireland. at least.47 Currency fluctuations. arrivals outpace departures by large margins. Accordingly. over half a million immigrants left the United States. return migration became the dominant flow (relative to out-migration) only as the countries made the transition from developing to developed economies. This.48 Hence. social.43 While those concerns are valid. and changing economic conditions in receiving countries may temporarily influence these trends. than with economic conditions in immigrant-receiving countries. Portugal. in turn. and Poland suggest that when job opportunities disappear in the country of destination. Where the development gap between countries remains large — such as between the United States and China (until very recently). or both. and Spain — suggest that return migration correlates more to economic. The ease of circulation and the strength of attachments that migrants maintain with their countries of origin are also important variables that influence return migration. greater outflows. The size of the foreign-born population in the United States is dynamic and characterized by regular population churn: New immigrants constantly arrive while some existing immigrants constantly depart. and the Indian rupee fell 25 percent against the US dollar. historical examples — such as Greece. India. The Immigration and Naturalization Service (INS) tracked departing foreign-born immigrants between 1908 and 1957. Recent evidence from migration flows between the United Kingdom. or for retirement. for investment or entrepreneurial activities.46 In these countries. enforcement regimes. but that could change during economic crises. and political developments in the country of origin than to the job market in destination countries. 13 . but such changes will likely prove to be short-lived absent broader changes — either in destination-country immigration policies or in economic conditions in origin countries.44 Between 1928 and 1937. Ireland. although it is not clear if they returned to their home countries or settled elsewhere. Estimating foreign-born emigration from the United States is notoriously difficult. having the guaranteed right to return encourages circular movements especially when the job market in the country of origin is strong. fewer outflows as migrants who were contemplating return decide to remain in the United States. the observed slowdown in the growth of the foreign-born population could be the result of slowing inflows. the Chinese yuan has appreciated by about 7 percent over the same period. but abandoned this practice due to concerns about the quality of the data. and Mexico — return migration is typically seasonal.) These changes make dollar-denominated income increasingly valuable for the families of migrants in the United States.

suffer disproportionately during economic downturns. have less formal education.53 and. nonwhites. Immigrants share many of the demographic and socioeconomic characteristics of these particularly vulnerable workers during recessions. and work experience prior to immigration to the United States) and because the sectors in which they are employed tend to suffer early and heavy job losses during economic downturns. higher-skilled workers may move down the skill chain (preferring skill underutilization or underemployment to unemployment). In the US labor market. and recent labor market entrants are most vulnerable to fluctuations in the business cycle and experience much higher job losses during recessions.4 percent) of immigrants from Mexico and Central America51 have less than a high school education — and are disproportionately employed in the low-value added jobs that are most vulnerable during recessions. immigrants from some Latin American countries tend to have relatively low educational attainment — nearly half (49. In addition.52 Evidence from recent recessions confirms that Hispanic immigrants are especially vulnerable to labor market conditions during recessions. Many immigrants share the demographic and socioeconomic profiles of the most vulnerable workers and.49 Workers without a high school diploma had job loss rates about twice the rate of workers with a college degree or more in all years between 1981 and 1995 and job losses for workers with less than a high school degree peaked during the 1981 and 1990 recessions.V.54 14 . Studies show that Hispanic workers suffered more job losses than non-Hispanic workers during the 1991 recession. How do immigrants fare in the US labor market during recessions? Recessions affect all workers. the likelihood of a new Hispanic immigrant finding work was lower than the likelihood of that immigrant remaining unemployed.50 Employers are simply more willing to shed employees with low marginal productivity or with relatively little specialized training. On average. and many from the Caribbean and the rest of Latin America — are more vulnerable than other workers during recessions both because of their human capital characteristics (including language. displacing lower-skilled workers. These factors put immigrants at greater relative risk of job loss during recessions. as a result. immigrants from Mexico and Central America are younger and less educated than the overall foreign-born population and are therefore even more vulnerable. education. and tend to be more concentrated than natives in several low-skilled sectors that are particularly vulnerable to fluctuations of the business cycle (see Table A and Figure 5). Research consistently shows that less-skilled workers. Central America. Immigrants are on average younger. younger workers. during the 2001 recession. tend to have less US-specific work experience. Immigrants — especially those from Mexico. but some workers suffer more than others.

