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

Abstract

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 effectiveness of U.S. educational institutions and labor markets 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-Hispanic 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.