The immigrant population of the Ninth District has grown: What does it mean for the labor force?

Since January 2020, employers across the United States have filled the job hole created by the pandemic, plus another 5 million jobs. That ability to hire suggests there is an expanding labor pool. The growing foreign-born¹ population is a contributing factor.

In the Minneapolis Fed’s Ninth District, foreign-born growth rates have been robust, and the share of the labor force comprised of foreign-born workers has increased. Still, compared with the national average, the concentration of foreign-born workers remains relatively low in district states.

A west side story

After declining early in the pandemic, the U.S. foreign-born population bounced back strongly. According to the Current Population Survey, from 2010 to 2023, the foreign-born population grew by 30 percent, more than three times faster than the native-born population (Figure 1).

According to state panel microdata from the Census Bureau’s Current Population Survey, foreign-born individuals in the district are primarily concentrated in Michigan, Minnesota, and Wisconsin.² That’s because these states have larger populations and denser urban areas than states to the west.

While Montana, South Dakota, and North Dakota make up a tiny share of the district’s foreign-born population—about 6 percent combined—these states have seen some of the strongest growth.

In 2010, North Dakota had the smallest foreign-born population in the region. By 2023, this population had grown by 176 percent, helping the state leapfrog Montana and South Dakota. Michigan saw the smallest growth rate among Ninth District states, at 16 percent.

As more people from abroad have come to the United States, they have brought their disposition to work.

The U.S. labor force participation rate of the foreign-born population has historically been higher than that of the native-born. This was also true among district states in 2023, except for Michigan, where the opposite was the case by a slight margin (Figure 2).

There are other differences among groups. Foreign-born men tend to participate in the labor force at higher rates than native-born men and women, regardless of nativity. Among women, rates tend to be slightly higher among native-born workers.

But the gap seems to be closing, and quickly in some cases. In Minnesota, labor force participation among foreign-born women has been higher than that of native-born women since 2021.

The foreign-born labor force is also relatively younger. Across the country, about 70 percent were between the ages of 25 and 54—what economists call the "prime" labor force—compared with 62 percent of the native-born labor force. That younger share is even higher in some Ninth District states, like North Dakota, at 82 percent.

Steady growing prominence

Fast growth among the foreign-born workers means their slice of the labor force is also growing.

Nationwide, 18.6 percent of the total labor force in 2023 was foreign-born, up from 15.8 percent in 2010. Despite high growth rates among district states, their labor force shares still lag far behind that national average (Figure 3). At the top, Minnesota’s labor force share of foreign-born workers was 10 percent in 2023. At the bottom, Montana’s share is just 3 percent despite having seen 55 percent growth in foreign-born workers since 2010.

In North Dakota, a much higher growth rate among the foreign-born population has pushed its labor force share from about 3 percent in 2010 to just above 6 percent in 2023.

Over the years, North Dakota has worked particularly hard to integrate people from around the world into the labor force.

“We want new arrivals to have the same opportunities as everyone else,” said Janna Pastir, deputy director of the North Dakota Department of Commerce Workforce Development Division. “Coordinated language, adult education, and digital skills programming help integrate immigrants to meet the needs of our economy.”

Endnotes

1 The term “foreign-born” is used by the U.S. Census Bureau to describe individuals who are not U.S. citizens at birth, including those who have acquired U.S. citizenship through naturalization.

2 Estimates are annual averages calculated using public-use state panel microdata from the U.S. Census Bureau’s monthly Current Population Survey. The share of foreign-born includes those who identified as “Foreign-born, U.S. citizen by naturalization” and “Foreign-born, not a citizen of the United States” (“4” and “5” on the PRCITSHP variable). Labor force participation is calculated by dividing the sum of those who responded they were “Employed-at work”, “Employed-absent”, “Unemployed-on layoff”, and “Unemployed-looking” (“1”, “2”, “3”, and “4” on the PEMLR variable), divided by the civilian noninstitutional population 16 years of age and older.