How Migration Affects Unemployment in the United States

The United States of America is a country whose formation relied heavily on immigration. However, the rate of migration has continued to be steady and with no doubt proved to be of effects in different fields. According to research, some of affected by migration include industrial sociology, labor economics, and social stratification. Consequently, many researchers have therefore sought to understand whether research presents any effect on the rate of unemployment. For instance Oh, Lee and Kim, (2011) concentrate on the finding out whether international migration has any effect on the unemployment rate in the urban of USA through the use of various theoretical approaches of testing. 

Some research finding indicates that the rate of immigration is ever increasing. The research identifies some of the reasons that stimulate the movement of the individuals from their native habitats to new settlements such as the urban areas of the United States and also argue that the movement has an effect on the effects present and original habitats. According to "Root Causes of Migration - Justice for Immigrants," (2019), poor wages and the lack of jobs are among the main reasons for migration. The immigrants, therefore, seek to move to places that have high job prospects and offer high wages. Both of the characteristics are present in the USA, Further to job prospects and higher wages, the USA presents safety and freedom, availability of food, a good environment that is less polluted, and availability of services that improves the quality of life ("Root Causes of Migration - Justice for Immigrants", 2019). 

The immigrants are also thought to have some qualities that affects unemployment. They include their level of education, duration of stay, and the reason for migration. All the three characteristics have been linked to the effects of immigration on the unemployment rate as noted by Chiswick, Cohen & Zach, (1997). The characteristics also present another dimension of the discussion that brings to light the fact that migration affects not only the destination of the emigrants but also their employment status. Schuss, (2017) further notes that the condition of the immigrants’ arrival also plays a vital role in determining their employment state. 

Problem Statement 

The problem statement of the research is; what is the effect of the migration on the United States unemployment rate? 

Rationale and Significance of the Study 

According to Oh, Lee, and Kim, (2011), the number of immigrants to the United States is ever increasing. The article further notes that, the increased number of immigrants can have an impact on the economic status of the Nation. As such, one of the significance of establishing the effect of migration on United States employment rate is to facilitate alignment of the immigration policies to ensure that migration does not negatively affect the labor market. 

Secondly, the research facilitates the understanding of some of the driving force of the ever increasing number of immigrants as noted by Oh, Lee, and Kim, (2011). In a bid to understand how immigration affects unemployment in the USA, the research will first seek to understand what the immigrant seek in the USA. It will offer an insight into the driving forces of immigration and how to deal with the current rate of immigrants. 

Finally, the analysis of data from the current research will reveal the current unemployment rate in the USA. Although the research focuses on its interaction of unemployment with immigration, it provides answers as to what factors affect unemployment. The information is vital in the establishment of measures to fight unemployment in the country. 

Review of Previous Research Work 

Many researchers have been attracted to researching the topic of immigration and its effects. Whereas some researchers directly deal with the analysis of the relationship between migration and employment, some have narrowed down to specific areas of interest. The diverse approach to the subject presents future researchers a wealth of literature to explore and gain more understanding. Some of the critical dimensions that have been used in the research include the investigation of the impact of international migration on employment rates in urban America as discussed by Oh, Lee, and Kim, (2011). Rios-Avila and Canavire-Baccareza, (2016), has almost taken a similar approach although narrowed down on studying the effect immigration causes on the unemployment of the native-born workers in the USA. Another publication titled, "Does a Change in Immigration Affect Unemployment Rate? | St. Louis Fed", (2019), directly analyses the effects brought about by the change in immigration on the rate of employment in various states of the USA. This section discusses the previous works that are related to the current study by highlighting their relevance to the research and the gaps the current research seeks to fill to make the areas of study more complete. 

Oh, J., Lee, S., & Kim, B. (2011). The Impact of International Migration on Unemployment Rates in Urban America: Testing Different Theoretical Approaches.  Journal Of International And Area Studies ,  18 (1), 49-64. 

