Employment Research

Does a Change in Immigration Affect the Unemployment Rate?

by Guillaume Vandenbroucke and Heting Zhu

Immigration and its relationship to labor market outcomes are frequently debated in political and academic circles. Authors Guillaume Vandenbroucke and Heting Zhu set out to assess the connection between immigration and unemployment using state-level data in their article “Mixing the Melting Pot: The Impact of Immigration on Labor Markets.” First the authors examined changes in the proportion of foreign-born population and in the rate of unemployment between 2000 and 2005 at the state level: This is shown in the chart “The Relationship between Unemployment and Immigration.”

Looking specifically at Alaska, Arizona, and Washington, the authors found that an increase in unemployment did not correspond to an increase in the proportion of immigrants. In Alaska, the foreign-born population decreased from 7.5 percent to 6.7 percent and the rate of unemployment rose from 6.4 percent to 6.9 percent. Arizona and Washington experienced increases in the rate of unemployment over the same period, but the proportion of immigrants in those states increased by 0.6 percentage points for Arizona and by 2.1 percentage points for Washington. Using these states as examples, one can see that an increase in the rate of unemployment is weakly correlated to changes in the proportion of immigrants. This is also reflected in the chart, as there is no real alignment of points along a line or curve, indicating there is no statistical link between unemployment and immigration.