Category: Demographics

Who is supplying new workers to the European working age population?

In spite of relatively low population shares of migrants in Europe, the increase in the European labor supply from 2006 to 2018 was driven by migrants and by foreign-born persons in particular.

In the EU as a whole, the total labor force increased by 4.2 percent between 2006 and 2018 (i.e, an average annual increase of 0.33%). Given that natives’ contribution to this variation was almost zero, the entire increase in the total labor force is attributable to migrants. At the same time, the aggregate labor force participation rate rose by 5.2 percent in comparison to the 2006 level as a result of native-born persons’ limited contribution (by 0.9 percent) and foreign-born persons’ large contribution (4.3 percent). In other words, the growth in EU labor supply from 2006 to 2018, in terms of either the total labor force or the aggregate labor force participation rates, was driven by migrants.

The shifting contribution of foreign-born labor was influenced by a number of factors, including a demographic shift towards an older overall population, changes in work participation by older native born workers, the size of the foreign-born population, and the work participation rate of the foreign born. Generally, the increase in older person participation did not make up for a decline in total younger workers.

Among native born workers, there occurred an increase in the numbers of persons on the relatively old side of the working age population (in their 50s and 60s) and a higher work participation rate for them. Thus the meager growth of the native population in the workforce was disproportionately driven by older workers.

Norway, Italy and Germany were the most affected by a decline in the labor participation rate of natives – a 10% reduction in Norway,

In Sweden, non-migrants contributed 0.7 percent to the increase in the total labor force, whereas migrants’ contribution was 11.4 percent, for a total increase of 12.1% (that is, an average annual increase of about 1% a year). In Italy, the shrinkage in the native-born labor force would have resulted in a decrease in the total labor force by −1.8 percent, but through migrants’ positive effect (7.2 percent), the total workforce increased by 5.4 percent.  Only in the Netherlands was the native born increase in the workforce greater than the foreign-born; in France, the contributions were equal.

From International Migration Review, Christos Bagavos, How Much Does Migration Affect Labor Supply in Europe? 2023

 

Democrats can no longer depend as much on non-white ethnic and racial groups

Biden’s appeal to non-write voters, according to the Nate Cohn of NY Times, appears to be about 63-29 today.  The Democratic candidate received around 70-75% of the non-white vote in 2000, around 80% in 2012, and 74-75% in 2016.

Here: Demographic groups that backed Mr. Biden by landslide margins in 2020 are now far more closely contested, as two-thirds of the electorate sees the country moving in the wrong direction.

Voters under 30 favor Mr. Biden by only a single percentage point, his lead among Hispanic voters is down to single digits and his advantage in urban areas is half of Mr. Trump’s edge in rural regions. And Overall, nonwhite respondents who divulged their vote in the last election reported backing Mr. Biden by a margin of 70 percent to 24 percent, a figure neatly in line with postelection studies. While women still favored Mr. Biden, men preferred Mr. Trump by twice as large a margin, reversing the gender advantage that had fueled so many Democratic gains in recent years.

Black voters — long a bulwark for Democrats and for Mr. Biden — are now registering 22 percent support in these states for Mr. Trump, a level unseen in presidential politics for a Republican in modern times.

Here: Mr. Biden’s weakness among nonwhite voters is broad, spanning virtually every demographic category and racial group, including a 72-11 lead among Black voters and a 47-35 lead among Hispanic registrants. The sample of Asian voters is not large enough to report, though nonwhite voters who aren’t Black or Hispanic — whether Asian, Native American, multiracial or something else — back Mr. Biden by just 40-39. In all three cases, Mr. Biden’s tallies are well beneath his standing in the last election.

Young people of color, who make up a disproportionate share of nonvoters, are an important part of Mr. Biden’s challenge. He holds a 48-29 lead among nonwhite registered voters under age 45, compared with a 58-28 lead among those over 45.

 

 

World population trends and global migration

Ross Douthat in the NY Times writes, “whatever you see happening in Europe now is just the initial stage of the defining world revolution of the 21st century — the rapid graying of rich countries (and soon, not-so-rich ones) joined to the great migrations from the more youthful regions of the world…. the dilemma of the 21st century isn’t how Earth will feed an ever-growing population, but how the world will deal with a potential mass rebalancing of population via migration, an altered wealth-and-people equilibrium, in a world where technology is making the movement of peoples easier than ever.”

