Immigration and the Unemployment Rate in 2023–2024

Victor Hernandez Martinez () and Geena Panzitta
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Geena Panzitta: https://www.clevelandfed.org/people/profiles/p/panzitta-geena

Economic Commentary, 2026, vol. 2026, issue 05, 8

Abstract: The increase in the US unemployment rate observed from early 2023 until late 2024 primarily reflected a decline in the job-finding rate. Using the share of noncitizens in the US labor market as a measure of immigration, this Economic Commentary evaluates two mechanisms through which a higher share of noncitizens coming from post-pandemic immigration could hypothetically affect the job-finding rate. First, noncitizens may have systematically lower job-finding rates than citizens. Second, during slowdowns, noncitizens’ job-finding and other transition rates may deteriorate more rapidly and extensively than those of US citizens. Evaluating both mechanisms, we find no evidence that the higher share of noncitizens in the labor market contributed to the rise in the unemployment rate during 2023 and 2024.

Date: 2026
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DOI: 10.26509/frbc-ec-202605

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