The Article discusses the impact migration has on the rate of unemployment in urban America. It is based on two theoretical dimensions namely competition and discrimination. Four hypotheses are developed in the analysis. Hypothesis one states that “the growing size and composition of international migrants among the urban population will generally increase the local unemployment rate." The second hypothesis states that “a relative growth of recent immigrants’ cohort among total international migrants will lead to an increase in local unemployment rates in urban areas." It focuses on aspects such as the human capital and labor market analysis. The third hypothesis states that “if the urban concentration of international migrants tends to increase the average level of local human capital, local unemployment rates will decline because of the inverse relationship between individual human capital and the possibility of unemployment." Finally, the fourth hypothesis states that “More concentration of international migrants in urban areas will expand the scale and volume of their local economy in which more employment opportunities to both local and native workers and immigrant workers still lead to a decline in local unemployment rates. The research data is obtained from 301 American metropolitan areas with a population greater than 100,000. The primary dependent variables were the urban unemployment rate in 1990 and 2000. The regression analysis of the 2000 unemployment rate did concur with the fact that the increased rate of the unemployment rate was influenced by the increase in the rate of immigrants. The article, however, does not analyze the relationship of unemployment in other areas of the USA given that immigration is not concentrated in the urban areas only. 

Rios-Avila F., Canavire-Baccareza G. (2016).  Unemployed. Now What? The Effect of Immigration on Unemployment Transitions of Native-Born Workers in the United States . Working Paper 870. New York: Levy Economics Institute. 

The article investigates the effect of immigration on the rate of unemployment transition. It utilizes a multinomial model to analyses the findings that cover the years 2001 to 2013. Data is obtained from interviewing workers in the stated period. An econometric approach is used where a multinomial model that is based on the analysis of an area’s immigration rate and its effect on the labor market. The approach further models the probability of an individual’s rate of transition of employment between successive months. The paper finds that the rate of immigration has a minimal association with the rate of the native workers finding a job. However, immigration is directly associated with the rate of one remaining unemployed. This papers discussion focuses on how the immigrants affect the rate of employment of the native workforce. It also analyses how immigration affects the immigrant chances of getting employed. However, it does not narrow to look at other factors that immigration causes unemployment other than its association. Their shortcomings are therefore covered in the present study that seeks to feel the gap. 

Vandenbroucke, G., & Zhu, H. (2017). Mixing the Melting Pot: The Impact of Immigration on Labor Markets. Retrieved from https://www.stlouisfed.org/publications/regional-economist/first_quarter_2017/mixing-the-melting-pot-the-impact-of-immigration-on-labor-markets 

The article analyses the effect of migration on unemployment by looking at the rate of change on the ration of foreign-born in three states so the United States of America and comparing it with the results of the rate of change of the rate of unemployment. The three states of focus are Arizona, Alaska, and Washington. It covers data collected between the years 2000 and 2005. A finding from the research indicated that the increase in the rate of unemployment in the three specific states of Arizona, Alaska, and Washington does not correspond to an increase in the proportion of immigrants. For instance in Alaska between 2000 and 2005, the population of foreign-born decreased by 7.5% while the rate of unemployment rose by 6.7%. Though there is a weak correlation on the rate of immigrants to the rate of unemployment, the sampling of three out of the 50 states of the USA is not representative of the whole. Therefore, the current study seeks to select a sample size that is a true representative of the whole. 

Duszczyk, M., & Matuszczyk, K. (2018). The Employment of Foreigners in Poland and the Labour Market Situation.  Central And Eastern European Migration Review ,  7 (2), 53-65. doi: 10.17467/ceemr.2018.07 

It is established that between 2014 and 2016 the number of immigrants in Poland increased by over 300%. Such a drastic increase is thought to have a possible effect on the labor market. Indeed, findings indicate that most of the immigrants were workers. This article was triggered by the concern of finding how such a high influx of immigrants in Poland affects its labor market. A review on the history of the labor market of Poland reveals that about ten years before the years under review, Poland labor market was ranked the poorest among the European Union States. It was predominantly characterized by a high unemployment rate, at 19.1 % and recorded the lowest employment rate among the EU member states of 57.3%. Other characteristics included highly unbalanced wages. The stated characteristics forced most of the labor force out of the county. 