3% 2.446 8.2% 1.8% Financial activities 6.8% 12.3% 34.7% 55 to 64 14.4% 4.325 6.052 6.8% 14.432 2.5% 35 to 44 22. Nicaragua. 31.4% 11.9% 0. March 2008.516.5% 10.7% Since 2000 .422.9% 11.7% 58.4% 15.615. forestry.4% 27.7% 18.6% 8.9% 25 to 34 21.1% 4.3% 4.5% 0. and Panama.1% 28.635 5.749.4% 33.1% 0.2% 21.6% 28. “Mexico and Central America” includes Belize.3% 29.6% 0.2% 12.8% 2.582.5% 22.0% 1.0% 3.and Foreign-born Workers in the Civilian Labor Force.1% 26.536.1% 0.7% 6.7% fishing. 22.7% 2.7% 27.5% 2.884. .1% 27.1% 3. Mexico.6% 0. 6. . El Salvador.4% school High school diploma 31.3% 26.669 60.7% 21.961.7% 12.5% 13.0% 1. .3% 4.5% 1.726.3% 8.2% 23.Table A.7% 49.8% 2.609 Agriculture.2% 16.9% 6.8% 24.4% 32.286.2% 35.928.442 13.4% 1980 to 1989 .844 9. 28.3% 11.1% 23.5% 12.0% 12.447 52.3% 1.9% 22.9% 11.0% 1990 to 1999 .4% 45 to 54 23.8% 17.2% 2.2% Industry* 66.9% 10.5% 9.9% 10.0% 23. 2008 Foreign born from Mexico Native born Foreign born and Central America Male Female Male Female Male Female Age* 66.321 13.536.7% 20.4% 32.1% 32.344.052 6.0% 0.1% Education** 57.1% 3. 10.2% 12.603 Before 1970 .9% 12.0% 10.7% 3.8% 6.1% 20.919 9.1% 1.536.0% 6.0% 1.388.3% 8.5% 8.5% 65 and older 4.1% 3.4% 9. .0% 6.9% 2.6% 4.7% 3.5% 20.943 12.077 2.3% 13.6% 30.9% 15.5% 0.4% 6. Honduras. Demographic and Labor Force Characteristics of Native.919 9. Socioeconomic Supplement.0% retail trade Transportation and 8.4% 13.800 2.2% 13.9% 25.478.3% 0.6% 12.1% 32.9% 23. 15 .6% Professional degree 11.1% 13.1% 13.2% 32.539 2.9% Professional and 11.0% 8.916. .4% 9.0% 1.6% 12.319 Less than high 6.5% 2. Current Population Survey.1% Construction 12.3% Notes: Includes workers in the civilian labor force.901 18 to 24 13.816 60.3% hospitality Other services 4.5% 4.9% 1.1% health services Leisure and 7.0% 23.0% 2.3% 31.1% utilities Information 2.0% 3. Source: Migration Policy Institute analysis of US Census Bureau.3% 8.3% 11.0% 7.6% 2. 2. .405. * Workers age 18 and older.6% 1970 to 1979 .0% 7. Costa Rica.7% 4.2% 27.9% 24.6% or GED Some college or 28. ** Workers age 25 and older.2% 21.961.6% administration Year of immigration* .6% Wholesale and 15.687.600.8% 20.8% 25.2% Associate's degree Bachelor's degree 22.1% Manufacturing 14.9% 28. Guatemala. and hunting Mining 0.5% 11.0% 14.2% 4.893.7% 4.0% 19.4% 10.2% business services Educational and 10. 13.5% Public 5.

2008 Immigrant workers are on average younger than natives… They are also more likely to be less educated…** Native born 3.0% 11% 6% 7% 0.0% 15 19 23 27 31 35 39 43 47 51 55 59 63 67 71 75 79 Less than high High school Some college or Bachelor's degree Age school graduate or GED Associate's degree or higher And tend to work in different sectors than natives…* A large share of immigrants are recent entrants to the US labor market. 12% 79.5% 56% Native born Foreign born Foreign born 3.0% 30% 30% 27% 27% 25% 1.) (Year of immigration of the foreign born. 24% 1970- 79.and Foreign-born Workers in the Civilian Labor Force. 10% 29% 5% Before Before 0% 1970. Socio-economic Supplement. and Panama.0% Foreign born from Mexico and Central America Percent of civilian labor force Foreign born from Mexico 2. El Salvador.5% 0. March 2008. 10% Includes workers in the civilian labor force.) 25% Native born Foreign born Foreign born Foreign born from 20% Foreign born from Mexico and Central America Mexico and Central America 1990- 1990- 15% 99. ** Workers age 25 and older.5% 16% 1. Source: Migration Policy Institute analysis of US Census Bureau. Since 26% 2000. 16 . “Mexico and Central America” includes Belize. 1970. Costa Rica. Guatemala.Figure 5. Honduras.5% and Central America 35% 32% 2. Demographic and Labor Force Characteristics of Native. 7% Manufacturing Construction Leisure and Educational Financial and business Wholesale activities 4% Professional and health and retail hospitality 1980- services 1980- services trade 89. 31% Since 99.and foreign-born in leading industries. 24% 1970. Current Population Survey. Nicaragua. * Workers age 18 and older. 33% 2000. 89. Mexico.* (Distribution of native.