This is the first time that I’ve seen in a major American publication the global migration issues of the 21st Century concisely presented. Let’s break his observation down into several key themes:

“…The movement of peoples easier than ever.” In my post “key driver of global migration: costs have declined,” I cite three drivers over the past 50 years that Paul Collier specified: the costs of international movement; the costs of settlement, and the costs of keeping in touch with the host country. African taxi drivers in Washington DC tell me they routinely back for stretches — their nuclear families live there.  Smart phones have accelerated theses trends in the past 15 years.

“The rapid graying of rich countries (and soon, not-so-rich ones)”.  Most of the word’s population is living in counties where the fertility rate is below replacement (2.1), with India being the most recent major population bloc.

“Potential mass rebalancing of population via migration.” African populations are growing as a vastly greater rate (over 4) than other continents (under 2.1, and 1.5 in the EU). Emigration from Africa has been surging. These are not just poorly skilled refugees. Nigerian immigrants to the U.S. are the most highly educated immigrant group today (go here and here).

 

 

One thing that Douthat (and many others) miss is that immigration is not some magic wand to combat the aging crisis. The demographics of migration are more complex. They are multi-generational. Here I note that immigrants to the U.S., having on average aged a bit, are by being in child-bearing age contributing more babies. Thus a 30 year old immigrant family will produce children today who will enter the American workforce in about 2045.

Working age population trends U.S., Germany, Canada and China

Between 2010 and 2020, the working age population (15-64) in Germany declined by 2% or one million, and increased in the U.S. by 0.5 % or nine million. Canada’s working age population rose by 4% or 800,000.  Canada likely had the highest rate of working age population increase among all advanced economies, thanks to its aggressive immigration policy that results in an immigration flow three times that of the U.S. on a comparable population basis.

This population increased in China by 6% or 75 million between 2010 and 2020. In China the working age population likely hit its peak in about 2015, and the 2030 figure is expected to be 880 million, a 110 million or 11% decline.

Immigration to keep up the size of the workforce, and avoid decline, is essential in most or all advanced countries.

 

Wealth in America by race / ethnicity: very recent trends

The Federal Reserve reports on the growth and distribution of wealth from 2019 through 2022, drawing from the 2022 Survey of Consumer Finances (SCF).  Note the relatively very high wealth of Asian households.  I have found no reliable analysis of why Asians are so wealthy. In the past 10 – 20 years, new Asian immigrants are far better educated that white and other groups in the U.S. which may have translated into higher incomes allowing for housing purchases and equity investments.

Two dominant drivers of wealth since the Great Recession are the stock market (Dow Jones 10/2009 was under $14,000, now over $33,000) and housing prices (median price October 2009 $214,000; October 2023, $416,000).  Any household who new ability to buy a home or invest in stocks rode these waves.  

I have posted on the economic rise of Hispanic households (here and here) and the educational powerhouse of Asians (here).

 

 

From the Fed’s report

[On real wealth—the difference between assets and liabilities in 2022]. Median wealth (the amount held by a typical family, shown in the top panel) among White families was $285,000 in 2022. By comparison, the typical Asian family—who we can split out for the first time in 2022 because of an oversample of certain non-White groups—held $536,000, nearly twice that of the typical White family. Meanwhile, the wealth of the typical Black family ($44,900) was only about 15 percent of the typical White family. The typical Hispanic family similarly held only about 20 percent of the wealth of the typical White family (about $61,600).

Between 2019 and 2022, wealth for the typical Black family rose 61 percent and for the typical Hispanic family it rose 47 percent….while the typical White family saw a 31 percent increase. However, despite faster growth in wealth for the typical Black and Hispanic family, the absolute dollar-value differences in wealth between the typical White and the typical Black and Hispanic family grew in 2022 because the typical Black and Hispanic family had less wealth in 2019. Both the White-Black and the White-Hispanic median wealth gaps increased by around $50,000 between 2019 and 2022, with each gap reaching over $220,000 in 2022.

Since the Great Recession the typical Black and Hispanic family has had between about $10 to $15 of wealth for every $100 held by the typical White family (Figure 3). This ratio has closed only modestly in the past two surveys. The typical Black family went from having about $9 in wealth for every $100 held by the typical White family in 2013 to around $16 in 2022; the typical Hispanic family went from having about $10 in wealth for every $100 held by the typical White family in 2013 to around $22 in 2022.

Most notable is the increase in net housing wealth—the market value of a family’s home minus any outstanding loans secured by the home—among all groups, but particularly for Black and Hispanic families. In part, the larger increase for Black and Hispanic families reflects the fact that these families tend to have higher leverage ratios, which amplifies the effect of rising prices on wealth, though it also reflects an increase in homeownership rates among these families.

