Unemployment Problems Among College-Educated Immigrants in the United States

This is the third paper in a series of papers that examine labor market underutilization problems experienced by college-educated immigrants who earned college degrees outside the United States compared to their counterparts who earned college degrees in the United States. Labor market underutilization can occur in several ways and this series of papers examines the four key ways in which underutilization can occur in American labor markets.

This paper examines the extent of underutilization that occurs after entry into the labor market in the form of unemployment. College-educated immigrants who choose to participate in the labor market, but are unable to find a job do not utilize the human capital that they acquired with their college education. Understanding the extent of underutilization in the form of unemployment among different groups of college-educated immigrants can provide important insights to guide policies that are targeted towards reducing barriers to the full integration of college-educated immigrants into American labor markets.

Findings of this study reveal that unemployment was not a major problem among college graduates. However, a comparison of unemployment rate across different groups of college graduates revealed that the unemployment rate among foreign-born college graduates was somewhat higher than that among their native-born counterparts (4.8% versus 3%). The unemployment rate of college-educated female immigrants was higher than that of male immigrants (5.5% versus 4.3%), especially among those who were married and had young children. Unemployment rates also varied among immigrant college graduates by type of entry visas ranging from 2.8 percent among those who had entered the US with work visas and 5.5 percent among those who arrived with dependent visas. Immigrants with graduate and advanced degrees experienced lower rates of unemployment than those with just a bachelor's degree.

A comparison of unemployment rates by country/region of college degree found that in general immigrants with college degrees earned abroad experienced somewhat higher unemployment rates than those with US college degrees. The patterns were somewhat different among male and female immigrants. Among male immigrants the unemployment rates of those with college degrees from UK and Europe, Canada, China, and Latin America were lower than that among men with US college degrees. One explanation may be that immigrant men with degrees from overseas are more inclined to trade unemployment for underemployment in the form of involuntary part-time employment or mal-employment. Among women only those educated in Canada and the Philippines had lower unemployment rates than those who were educated in the US.

The lower unemployment rates among immigrants with Canadian or British college degrees (among immigrant men and women) is likely due to the large share of these immigrants with work visas. One-half of the labor force of immigrants with Canadian college degrees and 40 percent of those with British college degrees had entered the US with a work visa. Immigrants with a work visa usually have a job waiting for them when they land here and are therefore more likely to have skills and education that are easily transferable in the US labor market. Entry to the US with work visas was also much more common among immigrant women educated in the Philippines than other immigrant women (25% versus 7%); which likely underlies the smaller unemployment problem among them.