Michael Nicholson

Pia M. Orrenius

English

Research Papers in Economics

SouthwestEconomy       10      FEDERAL RESERVE BANK OF DALLAS • JULY/AUGUST 2007        
SpotLight Mix of Native, Immigrant Workers Varies
Regional	Labor	Force	Growth
America’s  labor  force  added  6.7  million 
workers from 2000 to 2005, a 4.7 percent na-
tional rate of increase that masks substantial 
regional differences. 
  Led by Arizona and Nevada, the Moun-
tain region posted the strongest expansion 
in labor supply (see table). The South Atlan-
tic, driven by Florida, came in next, followed 
closely by Texas and surrounding states.
  The Pacific region and the upper Mid-
west recorded relatively moderate gains. The 
Middle  Atlantic,  New  England,  the  interior 
South and the Midwest’s industrial heartland 
experienced the slowest workforce growth. 
  Such regional differences are driven in part 
by the natural rate of increase in a state’s exist-
ing population. They’re also spurred by labor   
demand, which attracts new workers to a state.
  These factors suggest labor force growth 
will be higher in regions with younger popu-
lations, larger families and stronger economic 
growth. Increases in real GDP from 2000 to 
2005 line up with labor force growth—ex-
cept for the anomaly of the East South Cen-
tral region.
  Those  who  migrate  from  within  the 
United States reflect an ongoing relocation of 
people from traditional population centers in 
the Northeast, Midwest and Pacific Coast to 
the South and Mountain West. 
  For the five years starting in 2000, New 
York,  California,  Illinois  and  Massachusetts 
had  the  most  out-migrants,  and  Florida, 
Arizona,  Nevada  and 
Georgia drew the most 
domestic in-migrants.1 
Texas ranked sixth in 
gains. 
  The  destination 
regions also had higher 
natural  rates  of  labor 
force growth.
  International  mi-
gration  has  become 
increasingly important 
as  U.S.  labor  force 
growth  has  slowed, 
largely  due  to  aging 
of the workforce. Im-
migrants,  responsible  for  an  estimated  38 
percent of the national growth in the 1990s, 
accounted for 45 percent in 2000–05.
  Once again, regional differences are tell-
ing. Parts of the country experiencing domes-
tic out-migration have become heavily reliant 
on  newcomers  from  overseas  to  replenish 
their  labor  force  (see  map).  From  2000  to 
2005, for example, the foreign born account-
ed for 94 percent of labor force growth in the 
East North Central region and 73 percent in 
New England. 
  Immigrants made a smaller but still sig-
nificant contribution to labor force expansion 
in the fastest-growing regions. In the South 
Atlantic, the foreign born drove 49 percent 
of labor force growth. They accounted for 
Labor Force, GDP Growth Largely Align, 2000–05
    Labor	force	 Real	GDP
	 Census	divisions	and	states	 (percent)	 (percent)
	
Mountain: MT, ID, WY, NV, UT, AZ, CO, NM  10.4  17.6
South	Atlantic:  WV, VA, NC, SC, GA, FL, DC, MD, DE  7.3  17.0
West	South	Central: TX, OK, AR, LA  7.3  12.9
Pacific: WA, OR, CA, AK, HI  5.7  12.8
West	North	Central: ND, SD, NE, KS, MN, IA, MO  3.8  11.6
Middle	Atlantic: NY, NJ, PA  2.9  10.9
New	England: VT, ME, NH, CT, RI, MA  2.9  8.1
East	South	Central: MS, AL, TN, KY  1.4  12.7
East	North	Central: WI, IL, IN, MI, OH  .7  5.5
SOURCES: Bureau of Labor Statistics, Current Population Survey; Bureau of Economic Analysis.   
37 percent in the West South Central region, 
which includes Texas. 
  America’s labor force is growing at differ-
ent paces in different places, with fast-grow-
ing regions acting as magnets for migrants. 
The factors that determine labor force growth 
change only gradually, which suggests recent 
trends will persist. Immigrants will continue 
to account for a large share of the growth 
until at least 2020, when the labor force will 
have adjusted fully to the retirement of the 
baby boomers. 
—Pia M. Orrenius and Michael Nicholson
Note
1 “Domestic Net Migration in the United States: 2000 to 2004,” 
Current Population Reports, April 2006.
Foreign-Born Share of Labor Force Growth
NOTE: Heavy lines denote boundaries of census divisions.
SOURCE: Bureau of Labor Statistics, Current Population Survey.
Mountain
South	
Atlantic
Pacific New	
England
West	
South	
Central
West	
North	
Central
Middle	
Atlantic
East	
South	
Central
East	
North	
Central
20%–40%
41%–60%
61%–80%
81%–100%

Regional labor force growth: mix of native, immigrant workers varies

http://dallasfed.org/assets/documents/research/swe/2007/swe0704d.pdf

Regional labor force growth: mix of native, immigrant workers varies

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