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K-State Today

May 28, 2020

Job losses from COVID-19 especially severe for immigrants, new economics paper finds

Submitted by Hugh Cassidy

The COVID-19 crisis has caused an unprecedentedly large increase in unemployment in the past few months: between January and April 2020, the unemployment rate skyrocketed from a near-record low of 3.6% to a staggering 14.7%, an unemployment rate not seen since the Great Depression. However, this change has not been uniform across all groups.

In a recent National Bureau of Economic Research working paper, "The Adverse Effect of the COVID-19 Labor Market Shock on Immigrant Employment," K-State assistant professor of economics Hugh Cassidy, and co-author George Borjas of Harvard's Kennedy School, find that immigrants have suffered a much greater level of job loss than nonimmigrant workers. For several decades prior to April 2020, immigrant men had higher employment rates than nonimmigrant men. However, the decline in employment for immigrant men has been so severe that this employment advantage actually reversed in April 2020.

The authors investigate what might be driving this immigrant/nonimmigrant difference in job loss. Workers in jobs that are less amenable to remote working suffered much greater job loss than workers in jobs that are easier to perform at home. Since, before the crisis, immigrants were less likely to work in these remotable occupations, they were at more risk of job loss when the crisis struck. However, even accounting for differences in occupations, as well as other characteristics such as education, a large amount of the immigrant/nonimmigrant difference remains unexplained.

The results of this paper emphasize that, though there has been widespread economic hardship due to the crisis, the impacts in the labor market have varied greatly by group. Immigrants, workers in nonessential industries, and workers in occupations that cannot be performed remotely have suffered disproportionately.

The paper also has been posted as an Institute for the Study of Labor discussion paper. Read the IZA summary