The article monitors the effect of the influx of immigrants by determining the unemployment rate. The rate is obtained for the labor office register and statistics from the international labor organization and Euorostats. The second approach included the evaluation of the employment rate. The statistics of the total number of working individuals were analyzed and compared to the total number of work permits issued. Thirdly, the article analyses economic inactivity as dictated by the number of economically inactive persons. Fourthly the article looks at the rate at which seasonal jobs are offered. Conclusions derived from the research finding indicated that despite the high influx of immigrants to Poland, its labor market was not negatively affected. Infarct, the influx had very minimal correlation with the rate of unemployment. The research presents a good insight into the current study given that it was conducted on a different continent. Secondly, unlike the present research which seeks to establish the rate of immigration and unemployment, the articles worked from a known rate of immigration which is considerably high and unlikely to be experienced in the current research. 

Objectives and Hypothesis 

Specific Objectives 

The specific objective of the current research is to; 

Identify the current rate of unemployment, 

Identify the current rate of immigration, and 

Establish the correlation between the rate of immigration and the rate of unemployment using the panel data model. 

Hypothesis 

Hypothesis 1: There is an increasing rate of unemployment in the United States. 

This assumption fits well in the current study. To better understand the state of the employment the research will delve into identifying the composition of the unemployed. The hypothesis is either validated or disapproved based on the finding of the trends of the unemployment rates. Findings based on the annual publication made on the bureau of labor statistics detail the state of unemployment, and its analysis provides an insight of the current state of unemployment, the trend over the last five years and the kind of population between the locals and immigrants that are affected by unemployment. (Bureau of Labor Statistics Data, 2019). The obtained results are not only crucial in testing the first hypothesis but also provide one of the variables used in testing the third variable and ultimately address our research question. 

Hypothesis 2: There is an increasing rate of immigrants in the United States. 

The second hypothesis assumes that the rate of immigrants is increasing. As such, it is perceived that the increase affects the labor market and more specifically the rate of unemployment. However, the second hypothesis does not go into detail about finding the relationship between unemployment and the rate of immigration. It utilizes data published by the US Census Bureau, (2019) in the analysis of the trend of immigration over the last five months. The manipulation of the data provides a basis of either accepting the hypothesis or rejecting it. Furthermore, the result forms a second variable that is used in the analysis of the overall relationship of unemployment and immigration through a panel data model analysis that seeks to answer the research question. 

Hypothesis 3: The rate of immigration directly affects the rate of unemployment of both the American Nationals and the immigrants 

The third and last hypothesis assumes that the rate of unemployment is directly affected by the rate of immigration. As such through the research, the study seeks to establish how migration affects unemployment by subjecting the results found in the manipulation of the two data sets on migration and unemployment rates. The two results are analyzed using panel data framework to provide a basis of either rejecting or accepting the hypothesis. The result of the third hypothesis forms the ultimate answer to the research question. The research goes further to back up the qualitative approach by a quantitative approach through the use of a questionnaire that provides detailed answers to the positive and negative effect of immigration on unemployment. The rejection of the third hypothesis not only concludes the research but also enables the formulation of the conclusions that justify the significance of the study. 

Research Proposal Methodology 

Data 

The current research seeks to analyze data on the rate of immigration captured in a different period in the United States and published on the United States census bureau website. An overview of the published data presents the classification of the USA into four regions; the Northeast, Midwest, and West. Data on the four regions concerning the number of annual immigrants, out-migrants, net internal migration, movers from abroad, and net migration from 1981 to 2018 has been published. However, the current study will only concentrate on data from the /period 2013-2015 to 2017-2018 which in essence covers five years between 2013 and 2018 (US Census Bureau, 2019) . The obtained data will form the primary source for establishing the trend of immigration between the set periods of study. And further analysis leads to the acceptance or rejection of the second and third hypothesis. 

Data on the rate of unemployment will be obtained from the Bureau of labor statics website. The website details the rate of unemployment to the Americans who are over 16 years of age. Some of the characteristics include the monthly unemployment rate that covers the selected five years period of the research (2013 to 2018). Individual annual labor statics reports also obtained from the website will also provide primary data that breaks down the characteristics of the employed and the unemployed over the same period (Bureau of Labor Statistics Data, 2019) . 

