Are foreigners taking the jobs of native-born Americans? The fear that foreigners are displacing domestic workers has long been feared, and remains one of the major economic objections to immigration. And recently there seems to be some evidence this is happening in the US, with almost all net job creation in the US in the past 5 years going to foreigners, while native-born employment has been flat.
But this is not evidence that foreigners are taking our jobs, as I explain in my latest piece for the Cato Institute. The reason is simple: the native-born, working-age population hasn’t been growing. If we looking at the employment-rate of native-born Americans, it is higher than it has ever been, and higher than for the foreign-born population:
You may have heard that there are roughly 7 million men of working age that are not currently in the labor force — that is, not currently working or looking for work. The statistic has been produced in various ways using slightly different definitions by different researchers, but the most well-known is from Nicholas Eberstadt who uses the age cohort of 25-55 years old and gets about 7 million (in 2015). More recently and perhaps more prominently is from Senator JD Vance, and as with almost all issues he has tied this to illegal immigration.
The 7-million-men statistic is true enough, and if we limit it to native-born American men with native-born parents (I assume this is the group Vance is concerned about), we can get right at 7 million non-working men in 2024 by expanding the age cohort slightly to 20-55 year olds.
Why are these men not working? According to what they report in the CPS ASEC, here are the reasons broken down by 5-year age cohort (I drop 55-year-olds here to keep the group sizes equal, which shrinks the total to 6.7 million men):
By far the largest reason given for not working is illness or disability, which is 42% of the total for all of these men, the largest reason for every age group except 20-24 (who are mostly in school if they aren’t working), and it’s the majority for workers ages 30-54 (about 56% of them report illness or disability). Slightly less than 10% report “could not find work” as the reason they weren’t working, which is about 650,000 men in this age group (and are native-born with native-born parents). And over half of those reporting that they couldn’t find work are under age 30 — for those ages 30-54, it’s only about 7% of the total.
More men report that they are taking care of the home/family (800,000) than report not being able to find work (650,000). And a lot more report that they are currently in school — almost 1.5 million, and even though they are mostly concentrated among 20–24-year-olds, about one-third of them are 25 or older.
It’s certainly true that the number of working age men in the labor force has fallen over time. In 1968, 97% of men ages 20-54 had worked at some point in the past 12 months (that’s for all men regardless of nativity, which isn’t available back that far in the CPS ASEC). In 2024, that was down to about 87%. But even if we could wave a magical wand and cure all of the men that are ill or disabled, this would add less than 3 million people to the labor force, not nearly enough to make up for all of the immigrants that Vance and others are suggesting have taken the jobs of native-born Americans.
The headlines often read with the criminal threats that illegal/undocumented immigrants pose to the US native population. The story usually includes a heart wrenching and tragic story about a native minor who was harmed by an immigrant and a politician to help propose a solution. There’s also usually a number cited for how many such crimes happened in the most recent year with data. Stories like this are designed to provoke feelings – not to provoke thinkings.
First, the tragic story is probably not representative. Even if it is, the citation of a raw count of crimes is not communicative in a helpful way. Sometimes politicians will say something like “one victim of a crime by an illegal immigrant is too many”. But that seems like a silly argument to make *if* immigrants reduce the probability of being a victim of a crime.
I argue that (1) immigrants who commit crimes at a lower probability than the native population cause the native population to be safer and, counterintuitively, (2) immigrants who commit crimes at a *higher* probability than the native population cause the native population to be safer.
Economists overwhelmingly favor looser immigration controls. Allowing people to immigrate would improve the allocation of scarce labor and capital and it is a far cheaper way to aid poorer families than sending direct payments or trying to develop an entire country. Let’s cover some static analysis basics for migrating workers and their dependents.
Workers, Labor Markets, & Output Markets
There are two markets to consider: The new home country and the old home country. If workers leave the old country in search of the higher wages in the new country, then world employment remains unchanged. Employment obviously rises in the new country and falls in the old country. With identical laborers (a terrible assumption that’s the least charitable to immigration), wages in the new country fall and wages in the old country rise. This logic illustrates the cheap aid of which economists are fond.
Last weekend fellow Temple University economics PhD Adam Ozimek hosted the inaugural #EconTwitterIRL conference. He managed to get 100+ people, including many big names, to come to his bowling alley / arcade in Lancaster, PA.
The overall demographic of Econ Twitter people appears to be youngish professionals, mostly male, surprisingly social and normal-looking (surprising to me because I retain the ’90s-era stereotype that people who write a lot online are nerds who don’t want to talk to anyone IRL).
Adam opened with a history of EconTwitter, which to him is not just about Twitter, but is anywhere where communities of people write about economics online. This starts with the comment sections of the earliest blogs, like Brad DeLong’s, in the early 2000’s. Then in the late 2000’s many commenters start their own blogs, like Karl Smith at Modeled Behavior. In the 2010’s Econ Twitter comes into its own. It may persist or a new forum might take over, but either way the discussion and community will live on.
While it was cool to see a live recording of Odd Lots, and a panel on innovation with MacArthur Genius Heidi Williams, my favorite panel was the one on immigration, because it saw the most serious disagreement. Garett Jones and Daniel Di Martino argued for reforms to the immigration system that would move it away from a focus on family reunification and toward a focus on skills and other indications (like country of origin) that immigrants would benefit the US economy. In contrast, Leah Boustan argued that the current system has worked well, including for assimilation and economic growth, and we should be wary of making big changes to it. Moderator Cardiff Garcia pointed out the oddity of the economists from George Mason and the Manhattan Institute arguing for a “socialist” system where the government determines what the economy needs when it comes to immigration, while the Princeton economist argues against. Garett Jones noted that the rest of his department at Mason disagree with him, but he’s glad to have the freedom to disagree.
While the panel saw intense disagreement about what the ideal system looks like, all panelists shared a frustration with parts of the current system that seem to pointlessly slow or prevent high-skill immigration. Some of this is bureaucracy slowing the process for immigrants who are legally allowed already. Some is politicians refusing to make the smallest, simplest, most common-sense fixes unless they are part of a comprehensive immigration reform that hits their big priority. The big priorities differ by party, but the commitment to holding simple fixes hostage is bipartisan.
Hopefully discussions like this can start to change things. That might sound naive or idealistic, but on an earlier panel Matt Yglesias noted that we should be both impressed and slightly scared of how aware Capitol Hill staffers are about the opinions of Econ Twitter.
Source. Got 2nd at trivia as part of team Acemoglu et al (actual Acemoglu not included).
The magic of all this is that you never know what can come from a post. You might make a friend, make an enemy, get a job, lose a job, influence public policy, get a job in the White House… even make (or lose) a million dollars. So we keep poasting, and once in a while see the results IRL.
Economist Writing Every Day 