We finished talking about unemployment today. One topic was how the official unemployment rate could systematically err. (Yes, this post is really about love.)
A student asked about how illegal aliens would affect the unemployment rate. As usual, I asked questions and had them answer.
If you're an illegal and you get the call from the Bureau of Labor Statistics, do you tell them that (1) you have a job (2) you don't have a job (3) you are looking for a job?
I got the answer that I consider to be most likely. If you are that illegal worker, you hang up the phone.
So the first conclusion is that the unemployment rate likely does not reflect the presence of illegals at all.
My next statement and question was this. If illegals are not included in the official statistics, because they do not participate in the survey, will that increase or decrease the unemployment rate? The answer depends on whether illegals are more or less likely to be employed.
I got the right answer again. Illegals do not have unemployment insurance. And they would often find it more difficult to get any other welfare benefits. That means they probably are more likely to be employed than non-illegals. So illegals really lower the unemployment rate, though we never pick that up in the data. The official rate is likely overstated.
The students' unprejudiced analytical view was too much for me. At that moment, I just loved my students.