In just three months, more than 1 million foreign-born workers disappeared from the U.S. labor force.
Let that sink in.
From March to June 2025, the foreign-born labor force shrank from approximately 33.7 million to 32.5 million — a drop of 1.147 million workers. That’s not just a workforce contraction. It’s a structural rupture.
And it’s sending false signals through our economy, masking weakness behind misleading metrics. When workers exit the labor force entirely, they’re no longer counted in unemployment figures. Which means jobless rates can appear deceptively healthy, even as the economic engine sputters beneath the surface.
This isn’t just a data distortion. It’s an economic red flag.
The Exit No One’s Talking About
Nearly a third of this million-worker exodus is a group rarely centered in economic policy:
foreign-born women.
They make up 43 percent of the foreign-born labor force — roughly 14 million workers, as of June 2025. While some may have left the U.S., the more urgent issue is this: Structural barriers continue to suppress their participation. Their labor force participation remains stubbornly low — 56 percent, compared to 77.2 percent for foreign-born men and 57.4 percent for native-born women.
Why does that matter?
Because foreign-born women are often the first to exit the labor market during instability.
They’re overrepresented in caregiving, food service, and domestic work — sectors that are underpaid, undervalued, and highly sensitive to economic shocks. These jobs see higher exit rates during downturns — and slower reentry, especially when women face barriers like childcare gaps, visa restrictions, or wage theft.
And yet, when barriers are lifted, foreign-born women don’t just return to work — they surge.
In early 2024, the labor force participation rate of college-educated, prime-age, foreign-born women jumped 5 percent above its pre-pandemic level — the strongest rebound of any group of women. In fact, they drove nearly two-thirds of the entire increase in working-age women’s labor force participation since 2020.
Why? Because a few key constraints were removed:
- Immigration rebounded. Net migration reached 1.7 million in 2022 and 2.3 million in 2023, adding a new wave of prime-age women to the workforce — many with college degrees.
- Work authorization rules were expanded. In 2022, the Department of Homeland Security extended Employment Authorization Document (EAD) auto-renewals from 180 days to 540, reducing job disruptions for skilled foreign-born spouses.
- Credentialing reforms gained traction. As of 2024, 17 states — including Illinois, Texas, and Virginia — enacted expedited licensing for foreign-trained healthcare professionals, reducing entry barriers for highly educated immigrant women.
In short, when the economy includes these women, they grow the economy.
A Self-Inflicted Wound
So why are we still sidelining this economic powerhouse?
Because we’ve built systems that fail to recognize and reward the skills, time, and potential of foreign-born women. They’re not leaving the labor force because they lack ability. They’re being pushed out by outdated assumptions and structural roadblocks: that degrees earned abroad don’t count, that care work doesn’t deserve fair pay, and that immigration status should limit opportunity.
The result? Billions in lost wages. Billions more in lost GDP. And a labor market shrinking from the inside out.
- Occupational segregation. Foreign-born women are 73 percent more likely than native-born women to work in service jobs, with 31% concentrated in caregiving, cleaning, and food service — compared to 18 percent of native-born women. Among those with foreign-earned degrees, one in four works in a job that doesn’t require one — especially Black and Latina women, who experience the steepest occupational downgrades.
- Pay inequity. Foreign-born women earn just 85 cents for every dollar U.S.-born women earn, and only 70 cents compared to U.S.-born men. The gap grows with education: Immigrant women with college degrees are paid 14 to 30 percent less than U.S.-born peers with the same credentials. These disparities contribute to an estimated $81 billion in lost GDP annually.
- Credentialing and skilling gaps. More than 1.1 million college-educated, foreign-born women in the U.S. are underemployed — blocked by non-recognition of credentials, licensing barriers, or employer bias. These women earn just 70 cents for every dollar U.S.-born women with similar education earn. The cost? An estimated $19 billion in lost GDP each year.
- Legal restrictions. Nearly 90 percent of H‑4 visa holders are women — many with advanced degrees in healthcare, STEM, and education. Yet thousands remain barred from working. Those with authorization contribute $12.9 billion to GDP; expanding access could raise that to $41 billion — a $28 billion opportunity left on the table.
- Labor violations. Foreign-born women in domestic work, caregiving, and food service account for a significant share of the $3 billion in annual wage theft across the U.S. These violations erode trust and stability — and cost the U.S. economy at least $600 million in lost tax revenue and $4.5 billion in GDP annually.
These barriers don’t operate in isolation — they stack. A Black immigrant woman may face racial
bias, gender bias, and non-recognition of her credentials all at once. Each friction point increases the odds that she’ll leave the labor force. And each exit shrinks the economy. It all adds up to: $81 billion from wage gaps, $19 billion from credentialing barriers, $28 billion from visa restrictions, $4.5 billion from labor violations.
That’s $132 billion in lost GDP every year — roughly the size of Nebraska’s entire economy — not
because these women aren’t skilled, but because our systems fail to see and support their value.
The Scalable Fix
We don’t need to wait a generation to grow the labor force. We can expand it now by removing
the barriers holding foreign-born women back. That means:
- Passing reforms like the H-4 Work Authorization Act, to ensure skilled women aren’t sidelined by bureaucratic technicalities.
- Streamlining credential recognition in fields like healthcare, education, and STEM — where many foreign-born women are already trained, but blocked by red tape. Seventeen states have acted; the rest need to follow.
- Scaling skilling programs where labor demand is real. Foreign-born women often bring experience in sectors like healthcare and education — fields with persistent shortages. We need systems that connect ready workers to open jobs.
- Auditing pay systems to identify and correct hidden bias by nativity and race, with employer transparency around pay, promotion, and representation.
- Embedding equity into workplace infrastructure — from multilingual onboarding to protections for low-wage workers — so that inclusion becomes the baseline, not the bonus.
These aren’t radical ideas. They’re shovel-ready economic solutions — with a GDP return of over
$132 billion a year. That’s the annual growth we forfeit by sidelining skilled foreign-born women.
I believe the most scalable labor market strategy we have right at our disposable is equity: These women are here. They’re skilled. They’re ready. And they’re being locked out by systems that fail to see their value.
The sooner we fix that, the faster we grow.
Katica Roy is a gender economist and the CEO and co-founder of Pipeline, a SaaS platform that leverages AI to drive economic gains through closing the gender equity gap.
