Summary, February SGE Monthly Luncheon
Summary of Remarks by
Rakesh Kochar
"U.S. Immigration: Demographics and the Workplace"
By Mark Schroder
Dr. Kochhar presented materials from work by himself and by Jeffrey Passel, a colleague at Pew. Foreign-born residents of the United States numbered 37.5 million in 2006, of whom 17.7 million were Hispanic. This represents very rapid growth, as just 20 million residents were foreign-born in 1990, and just 31 million were foreign-born in 2000. Economic expansion in the U.S. is associated with accelerated immigration, both legal and illegal, to about one million per year.
The share of the foreign-born in the population is currently about one out of every eight residents, but that share varies greatly over time – it was one out of seven in 1910, when immigrants were mostly European, and one out of twenty in 1970.
In Passel’s mid-range projections, U.S. population rises from 296 million in 2005 to 438 million in 2050 – but only to 321 million if, somehow, there were zero immigration in between those dates. Of the 117 million net increase, the actual increase in the foreign-born is 67 million; the remaining 50 million reflect the immigrants’ descendants. In the mid-range projections, the share of whites falls from 67 percent of total population to 47 percent, the share of blacks is flat at 13 percent, while the share of Hispanics rises from 14 percent today to 29 percent in 2050.
The working-age population (18-64) would fall in the no-immigration simulation. With mid-range immigration projections, it would rise from 186 million to 255 million; the Hispanic share of the labor force would rise from 14 percent today (about half of them foreign-born) to 31 percent.
As workers, Hispanics are disproportionately young, less well educated, and concentrated in a few occupations. Hispanic workers, for example, account for 20 percent of all workers ages 25-34, but just seven percent of workers ages 55 and older. Hispanic workers make up 40 percent of all workers with less than high school education, and five percent of all workers with graduate degrees. By occupation, 37 percent of farm workers, 34 percent of cleaning and maintenance workers, 31 percent of construction workers and 21 percent of food service workers are Hispanic; but just 4 percent in life and social sciences, 5 percent in legal services, and 6 percent in healthcare occupations are Hispanic.
The impact of foreign-born workers on native-born workers is an unresolved controversy, turning on whether immigrants are substitutes or complements for native-born workers, whether native-born workers relocate away from areas of immigration, and whether immigrants attract investment. Dr. Kochhar did not feel the controversy was resolved at this point, but his view was that the composition of the foreign-born workforce was moving in ways that were not simply mirroring that of the native-born workforce. From 1996 to 2006, for example, the number of native-born workers with less than high-school education fell by 1.8 million, while the number of foreign-born workers with less than high school rose by 2.2 million. He felt models that assumed that foreign- and native-born workers were perfect substitutes were too simple.
In response to a question about the impact of immigration on the sustainability of Federal entitlement programs, Dr. Kochhar said the current dependency ratio of elderly persons to persons 18-64 was about 20 percent. A low-immigration projection for 2050 was 36 percent, and a high-immigration projection was 29 percent. Pew’s baseline projection was 32 percent. Thus, the cost of the entitlement programs to younger workers is certain to rise but is somewhat sensitive to the level of immigration.
Rakesh Kochhar has over fifteen years of research experience in the areas of labor economics and price and wage measurement and analysis. Prior to joining the Pew Hispanic Center, he was senior economist at Joel Popkin and Co., where he served as a consultant to government agencies, private firms, international agencies, and labor unions. Dr. Kochhar is a past president of the Society of Government Economists. His doctoral thesis at Brown University focused on the theory of labor migration.