manufacturing. Between the third quarter of 2007 and the third quarter of 2008. The foreign born are also nearly one-quarter of construction and administrative and support workers. and hospitality services that have suffered the heaviest job losses during this recession.3 percent over the same period. but less strongly in agriculture and extractive industries such as oil and gas. and tourism industries. Specifically. Not all sectors (and occupations) suffer uniformly during recessions. they represent a higher share of workers in several industries that experienced the largest job losses between November 2007 and November 2008.5 to 6. The Pew Hispanic Center also found that year-to-year median real income of all noncitizen households fell between 2001 and 2003. has been well documented. construction. the unemployment rate rose from 5. A recent report by the Federal Reserve Board suggests that the slowdown nationally is being felt most strongly in the finance.55 The unemployment rate for Mexican immigrants rose from 4. the unemployment rate for foreign- born Hispanics increased from 4. Rakesh Kochhar of the Pew Hispanic Center estimates that nearly 250.56 Because.3 percent among all workers).6 percent among native-born Hispanics and an increase from 4. For recent Hispanic immigrants (those arriving since 2000). manufacturing.4 percent (compared with an increase from 7.3 to 6.The unemployment rate among Hispanic immigrants also increased dramatically during 2008. and then fell again in 2007. in 2007.0 percent.8 to 5. single-parent households. Nationally. .5 to 7. slackening energy demand (particularly for oil) and the consequent collapse in oil prices may dampen the employment outlook for the oil and gas industry. Most notably. and 43 percent of workers from Mexico and Central America.2 percent. While the foreign born are about 16 percent of the total non-farm labor force. households headed by noncitizens from Latin America. and that for Central American immigrants from 4. The 15 industries that shed the most jobs between November 2007 and November 2008 employed about 21 percent of native-born workers in 2007. which started in 2007. recent Hispanic immigrants are a large share of the total Hispanic population (about one-quarter of foreign-born Hispanics in the labor force in 2008 were recent immigrants) they are more vulnerable to losing their jobs.58 However.60 Kochhar attributes much of the recent rise in Hispanic immigrant unemployment to declines in construction industry employment.57 Immigrants are more concentrated than natives in the sectors that have suffered the most job losses over the past year. recent immigrants. the foreign born are over a quarter of all “accommodation” workers — the majority of whom are hotel workers. immigrants — and particularly immigrants from Mexico and Central America — are disproportionately employed in many of the industries such as construction. The impact on immigrants of the slowdown in the construction industry. these same 15 industries employed about 30 percent of foreign-born workers. non-financial services.1 to 9.5 to 7. and adults who worked in production occupations experienced the largest declines in median real income. and just over one-fifth of furniture and related product manufacturing workers (see Figure 6). real estate. adults with less than a high school education. but immigrants disproportionately work in many of the sectors that have been most affected by the current recession.000 Hispanics lost jobs in the construction sector during 2007 and that most of these job losses were among Mexican immigrants.59 However.

184 70.1% 99 4.392 23.4% 872 14. Current Employment Statistics.8% Durable goods -108 -3.5% Building material and garden supply -55 -4.3% 118 7.3% 238 16.3% 114 15.6% 215 12. 2007 (foreign born employment).7% 62 4.1% 2. Native and Foreign Born Employment in Industries with the Largest Net Job Losses.6% 9.7% 487 78. MN: Minnesota Population Center [producer and distributor].8% 1.945 16. 2007 industry.0% Furniture and related products -62 -11.5% Truck transportation -59 -4. El Salvador.5% Motor vehicle and parts dealers -126 -6.4% 497 29.4% 84 14. and Panama.3% stores Wood products -63 -12.6% 4. 2007 to 2008 Foreign born from Change in Total Native born Total Foreign born Mexico and Central employment.4% activities Fabricated metal products -70 -4.8% 315 13.8% 1.870 -1. Matthew Sobek.0 [Machine-readable database].Figure 6.484 6.7% Transportation equipment -153 -9. Miriam King. Minneapolis.7% 51 3.550 76.0% Notes: Employment is seasonally adjusted (excluding construction).115 88.0% 109 4.2% Administrative and support services -532 -6. Industries are at the NAICS three-digit level (excluding construction).750 84.2% 1.2% 2.189 83.3% 23. 2007 Number Number Percent Number Percent Number Percent Industry Percent ('000) ('000) of total ('000) of total ('000) of total Total nonfarm -1.765 15.412 92. Honduras.2% 127 6.811 88.9% Accommodation -109 -5.6% 64 11.5% Credit intermediation and related -79 -2.3% 35 2.8% 2. Mexico. employment in employment in America employed 2007 to 2008 industry.7% 9.1% 137 21.9% 226 11. Guatemala.701 86.8% 614 84.222 85.7% 108 7.7% 58 8. Fitch.4% 127.7% 181 12. “Mexico and Central America” includes Belize.6% 1. Costa Rica.2% 107 4. Catherine A. Patricia Kelly Hall.4% 2. and Chad Ronnander.3% 210 14. 2008.628 88.292 77.746 22. 2007 in industry.2% 1.5% Clothing and clothing accessories -65 -4.3% stores General merchandise stores -53 -1.3% Construction -568 -7.4% 494 85. American Community Survey: Steven Ruggles.9% 90 14. November 2007 to November 2008 (change in total employment) and US Census Bureau. .6% 1.0% 287 12.5% 1.3% 107 3.6% Plastics and rubber products -43 -5. Ronald Goeken.3% 1.8% 1. Nicaragua. Integrated Public Use Microdata Series: Version 4.298 87.068 86. Trent Alexander. Sources: Migration Policy Institute analysis of Bureau of Labor Statistics.7% 333 11.8% 259 13. American Community Survey.