Black and Hispanic families the gains in wealth were concentrated in housing, which is somewhat illiquid and may not be as useful as liquid wealth for covering recurring expenses. As shown in Figure 4, real average liquid wealth, which includes assets such as cash, checking, and savings accounts, did not grow much for Hispanic families and fell for Black families.

[Summary] Overall, the SCF depicts a complex account of families’ finances and disparities across race and ethnicity. Broad-based gains in wealth across race and ethnicity have narrowed wealth ratios somewhat over the past three years, but income ratios widened slightly. In particular, incomes for non-White families were propped up by temporary sources, like government support, that have ended, with real wages stagnant, on average, for Black and Hispanic families. While most families were able to meet their required payments, families, especially non-White families, have grown more pessimistic and uncertain about the current and future state of both their own finances and the economy. The recent improvements in wealth ratios across races is promising, but families’ increased financial uncertainty suggests continued improvements may not persist in the future.

How many foreign born persons today in the U.S. ?

According to a October, 2023 report by the Congressional Research Service, there are 46.2 million foreign born persons in the U.S.

Legal resident non-immigrants —  Normally about 9 – 10 million, decline drastically under Trump, in 2022 back up to 6.8 million. In 2019, there were 1.4 million persons with work visas, such as H-1B workers and temporary farm workers (H-2B and H-2A). Students are included here, about 950,000 (a figure not provided in the CRS report. It is not clear in the CRS report how foreigners here on temporary non work visits, such as family visits and tourism, that do not involve the need for a visa, are here.  This is one of several cases of gaps in data.

Green card holders (Lawful Permanent Residents) – 12.9 million in 2022.

Naturalized citizens – 24.5 million

Unauthorized persons – between 10.3 and 11.3 million. The CRS includes in this figure DACA beneficiaries (579, 000) and TPS (Temporary Protected Status) 611,000, as of March 2023. The last figure has almost certainly increased since March. Regarding humanitarian parole benefiaries, CRS says that the government does not have a figure for the number in the country (!).

Asylum applicants subject to deportation, case pending – in FY 22, Customs and Border Protection released 780,000 persons in this category, and in the first 11 months of F23 764,000. Some of these are covered by TPS or parole. Here again, an unduplicated count is not available.

 

China fertility rate plummets

The Wall Street Journal reports that China’s total fertility rate fell to 1.09 last year, from 1.30 in 2020. I wrote in 2022 on China’s “doomed demographics.”  In 2016, when China scrapped its one-child policy, 18 million births were recorded. In 2022 the figure fell below 10 million.

The fertility rate of India is now 2.0.

Are foreign born workers driving down labor force participation?

The Center for Immigration Studies asserts that the decline in labor force participation in the U.S. is in part a result of foreign-born labor, particularly at the lower part of the job market with respect to formal education.

CIS Executive Director Camarota says that “Using large-scale illegal immigration to fill jobs may please employers, but it allows policymakers to ignore the decades-long decline in labor force participation that contributes to profound social problems, from crime and drug overdoses, to welfare dependency and suicide.”

Here is a summary of the participation rate experiences of the U.S. and six other advanced countries. Some countries have aggressive pro-immigrant policies, such as Canada and Germany. One in particular, Japan, has a very small foreign-born workforce.

United States: Peaked at around 67% prior to the 2008 recession. As of 2021 it was around 62%, with declines driven by aging and health/disability reasons.

Canada: Labor force participation rate declined from around 67% in 2011 to around 65% in 2021. The drop is largely attributed to aging demographics.

Japan: Labor force participation has declined steadily from over 70% in the 1990s to under 63% in 2021. Japan has the oldest population which is a major factor.

Germany: Dropped from over 70% in the 1990s to under 68% in 2021. Driven by aging population, lower participation among women, and expanded welfare.

Italy: Fell from around 57% pre-2000 to under 56% in 2021. Aging population and poor economic growth play key roles.

France: Decreased from about 65% in 2003 to 64% in 2021. Aging demographics, unemployment, and increased school enrollment are contributors.

United Kingdom: Remained relatively steady around 63-64% over the past two decades. Less affected by aging than other European countries.