Analysis 

The analysis of data will be carried out in three stages. The three stages are aimed at accepting or rejecting the three presented hypothesis before finding out reasons for the results obtained after the results on the third hypothesis. The first two hypotheses will base on the raw data obtained from the national publications stated. The results will be refined before being subjected individually to t-tests. The results are then be subjected to a correlation test where the panel data model will be used. The results of the panel data model seek to either accept or reject the third hypothesis. Finally, quantitative research that involves people’s opinion on the results will be sought to obtain the probable reasons that back up the statistical results obtained (Bureau of Labor Statistics Data, 2019 & US Census Bureau, 2019). 

The estimation of the effect of immigration on unemployment when emigration and unemployment are cointegrated requires the research to specify the long-run relation in the logarithmic levels. 

The term represents the unemployment rate in the USA denoted by i over the five years denoted by t . , on the other hand, represents the rate of migration that is derived from a comparison of the locals to the foreigner in the job market and co-related to the over al rate of immigration as derived from the set data sources. The term has been included in the formula to cater for elasticity. Constant factors for both time and labor market are common in all countries. As such the factors for country’s fixed labor factors and for country's fixed time factors have been included in the equation to control the differences. Finally, the factor has been included in the equation to cater for the errors resulting from the country factor and the time factors as discussed by (Hsiao, 2014) . 

Results gained from the estimation of that panel data model leads to the acceptance or rejection of the third hypothesis. After the third hypothesis has been either accepted or rejected, a quantitative approach will be used based on randomized sampling in which members are asked to respond to a questionnaire that seeks to find the exact reasons that back the results found in the analysis. The questionnaire is opinion oriented that presents open-ended questions as to why people thing migration affects employment or why they think immigration does not affect employment in the United States of America. 

References 

Bureau of Labor Statistics Data. (2019). Bureau of Labor Statistics Data. Retrieved from https://data.bls.gov/timeseries/lns14000000 

Chiswick, B., Cohen, Y., & Zach, T. (1997). The Labor Market Status of Immigrants: Effects of the Unemployment Rate at Arrival and Duration of Residence.  ILR Review ,  50 (2), 289-303. doi: 10.1177/001979399705000206 

Does a Change in Immigration Affect Unemployment Rate? | St. Louis Fed. (2019). Retrieved from https://research.stlouisfed.org/publications/employment-research/does-a-change-in-immigration-affect-the-unemployment-rate 

Duszczyk, M., & Matuszczyk, K. (2018). The Employment of Foreigners in Poland and the Labour Market Situation.  Central And Eastern European Migration Review ,  7 (2), 53-65. doi: 10.17467/ceemr.2018.07 

Hsiao, C. (2014).  Analysis of panel data . New York: Cambridge University Press. 

Oh, J., Lee, S., & Kim, B. (2011). The Impact of International Migration on Unemployment Rates in Urban America: Testing Different Theoretical Approaches.  Journal Of International And Area Studies ,  18 (1), 49-64. 

Rios-Avila F., Canavire-Baccareza G. (2016).  Unemployed. Now What? The Effect of Immigration on Unemployment Transitions of Native-Born Workers in the United States . Working Paper 870. New York: Levy Economics Institute. 

Root Causes of Migration - Justice for Immigrants. (2019). Retrieved from https://justiceforimmigrants.org/what-we-are-working-on/immigration/root-causes-of-migration/ 

Schuss, E. (2017). Substantial Labor Market Effects of the Residency Status: How Important Are Initial Conditions at Arrival for Immigrants?.  SSRN Electronic Journal . doi: 10.2139/ssrn.3169872 

US Census Bureau. (2019). CPS Historical Migration/Geographic Mobility Tables. Retrieved from https://www.census.gov/data/tables/time-series/demo/geographic-mobility/historic.html 

Vandenbroucke, G., & Zhu, H. (2017). Mixing the Melting Pot: The Impact of Immigration on Labor Markets. Retrieved from https://www.stlouisfed.org/publications/regional-economist/first_quarter_2017/mixing-the-melting-pot-the-impact-of-immigration-on-labor-markets