Since the implementation of the 1996 welfare law.63 Some states.61 Health care has also historically attracted large numbers of more highly skilled immigrants. This new fiscal reality in most states makes immigrants who lose their jobs particularly vulnerable regardless of whether a state has formally restored benefits to them or not.65 For low-skilled noncitizens without access to these public benefits. Temporary Assistance for Needy Families. Texas. and as noted.5 percent) of workers in agriculture. Florida. underemployment. food stamps. job losses during recessions are not uniform across the economy. a number of sectors reported large job gains — mainly health care. Given the uneven nature of the economic slowdown thus far. manufacturing. between industries and occupations than natives. Over the past year.66 Immigrants (especially the unauthorized) are more mobile geographically within the United States and. public policies may also make immigrants more likely to feel the effects of downturns much more deeply than other populations. hospitality and other low-wage. periodic or even just short-term unemployment can lead to greater economic hardship. Agriculture has long been a mainstay for immigrants — especially the unauthorized — and nearly one-quarter (22. one outcome could be a shift of immigrant employment from construction. forestry. such a shift is anecdotal and has yet to appear in official statistics. agriculture. For instance. Illinois. unauthorized immigrants are ineligible for unemployment insurance. which are important sources of support during periods of job loss.Nevertheless. public benefits permit many low-wage natives and naturalized citizens to survive periodic economic downturns by providing a stable source of emergency income. Many immigrants appear to adjust more quickly to labor market upheavals by changing their place of residence for work-related reasons or by changing jobs. low- value added personal service sectors back into agriculture — the reverse of the pattern observed during recent decades. Overall. and extractive industries. Public policies may increase immigrants’ hardship during economic downturns. such as cash welfare and food stamps.62 Returning to agricultural jobs would typically result in a decline in wages and working conditions for immigrant workers. and the foreign born appear to adjust more quickly to these shocks than natives. social services. and New Jersey have restored state-based coverage to these recent legal immigrants64 although collapsing tax revenues have spread the economic pain throughout the country and state governments are scrambling to cover ever-widening deficits. many legal immigrants who are not citizens and have been in the United States for less than five years are excluded from access to major federal public benefit programs. Evidence from the last 50 years suggests that most labor market adjustments to employment shocks are the result of labor mobility rather than business location decisions. or other economic hardship. While 20 percent of noncitizens reported having changed residence over . education. Beyond demographic and labor force characteristics. the Earned Income Tax Credit. At present. Except for a specified group of emergency services. to a lesser degree. including California. and fishing and hunting are foreign born. and Medicaid. unauthorized immigrants are generally ineligible for federal benefits and services. New York. known as the Personal Responsibility and Work Opportunity Act (PRWORA).

Illinois. Some of the highest unemployment rates as of November 2008 were in states with large and/or recently arrived immigrant populations. Georgia (+3. the jobless rates may be rising due to the recent collapse of food and energy prices and the increasing difficulty in obtaining the financing needed for energy extraction and further exploration. If current economic trends persist. between November 2007 and November 2008. However. Florida. with increased immigration into these states. immigration flows — both legal and illegal — respond to varying degrees to the conditions of the labor market. the relationship is complex. 28 percent of noncitizens report changing residence for job-related reasons compared to 19 percent of natives and 20 percent of naturalized citizens. As the US labor market tightens and competition for jobs increases. among movers. illegal immigration flows appear to be much more responsive to labor market fluctuations. All of these states have relatively small foreign-born populations — the number of foreign born does not exceed 8 percent of the total state population in any of them. Nebraska.68 Moreover. compared to 13 percent nationwide. in part because many unauthorized immigrants tend to fill the demand for work not met by the legal immigration system and other US workers. and (c) the relatively small share of legal immigrants admitted directly for employment. North Carolina. the unemployment rate has remained relatively stable (less than 1 percent change between November 2007 and November 2008) in agricultural states or states with large oil and gas industries in the interior of the country. only 13 percent of natives and 8 percent of naturalized citizens have done so. South Dakota. surprisingly little research has focused on the relationship between economic downturns and immigration flows. 20 . including California. Georgia. Nor do job losses and unemployment rates alone tell the full story of what happens to immigrants and how immigrants adapt to bad economic times. unauthorized immigrants have introduced flexibility into the US labor market by providing a ready pool of highly mobile workers during expansions who often returned to their countries of origin (most often in Mexico and Central America) when the US labor market tightened. Overall. the unemployment rate grew most rapidly in many recent immigrant destinations including. including Iowa. New Hampshire. Kansas.the previous year. one might expect that to change. they may also adjust more quickly to labor market upheavals. Nevada (+2.2 percent). Utah. However. (b) pent-up demand for employer-sponsored visas.9 percent). the current recession has had uneven impacts on different regions of the country. By contrast. VI. Nevada. Historically.67 Thus. and South Carolina.0 percent). legal immigration flows are slow to respond to economic reversals because of: (a) the different responses to labor market conditions by status adjusters versus newly arriving immigrants. while immigrants may face higher job losses during recessions. Like all recessions. This may be the result of the relatively short duration of the last two recessions and the unprecedented period of strong economic growth over the past quarter century. and North Carolina (+3. and Wisconsin. In general. the demand for new workers will decline. By contrast. Policy Challenges and Implications Although some studies have examined how immigrants fare in the US labor market during economic downturns.

