Mexican Immigrant Employment Outcomes over the Business Cycle

Abstract

The United States is beginning to emerge from the deepest downturn the country has experienced since the Great Depression. As of October 2009, the number of unemployed persons had risen by 8.2 million since the “Great Recession” began in December 2007. All demographic groups have experienced job losses, but some groups have been more adversely affected than others. Repeating the pattern of most previous downturns, the recession’s impact has been worst for low education and minority workers. One group that has been particularly hard hit is Mexican immigrants. Data from the Current Population Survey indicate that between the first quarter of 2007 and the second quarter of 2009, the unemployment rate among Mexican immigrants rose from 4.2 percent to 11.3 percent, and their employment rate dropped by 5 percentage points. In contrast, during that period the unemployment rate among non-Hispanic white natives rose from 3.7 percent to 7.8 percent, and their employment rate fell by 2.6 percentage points. Mexican immigrants tend to be particularly vulnerable to economic downturns because of their relatively low skill levels. They make up one-fourth of all workers who do not have a high school diploma or equivalent and over one-half of workers who have completed at most eighth grade. When the economy slows, employers look to shed their least productive employees first. Employers tend to invest less in training low skilled workers and therefore have less