Immigrant Workers Crowd Out U.S. Teens

The employment-population rate of teenagers has declined from 50 percent to 25 percent in a little more than 30 years. The teen labor force participation rate has declined by 40 percent. The teenage unemployment rate has drifted upward in this period, and of the teenagers who are currently in the labor force, one in four is jobless. Among the factors explaining these trends is immigration, legal and illegal.

Two recent studies provide convincing evidence that low-skilled immigrants cost U.S.-born teenagers jobs.

Federal Reserve Board economist Christopher L. Smith used Census Bureau data going back to 1970 to develop a model for calculating the impact of low-skilled immigration on youths. His study ("The Impact of Low-Skilled Immigration on the Youth Labor Market," available online at the Fed's website) shows that the employment of adult immigrants with little education has significantly reduced the employment rates of high-school age youths. Immigration-induced job loss has been greater for young people than for native-born adults, reflecting that youths tend to work in the same occupations and industries as low-skilled adult immigrants.

For the period of his study, Smith found that "a 10 percent increase in the number of immigrants with a high school degree or less is estimated to reduce the average total number of hours worked in a year by 3 to 3.5 percent for native teens." If the immigration of the less educated had been held at its 1990 level, the employment rates of U.S.-born teenagers 15 years later would, he calculated, have been about 6.5 percentage points higher for males and 7.1 points higher for females.

Young workers who are crowded out of the job market sometimes return to school. However, Smith's study found that despite this there is "little evidence that reduced employment rates are associated with higher earnings ten years later in life." The implication is that an influx of low-skilled immigrants may inhibit the accumulation of human capital in the U.S.-born work force.

Steven A. Camarota, Director of Research at the Center for Immigration Studies (CIS), and Karen Jensenius, a demographer at the Center, have explored a similar issue in a study, "A Drought of Summer Jobs: Immigration and the Long-Term Decline in Employment Among U.S.-Born Teenagers" (available online at the Center's website). They concluded that immigration accounted for a significant share of the decline in teen summer labor force participation between 1964 and 2007. Declines occurred among black, Hispanic, and white U.S.-born teenagers and among teens from both high and low income households. (During the latest recession, not surprisingly, the teenage job situation worsened.)

Looking at geographic data over time, Camarota and Jensenius found that in the ten states where the immigrant share of employment increased the most, the labor force participation of teenagers declined sharply, while in the ten states where the immigrant share rose the least, the drop in teenage participation was about half as much. Summer internships were found to be too few to account for the downtrend in teen labor force participation.

The authors also used state data to estimate two regression models, one at a point-in-time, the second examining changes over time. According to the first model, "a 10 percentage point increase in the immigrant share of the labor force reduces the labor force participation rate of U.S.-born teenagers by 5.79 percentage points in 1994-95 and 4.57 percentage points in 2006-07." In the second (change) model, the same increase in immigration resulted in a 7.6 percentage point reduction in the labor force participation rate of U.S.-born teenagers.

The CIS researchers, like the Federal Reserve's Smith, point to the human capital loss resulting from labor force displacement, noting that "those who do not hold jobs as teenagers often fail to develop the work habits necessary to function in the labor market, creating significant negative consequences for them later in life." We might add, negative consequences for the economy as well.

Why do some U.S. employers prefer immigrant labor over young native-born workers? In some cases low-skilled and low-educated immigrants are willing to accept lower wages and thus out-compete American teenagers. Immigrant workers tend to be older and have a stronger attachment to the work force, and if they are illegal they may be more exploitable. Many immigrants have developed an effective networking system that helps them readily locate available jobs. And as more immigrants are hired and become a majority in particular workplaces, often a language barrier is created that freezes out young American jobseekers.

What can be done to enable more teenagers to gain work experience? Constraining the immigration of unskilled and poorly educated immigrants is part of the solution. Making education work better for teens is another. If teenagers emerged from public schooling with the skills and attitudes to make them more desirable employees, they would be much better able to hold their own in competition with immigrants. And, it's worth speculating, if U.S.-born teenagers were more competitive in the job market, there might be less incentive for low-skilled workers to immigrate.

Steps need to be taken. We can't afford to relegate a generation of young Americans to a life of demeaning idleness and obsolescence.