The Covid-19 pandemic and the subsequent large-scale economic shutdowns have resulted in massive increases in unemployment around the world. In December 2019, the unemployment rate in the US stood at a near-record low of 3.5% (a level not seen since the early 1950s). By April 2020, the unemployment rate had risen to 14.7%, a level not witnessed since the Great Depression of the 1930s.
Our analysis of data from the monthly US Current Population Survey (CPS) documents that job losses have been particularly severe among immigrants. Immigrant men were historically more likely to be employed than natives. In 2019, the immigrant employment rate was about 6 percentage points higher than that of natives. The economic impact of the Covid-19 pandemic on the immigrant population was so severe that the immigrant employment advantage not only disappeared, but was actually reversed. By April 2020, the employment rate of immigrant men was about 2 percentage points lower than that of native men.
The larger relative decline in immigrant employment was driven both by a greater increase in job losses and a larger drop in the rate at which workers found new jobs. The job loss rate was roughly the same for the two groups in early 2020: about 3–4% of the employed population lost their jobs each month. The job loss rate for immigrants, however, began to increase in March 2020 and shot up dramatically between March and April 2020. About 17% of natives who were employed in March lost their jobs; but 25% of immigrants employed in March lost theirs. There was also a sharp concurrent decline in the immigrant job-finding rate. The immigrant–native differences in these rates persist, and are largely unaltered, even after accounting for differences between immigrants and natives in their education, age, state of residence, and metropolitan status.
We categorized occupations by how amenable the jobs are to working remotely and found that workers who work in more “remotable” occupations—those that could be performed away from the usual workplace—were much less likely to suffer job losses. Immigrants, however, were far less likely to work in remotable occupations before the crisis. As a result, their jobs were more vulnerable when the pandemic hit and lock-downs were imposed. Part of the gap between the job losses of natives and immigrants (approximately 20–30% of the difference) can be explained by differences in the kinds of occupations that natives and immigrants work in.
The economic hardships from this pandemic have been widespread, but the employment losses have varied among demographic groups, with immigrants suffering greater job losses than natives. Whether or not this sharp change in the relative positions of native and immigrant men persists or instead the US labor market reverts to its historically greater employment rate of immigrants will be one of the most interesting developments as the crisis plays out.
© George J. Borjas and Hugh Cassidy
George J. Borjas is the Robert W. Scrivner Professor of Economics and Social Policy at the Harvard Kennedy School, USA
Hugh Cassidy is an Assistant Professor of Economics at Kansas State University, USA
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