Much tighter border enforcement (which has made back- and-forth movement increasingly difficult. and recent labor market entrants are more vulnerable to unemployment during recessions than better educated. economic conditions show consistent improvement in origin countries (which appears unrealistic in the near term). and costly). The United States and other advanced economies have a panoply of public. the questions that we need to continue to seek answers to include the following:  How will immigrants of different status adjust to the labor market shocks?  Are better educated and skilled immigrants (and natives) more likely to take jobs that underutilize and otherwise discount their skills during a recession? And if they do. recently arrived legal immigrants and unauthorized immigrants are generally ineligible for public support limiting their ability to pursue non-labor force activities during recessions. Typically. and potential leavers are guaranteed that they would be allowed to return to the United States when economic conditions change. immigrants are typically able (or compelled by circumstances) to move in search of better opportunities.However. one would expect more mobility — and responsiveness to labor market upheavals — among these groups. high labor-force attachment among unauthorized immigrants. Nonetheless. or accepting substandard wages and working conditions. and immigrants’ relatively high occupational and geographic mobility within the United States suggest that above-normal return migration is unlikely unless the US economic downturn turns out to be particularly prolonged or severe. Immigrants from Mexico and Central America (and especially unauthorized immigrants from these countries) share these characteristics to a greater extent than other immigrants or native-born workers. Family obligations (such as the need to continue to send remittances to relatives in the country of origin) and a lack of access to the federal social safety net often force immigrant workers to go to extraordinary lengths to remain employed or find new employment quickly — even if it implies relocating.and private-sector tools and the financial wherewithal that were not available in the late 1930s. Unlike native-born workers and naturalized citizens. Since not all sectors or all regions of the country suffer uniformly during recessions. The latter two conditions are thought to have been instrumental in the large-scale return migration of Poles and certain other Eastern Europeans when the British and Irish economies slowed dramatically beginning in late 2007. young workers. While such flexibility and determination may be commendable. low-skilled workers. the most vulnerable may experience economic pain quite similarly. established older workers. will they crowd the less prepared out of the labor force and with what human implications? 21 . such as continuing their education. This analysis leaves many unanswered questions. in large part because there is relatively little systematic empirical work about how immigrants respond to business-cycle fluctuations. As a result. In many ways it is inappropriate to compare the current crisis with the Great Depression. this may not longer be the case. and because the United States faces a recession whose likely depth we have not experienced since the Great Depression. taking jobs that do not fully utilize their skills. The absence of these two conditions is thought to be at the heart of Spain’s inability to persuade its hundreds of thousands of unemployed immigrants to return to their countries of origin despite financial incentives to do so. dangerous. Given this reality. they may have troubling consequences — including putting downward pressure on the wages and working conditions of others who work side-by-side with them (or even across firms) and contributing to the growth in the underground economy.

 How will low-skilled native-born workers (including African Americans) fare in an extended and deep recession relative to low-skilled immigrant workers?  If the economic crisis spreads and is felt with similar intensity across societies with well- established and complex migration relationships. the United States needs an immigration system that better serves US economic and social interests regardless of economic fluctuations. However.. for example. its interior enforcement operations against illegal immigration if the recession cuts deeper and lasts longer than many expect? What will be the political pressures and counter-pressures on the Obama administration on this issue and how will it react?  Will legal immigrants who arrive and enter the labor market during the recession suffer from a long-term penalty. on people and their families. how will migration flows respond? Will fewer immigrants come due to diminished job prospects in the United States? Will many immigrants return out of desperation? Or. and the unique nature of all recessions make any program of specific policy recommendations premature. lower wages for a sustained period of time in the future? Nor are these the only set of questions we will need answers to.g. border. Among the questions that should be considered are the following:  Should there be a formula for reducing certain kinds of immigration during times of economic contraction? How would such a policy work given the administrative delays inherent in the immigration process and the unpredictability of the economic cycle?  Are labor market tests effective mechanisms for adjusting worker inflows to changing levels of demand — a question that a prolonged recession will certainly put to the test — and are the tests that have been on the books since the 1950s up to the task?  Will changing the skill mix of legal admissions — for instance.69 The standing commission would make regular recommendations to Congress and to the 22 . such as between the United States and Mexico and much of Central America. education. An additional set of questions must focus on whether the recession (and how key actors respond to it) will provide impetus to and inform a badly needed conversation about an immigration system that serves Americans’ and America’s interests best. or even intensify. more than ever. An essential first step toward developing practical. other interior) are most sensible during periods of economic decline? And what economic consequences do different enforcement strategies have — for example. what types of enforcement strategies (e.. the current economic crisis brings into stark relief the relative inflexibility of the US immigration system in comparison to the highly dynamic and constantly evolving global economy. training. worksite. including during economic downturns?  What type of workforce development (i. policy-oriented responses to the questions raised in this paper would be to establish a Standing Commission on Immigration and Labor Markets — as proposed by the Migration Policy Institute’s Independent Task Force on Immigration and America’s Future. Now. will more people decide to migrate as economic conditions at home continue to deteriorate?  Will the United States continue. by giving greater preference to immigrants with more formal education or specialized skills in growing economic sectors and areas— serve US interests better overall. and on a state or locality’s competitiveness? The rapidly changing character and magnitude of the economic crisis.e. its unanticipated contagion around the globe. and job linkage) policies might best help ameliorate the impact of economic downturns on the most vulnerable workers regardless of their birthplace?  Finally.

