How Much Does Immigration Data Explain the Employment‑Gap Puzzle?

Richard Audoly and Roshie Xing

No 20250602, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: A puzzling feature of official U.S. employment statistics in recent years has been the increase in the gap between the nonfarm payroll and household employment numbers. This discrepancy is not trivial. From the end of 2021 though the end of 2024, net job gains in the payroll survey were 3.6 million larger than in the household survey. In this Liberty Street Economics post, we investigate one potential explanation for the emergence of this gap: a sharp rise in undocumented immigration during the post-COVID period that would be differentially reflected in the two surveys. We leverage industry-level data to study the relationship between our estimate of employment of likely undocumented migrants and the payroll-household employment gap. These data suggest that factors besides undocumented immigration likely contributed to the emergence of the gap between the two measures of U.S. employment.

Keywords: employment gap; immigration; statistics (search for similar items in EconPapers)
JEL-codes: E24 J6 (search for similar items in EconPapers)
Date: 2025-06-02
New Economics Papers: this item is included in nep-mig
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