Three of the Many Big Reasons to Love Immigrants

Let’s stop kicking around immigrants, and instead recognize that three big reasons exist to love immigrants when it comes to the U.S. economy. As the broad numbers show, immigrants have higher rates of labor force participation, employment and entrepreneurship than the native born.

As noted in the latest jobs report from the U.S. Bureau of Labor Statistics, among the total foreign-born civilian noninstitutional population, 65.3 percent were participating in the labor force (i.e., employed or seeking a job) in December 2017. That compared to 61.9 percent among the native born.

Broken out by gender, foreign-born males had a participation rate of 78.2 percent, compared to 66.7 percent among native-born men. However, among women, the native born had a labor force participation rate of 57.4 percent, while the foreign born participated at a rate of 53.4 percent.

Levels of employment followed suit. Among the total foreign born, the employment-population ratio came in at 62.8 percent in December, versus 59.4 percent among the native born. For men, the difference was an employment-population ratio of 75.4 percent for the foreign born and 63.8 percent for the native born, and among women, a ratio of 51.1 percent for the foreign born compared to 55.3 percent for the native born.

Key among the foreign born and the native born helping to explain some of these differences is age. For example, as the BLS has reported, “By age, the proportion of the foreign-born labor force made up of 25- to 54-year-olds (73.4 percent) was higher than for the native-born labor force (62.4 percent). Labor force participation is typically highest among persons in that age bracket.” Also, foreign-born mothers with younger children are far less likely to be in the labor force than are their native-born counterparts. For example, among mothers with children under the age of six, the labor force participation rate among the foreign born was only 49.5 percent compared to 69 percent for the native born.

Finally, the rate of entrepreneurship is significantly higher among immigrants compared to the native born. For example, looking at 2016 data, the Kauffman Foundation has reported: “The Rate of New Entrepreneurs among immigrants of 0.52 percent is substantially higher than that for the native-born of 0.26 percent… Immigrant entrepreneurs represent 30 percent of all new entrepreneurs in 2016, which is up substantially from 13 percent in 1996.”

Also, writing for the Harvard Business Review in October 2016, Sari Pakkala Kerr and William R. Kerr noted their research on immigration and entrepreneurship, examining data from 1995 to 2008. Among their key findings were: “Immigrants constitute 15% of the general U.S. workforce, but they account for around a quarter of U.S. entrepreneurs (which we define as the top three initial earners in a new business).” Also, “in total, 35%-40% of new firms have at least one immigrant entrepreneur connected to the firm’s creation.”

So, what we generally see with immigrants is a stronger penchant for participating in the labor force, for being employed, and for embracing entrepreneurship, compared to the native born. In simplest terms, entrepreneurs add to our economy by becoming workers and entrepreneurs, not to mention consumers as well. In the end, to be against immigration from an economics standpoint is to mistakenly believe that the economy is a zero-sum game, whereby if one person gains (such as an immigrant) somehow someone else (for example, a native-born individual) must lose. But that’s not how the economy works. Rather, economic, employment and income growth occur, and the complementary efforts performed by immigrants contribute to that growth process, with benefits accruing to both immigrants and the native born.