While a severe economic downturn may not immediately appear to be the most opportune moment to address the chronic disconnect between the US immigration system and its labor market. employment and unemployment patterns.administration for adjusting admissions levels based on labor markets needs. and changing economic and demographic trends. 23 . farsighted policymakers will recognize that the crisis may provide impetus toward creating a more nimble and thoughtful immigration system — one that is both more consistent with our values as a nation and serves better and more consistently US economic interests.

Similarly. Mexico. 8 Estimates are based on a three-month moving average of the foreign-born population entering the United States since 1990 for each regional-origin group. Demographers estimate that the ACS and other official surveys may undercount the unauthorized immigrant population by as much as 10 percent. November 24. normally visible in real gross domestic product (GDP). Honduras.Endnotes 1 The National Bureau of Economic Research (NBER) is the official body responsible for deciding when the US economy has entered a recession. “Recent Trends in Undocumented Migration. 2008).” (presentation at the Migration Policy Institute. industrial production. and Panama. They include only immigrants arriving through legal channels. (See also footnote 5 above. in addition to potential undercounts. the US government’s fiscal year ran from July 1 of the year prior to the year listed to June 30 of the year listed. Passel. 6 Includes foreign born from Belize. and wholesale- retail sales. Mexico. El Salvador.” (Comunicado Núm. 2008). real income. The November 2008 estimate is based only on the average of the October and November 2008 estimates. 5 Estimates are based on a three-month moving average (the estimate for the current month. As a result. and so these figures may be slight underestimates (see also footnotes 19 and 23 below). but the data are released for each individual month. 3 The American Community Survey (ACS) is administered monthly. lasting more than a few months. Prior to 1976. the Current Population Survey (CPS) is administered monthly. Guatemala. the January 2000 estimate averages only January and February 2000 estimates since person weights calibrated to the 2000 Census are not available for years prior to 2000. Aguascalientes. and the subsequent month).) 9 Migration trends from and to Mexico display seasonal fluctuations with outflows peaking in the spring and inflows peaking in the fall of each year. November 20. Thus it is difficult to tell at this point whether the monthly figures for 2008 represent just a slowdown in the growth of the foreign-born population or an actual decline (see also footnotes 19 and 23 below). 10 Instituto Nacional de Estadística. The 2006 and 2007 figures cited here represent averages across all 12 months in each year. the previous month. Nicaragua. Jeffrey S. US government fiscal years have run from October 1 of the year prior to the listed year to September 30 of the listed year. “Ejercicio estadístico del INEGI confirma el descenso en la salida de Mexicanos al Extranjero. 240/08. NBER defines a recession as a “significant decline in economic activity spread across the economy. The CPS sample size is much smaller than the ACS. and data are released annually. Geografía e Informática. 11 The lawful permanent resident (LPR) category includes refugees and successful asylum seekers who have been in the United States for more than a year and have completed their permanent residency applications. there is also a wider margin of error on the CPS monthly estimates of the foreign-born. Since 1976.” 2 Throughout this paper we use the terms “immigrant” and “foreign born” interchangeably. employment. Washington. 4 Like the ACS. . Costa Rica. 7 Flow data are derived from administrative records collected by the US Department of Homeland Security (and its predecessor agencies) and correspond to fiscal years rather than calendar years. DC.

