Immigrants' income packaging and invisible labor force activity

Objective. This paper examines the pervasiveness and income revenues of informal self-employment among recent immigrants from Mexico to Chicago (1) to assess the limitations of conventional labor force indicators for portraying the extent of immigrants' labor force activity; (2) to document the share of household income produced outside the formal labor market; and (3) to illustrate the importance of assessing immigrants' economic well-being using households rather than individuals as analytic units. Methods. We analyze a random household survey that was conducted in a Mexican-immigrant neighborhood and that contains highly detailed measures of economic activity and income sources. Vignettes are used to illustrate the income-packaging strategies of unskilled immigrant families, including the nature of informal activity. Results. We show that once multiple job holding is taken into account, labor force participation rates of women increased from 43% to 53% for all working-age women, and from 45% to 56% for the female respondent sub-sample (mainly household heads or spouses). For families involved in the informal economy (14% of sampled households), economic activity reduced earnings poverty by nine percentage points. Conclusions. We conclude that conventional census measures of labor force activity cannot reveal the full extent of immigrants' economic activity. The conclusion also outlines promising directions for further research.