The Employment, Unemployment and Unemployment Compensation Benefits of Immigrants

Abstract

This paper analyzes the employment and unemployment experiences of adult foreign-born men, both among themselves and in comparison with the native born. It is based on an econometric analysis of the microdata from the 1990 Census of Population.

The theoretical model focuses on the job search behavior of the foreign born within the context of an immigrant adjustment model based on the imperfect transferability of skills and labor market information acquired prior to immigration. In particular, the model focuses on the effects on employment and unemployment of schooling, labor market experience, marital status and the agricultural sector, in addition to immigrant-specific variables, such as duration of residence, naturalization (U.S. citizenship), English language fluency and country of origin.

Three dependent variables are analyzed, weeks worked (employed) in 1989, unemployed status in the reference week in 1990, and a proxy measure of unemployment compensation benefits received in 1989. As among the native born, among the foreign born employment is greater and unemployment is lower, for those with more schooling, total labor market experience and who are married. Unlike the pattern among the native born, employment is lower and unemployment is higher among the foreign born in the agricultural sector, who are primarily employees rather than self-employed farmers as are the native born.

Among the foreign born, employment is greater and unemployment is lower among naturalized citizens and those fluent in English. A non-linear pattern emerges for duration of residence. Employment is significantly lower and unemployment is significantly higher among the foreign born in the U.S. for three or fewer years, but then reaches a plateau with little variation by duration of residence. Among refugees from the former USSR, employment is particularly low and unemployment is particularly high in the initial three year period, reflecting their more difficult initial adjustment.

An algorithm is developed for a proxy measure of unemployment compensation benefits. The foreign born receive less unemployment compensation benefits in a year because of a much lower probability of receiving any benefits. Among recipients of benefits, the foreign born receive more dollars annually and a higher weekly benefit, other things being the same.

Unemployment problems associated with immigrants appear to be short-term transitional adjustments, not unlike those experienced by native-born new entrants and re-entrants to the labor market.

JEL Classification: J61, J65