2006). 19 There are two types of labor market tests: labor certification and labor attestation. and to their supporting personnel. Based on Yearbook of Immigration Statistics 2007 (Washington. other special immigrants (such as religious workers. See for example Demetrios G. 17 Jeffrey S. individuals who have had a removal notice canceled. Nicaraguan Adjustment and Central American Relief Act entrants. 14 Other categories of employment-sponsored visas were current. Available at http://www. 18944-18956. Malone. education. Visa Bulletin IX. outstanding professors or researchers. requires that employers conduct an affirmative search for available US workers and can demonstrate to the US Department of Labor that admitting the foreign worker will not adversely affect the wages and working conditions of similarly employed US workers. or extraordinary achievements in the motion picture and television field. DC: Department of Homeland Security. In addition. and their families).state. Passel. 2008). no. 13 Douglas S. DC: Carnegie Endowment for International Peace. including visas for priority workers (mostly workers with extraordinary abilities. 25 . January 2006).pdf. and investors and their families. “Temporary Worker Programs: A Patchwork Policy Response. March 7. Labor attestation. Jorge Durand. 1996). TN visas are granted to professional workers from North American Free Trade Agreement (NAFTA) countries (Canada and Mexico).html. Available at http://travel. “The Potential of Temporary Migration Programmes in Future International Migration Policy.” International Labour Review 145. requires that employers attest in an application to the US Department of Labor that the employer will pay the foreign worker the greater of the actual wages paid other workers in the same job or the prevailing wages for that occupation. Migration Policy Institute. Labor attestation is typically less onerous for employers than labor certification. Finally. 16 Annual average employment-sponsored legal permanent immigration for 1998 to 2007. Deborah Waller Meyers. Beyond Smoke and Mirrors: Mexican Immigration in an Era of Economic Integration (New York: Russell Sage Foundation. Labor certification. which is required for H-2A and H-2B workers. and Nolan J. and Haitian Refugee Immigration Fairness Act entrants.migrationpolicy. arts. The Size and Characteristics of the Unauthorized Migrant Population in the US ( 2008). Washington DC. pp. the employer must provide working conditions for the foreign worker that do not cause other workers’ working conditions to be adversely affected and the employer must attest that there is no strike or lockout whose outcome might be affected by the employment of the foreign workers. targeted categories include parolees. which is required for H-1 and certain other workers. 4 (January 2009). children born abroad to alien residents. 2002): 34. and Martin Ruhs. Office of Immigration Statistics. no. employees of the US government born abroad and employees of international organizations. 18 O visas are granted to persons who have extraordinary ability in the sciences.12 “Extending Period of Optional Practical Training by 17 Months for F-1 Nonimmigrant Students With STEM Degrees and Expanding Cap-Gap Relief for All F-1 Students with Pending H-1B Petitions. Papademetriou and Stephen Yale-Loehr. US Department of State. business. the firm must provide a copy of the application to representatives of the bargaining unit or — if there is no bargaining representative — must post the application in a conspicuous location at the worksite. 15 Smaller. or multinational executives or managers and their families).” (Independent Task Force on Immigration and America’s Future Insight No. 1-2 (2006): 7-36. or athletics. Balancing Interests: Rethinking the US Selection of Skilled Immigrants (Washington. Massey. DC: Pew Hispanic Center. 20 Analysts have long questioned the effectiveness of the labor certification process.” 73 Federal Register 68 (April 8.

1. Elena Zúñiga Herrera. January 12. June 2008). 31 Wayne A. Karina Fortuny. Federal Reserve Bank of Dallas. and (2) apprehension data may better reflect Border Patrol resources dedicated to preventing entry rather than attempted crossings. and Michael E. “The Shifting Expectations of Free Trade and Migration. limited sample sizes. 32 Theories explaining why people migrate include neoclassical economic theory. March 2001). DF: Consejo Nacional de Población. “Immigration and Child and Family Policy.” (Council on Foreign Relations. 2004). which posits that international migration stems from geographic differences in the supply and demand for labor. DC: Pew Hispanic Center. which may further bias the end result. Does Immigration Grease the Wheels of the Labor Market (Brookings Papers on Economic Activity. 22 Randy Capps. fail to capture fully the extent of such immigration since individuals are counted as many times as they are caught and do not include unauthorized migrants who succeed at entering the United States without getting caught. 30 Unpublished data courtesy of Pia Orrenius. “Controlling ‘Unwanted’ Immigration: Lessons from the United States. “Controlling Unauthorized Immigration from Mexico: The Failure of ‘Prevention through Deterrence’ and the Need for Comprehensive Reform. 27 Jeffrey S. Thus the decline shown in the report for 2007-08 may in fact reflect more of a slowdown in the rate of growth. 2006). October 2. 2003). moreover. 4 (July 2005): 775-794. See George J. Massey. Beyond Smoke and Mirrors: Mexican Immigration in an Era of Economic Integration (New York: Russell Sage Foundation. and Douglas S.21 See for example Gordon Hanson. Fix. 28 Ibid. Demetrios Papademetriou. and the imprecision of assigning legal status to noncitizens in the data. and Luis Acevedo Prieto. adjustments of the weighting scheme in some years. “The Economic Logic of Illegal Immigration. Paula Leite Neves.. On the other hand. Smaller-scale surveys may be influenced by trends at the microeconomic level and are not necessarily reflective of the overall US economy or population. and 26 . which are often used as a proxy measure for trends in illegal immigration. 26. Passel and D’Vera Cohn. These are due to potential undercounts of the unauthorized population. Mexico-United States Migration: Regional and State Overview (Mexico. data on border apprehensions. 25 Large official surveys such as the CPS have substantial sampling errors and may undercount unauthorized immigrants. Trends in Unauthorized Immigration: Undocumented Inflow Now Trails Legal Inflow (Washington. Trends in the Low-Wage Immigrant Labor Force.” (Washington. DC: Carnegie Endowment for International Peace. 23 Wayne Cornelius. DC: Immigration Policy Center Briefing paper. 2008). 24 Jorge Durand. Cornelius et al.” NAFTA’s Promise and Reality: Lessons from Mexico for the Hemisphere (Washington. 2006). Borjas. Economist George Borjas makes this argument with respect to newly arrived immigrants who disproportionately tend to be unauthorized. Malone. 2007). no. analysts must make assumptions in assigning legal status to noncitizens.” (paper prepared for the Urban Institute and Child Trends Roundtable on Children in Low-Income Families. DC: The Urban Institute. Council Special Report No. 2000-2005 (Washington. April 2007). Other factors also influence how apprehensions data are interpreted in two important ways: (1) highly publicized enforcement efforts may deter potential unauthorized migrants from attempting to cross the border. 29 There are significant margins of error around the estimates in the US Current Population Survey data employed by the Pew Hispanic Center in Passel and Cohn (2008). Nolan J. 26 Randy Capps and Karina Fortuny. 1993- 2004” Journal of Ethnic and Migration Studies 31. thus skewing any observed relationship between illegal crossings and the US economy. No.

