How Foreign- and U.S.-Born Latinos Fare during Recessions and Recoveries

• Author: Pia Orrenius,Madeline Zavodny
• DOI: 10.1177/00027162211028827
• Published date: 01 May 2021
• Date: 01 May 2021
• Subject Matter: Population Outcomes

ANNALS, AAPSS, 695, May 2021 193

DOI: 10.1177/00027162211028827

How Foreign-

and U.S.-Born

Latinos Fare

during

Recessions and

Recoveries

By

PIA ORRENIUS

and

MADELINE ZAVODNY

1028827ANN THE ANNALS OF THE AMERICAN ACADEMYHOW U.S. LATINOS FARE IN RECESSIONS AND RECOVERIES

research-article2021

Latinos make up the nation’s largest ethnic minority

group. The majority of Latinos are U.S. born, making

the progress and well-being of Latinos no longer just a

question of immigrant assimilation but also of the effec-

tiveness of U.S. educational institutions and labor mar-

kets in equipping young Latinos to move out of the

working class and into the middle class. One significant

headwind to progress among Latinos is recessions.

Economic outcomes of Latinos are far more sensitive

to the business cycle than are outcomes for non-His-

panic whites. Latinos also have higher poverty rates

than whites, although the gap had been falling prior to

the COVID-19 pandemic. Deep holes in the pandemic

safety net further imperiled Latino progress in 2020

and almost surely will in 2021 as well. Policies that

would help working-class and poor Latinos include

immigration and education reform and broader access

to affordable health care.

Keywords: Hispanics; immigrants; working class;

business cycle

The cliché that “a rising tide lifts all boats”

appears to hold true for Latinos in the

United States, at least in terms of their economic

prospects.1 Most Latinos see their economic

fortunes rise during periods of economic growth,

and at a faster pace than among non-Hispanic

whites. Conversely, Latinos tend to incur larger

losses than whites during recessions, especially

Pia Orrenius is a vice president and senior economist at

the Federal Reserve Bank of Dallas. She is also a

research fellow at the Tower Center for Public Policy

and International Affairs and the Mission Foods Texas-

Mexico Center at Southern Methodist University and at

the IZA Institute of Labor Economics in Bonn,

Germany, as well as an adjunct scholar at the American

Enterprise Institute.

Madeline Zavodny is a professor of economics at the

University of North Florida. She is also an adjunct

scholar at the American Enterprise Institute and a

research fellow at the IZA Institute of Labor Economics

in Bonn, Germany.

Correspondence: pia.orrenius@dal.frb.org