The labor force participation rate of Americans without a high school degree has been declining for 50 years, and I expect in all regions of the country, even those with small foreign-born workforces with little formal education.  This does not mean that foreign workers have not taken over jobs which U.S. born workers had done in the past – an example being meat processing plants. But it does mean that one has to look at the nuances of work, by industry and by region, to make sense of how foreign and U.S. born workforces interact.

The labor force participation rate for Americans without a high school degree: In the 1950s and 1960s, the labor force participation rate for this group was around 60-65%. It started declining in the 1970s and fell to around 55% by the 1980s. The decline accelerated in the 1990s, with the rate falling to around 45% by 2000. In the 2000s and 2010s, the rate continued to decline and reached around 30% by 2020.

One also needs to consider that the total number of U.S. born people without a high school degree has severely shrunk in the past few decades:  Between 1990 and 2020, the size of the U.S. born adult population over 25 without a high school degree declined by about 8.2 million (from 18.5 million to 10.3 million). As a percentage of the total U.S. born adult population over 25, this group declined from 13% in 1990 to 6% in 2020.

Help from Claude AI.

Temporary Protected Status

The Biden Administration has given temporary legal status to hundreds of thousands of persons through the use of the Temporary Protective Status program and through Humanitarian Parole. In this posting I address TPS. In 2019 there were about 400,000 persons covered by TPS. After action the Biden Administration in September, over a million will be covered. They will account for about 650,000 workers.

The Trump Administration attempted to terminate some authorizations but were frustrated by the courts. No immigration program since the passage of the 1986 has accelerated legal status in the U.S. more than TPS. It is, I believe, reasonable for a TPS benefiary to think that they have a very good chance of becoming a legal permanent resident.

(The best in depth reviews of TPS are here and here.)

Congress enacted the Temporary Protective Status program as part of the immigration act of 1990 to establish a uniform process and standard for granting temporary humanitarian protection in the United States, for non-citizens already in this country whose home countries are in crisis.  This provision was in part a response to a 1947 U.N. Protocol on refugees.

TPS designation can be for an initial period of anywhere from 16 to 18 months and extended indefinitely for periods for up to 18 months. The program is designed for people who cannot return safely due to their home countries due to ongoing armed conflict, environmental the disaster, or other extraordinary and temporary conditions. While the designation formally is temporary, the designation can lead to a more permanent status.

Nearly 93 percent of current TPS holders are from Latin American countries, particularly El Salvador, Haiti, and Venezuela, where a worsening humanitarian crisis has caused more than seven million people to flee the country. Hundreds of thousands of Salvadorans have been allowed to stay in the United States since devastating earthquakes rocked El Salvador in 2001. Haiti was first assigned TPS after a massive earthquake destroyed much of the country in 2010, and it received the designation again in 2021 and 2022 amid continued violence and a prolonged political crisis. Honduras and Nicaragua were given TPS after a hurricane battered the region in 1998. Countries that have previously received TPS include Angola, Bosnia and Herzegovina, Kuwait, Liberia, Rwanda, and Sierra Leone. (Go here).

In March 2019, some 400,000 citizens from 10 countries were covered by TPS, per the Congressional Research Service. As of March 2023, about 610,000 citizens of 16 countries have been granted TPS. In September 2023 the Biden Administration allowed 472,000 Venezuelans to be covered, adding to the some 250,000 Venezuelans already covered by TPS. Some arrived into the U.S. illegally, and they are prevented from moving to a more permanent status. Many have been here for years, integrating into the economy and raising children.

growth in interracial marriage, 1980 vs 2021

From Pew Resarch:

In 2020, 11% of all married couples in the U.S. were interracial or interethnic, according to Pew Research Center analysis. This is up from 3% in 1967 when the Supreme Court struck down bans on interracial marriage.

The most common interracial marriage pairing is one Hispanic and one white spouse at 42%. Census data collection changes between 2010 and 2020resulted in a tripling of persons who self-described a multi-racial, mainly involving this demographic.

Next is one white and one Asian spouse at 15%, then one white and one black spouse at 12%.

Interracial couples have increased across all education levels, but are most prevalent among couples where both partners have at least a bachelor’s degree.

Rates of interracial marriage vary widely by region. In Western states like Hawaii and Nevada, about 1 in 3 married couples are interracial. In Southern states, the rate is around 1 in 10.

About 20% of cohabiting couples were interracial in 2012. The interracial cohabitation rate has risen faster than the interracial marriage rate.

By 2050, Pew projects that 1 in 5 U.S. newlyweds will have a spouse of a different race or ethnicity. This indicates that interracial relationships will likely continue growing.