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Job-related reasons include a new job or job transfer.release/pdf/laus. Woodbury.” (Brookings Papers on Economic Activity.64 Michael Fix and Jeffrey Passel. The Urban Institute. 2008). Current Population Survey. 65 David M. 29 . “The Scope and Impact of Welfare Reform’s Immigrant Provisions. Available at http://www. Deborah W. DC: Migration Policy Institute. Papademetriou. March 2008. January 2002). December 1999). December 19. 2006). Bureau of Labor Statistics. or other job-related reasons. and Michael Fix. Smith and Stephen A.” (USDL 08-1830. prepared by the Urban Institute. “Regional and State Employment and Unemployment: November 2008. to look for work for due to a lost job. 67 US Census” (Assessing the New Federalism Discussion Paper 02-03. Katz. The Low-Wage Labor Market: Challenges and Opportunities for Economic Self-Sufficiency (Report to the Assistant Secretary for Planning and Evaluation. Washington DC. 69 See Doris Meissner.bls. Meyers. Social and Economic Supplement. Immigration and America’s Future: A New Chapter (Washington.pdf. Demetrios G. 68 US Department of Labor. 1: 1992). “Regional Evolutions. 66 Olivier Jean Blanchard and Lawrence F. US Department of Health and Human Services.

forthcoming). Duke. senior editor and co-author. Papademetriou has published more than 200 books. co-author). Papademetriou Demetrios G. and Canada. editor and author). Dr. He holds a PhD in Comparative Public Policy and International Relations (1976) and has taught at the universities of Maryland. American. and the Co-Founder and International Chair Emeritus of Metropolis: An International Forum for Research and Policy on Migration and Cities. articles. Director for Immigration Policy and Research at the US Department of Labor and Chair of the Secretary of Labor’s Immigration Policy Task Force. the Transatlantic Task Force on Immigration and Integration (co-convened with the Bertelsmann Stiftung). a task force of mostly European senior immigration experts that advises EU Member States on immigration and asylum issues. co-author). Secure Borders. co-author). co- author). The Council is composed of senior public figures. and Caught in the Middle: Border Communities in an Era of Globalization (2001. Papademetriou also convenes the Athens Migration Policy Initiative (AMPI). America’s Challenge: Domestic Security.) 30 . Immigration and America’s Future: A New Chapter (2006. NAFTA’s Promise and Reality (2003. and public intellectuals from Europe. and National Unity after September 11 (2003. a Washington-based think tank dedicated exclusively to the study of international migration. Papademetriou is President of the Migration Policy Institute (MPI). Open Doors: Visa Procedures in the Post-September 11 Era (2005. Civil Liberties. and Executive Editor of the International Migration Review. and research reports on migration topics and advises senior government and political party officials in more than 20 countries. business leaders. and New School for Social Research. the United States. monographs. Gaining from Migration: Towards a New Mobility System. His most recent books include Still a Study in Ambiguity: Germany and its Immigrants (co-author. 2007).About the Authors Demetrios G. He is also the convener of the Transatlantic Council on Migration and its predecessor. Europe and its Immigrants in the 21st Century: A New Deal or a Continuing Dialogue of the Deaf? (2006. He has held a wide range of senior positions that include Chair of the Migration Committee of the Paris-based Organization for Economic Cooperation and Development. OECD Development Center (co-author. Dr.

Hometown Associations: An Untapped Resource for Immigrant Integration? (co-author). where he focuses on US immigrant integration policy and migration and development issues. He holds a BS with honors from the Edmund Walsh School of Foreign Service at Georgetown University where he majored in International Affairs and earned a certificate in Latin American studies. Learning by Doing: Experiences of Circular Migration (co- author). 31 . His recent publications include Los Angeles on the Leading Edge: Immigrant Integration Indicators and Their Policy Implications (co-author). He has also studied at the Institut d’Etudes Politiques (Sciences Po) in Paris.Aaron Terrazas Aaron Terrazas is a Research Assistant at the Migration Policy Institute. and Gambling on the Future: Managing the Education Challenges of Rapid Growth in Nevada (co-author).