Executive Summary

Publication Details

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Carmen Lomas Garza

Cama Para Sueños (bed for dreams) (1985)

Copyright by the artist; used with permission.

Currently the nation's largest ethnic minority, Hispanics are one of the fastest-growing segments of the U.S. population, and they will remain so for the foreseeable future. Numbering over 40 million today, Hispanics are growing by more than 1.5 million annually, from both continuing immigration and natural increase. If current demographic trends continue, nearly 1 in 4 U.S. residents will be Hispanic, or of Hispanic ancestry, by 2030—just a generation hence—up from about 1 in 7 in 2000. Until recently, Hispanics were concentrated in the largest cities in Texas and California, as well as Chicago, New York, and Miami. Now they are scattering nationally, and communities throughout the country are facing the challenges presented by a new, quickly growing immigrant population.

The Hispanic population is characterized by a youthful age structure; a large number of foreign born, including many “undocumented”; low levels of education; and disproportionate concentration in low-skill, low-wage jobs. And its presence is being felt in the nation's schools, labor market, health care systems, and political life. A pivotal element of this story is the Hispanic second generation, the children of Spanish-speaking immigrants, who are coming of age as the white majority population is aging. Now numbering 10 million, the second generation is projected to grow to 26 million over the next 25 years. Today the majority of the second generation is in school; by 2030 the majority will be in the labor force. Their economic and social integration will depend on educational investments made today: the Hispanic demographic dividend can be harnessed for the benefit not only of future generations of Hispanics, but also of the nation.


Despite their common language and ancestral ties to Spain, Hispanics are highly diverse. Altogether they represent 20 Spanish-speaking nationalities, both recent immigrants and families that date back to the first Spanish settlements in what is now the United States. Differences by generation, legal status, and nationality affect many dimensions of their social integration, but foreign birth and legal status are the most decisive because they reflect differences in English proficiency, educational attainment, and familiarity with U.S. institutions.

“Hispanics” do not exist in Latin America and the Spanish-speaking Caribbean. Coined as an ethnic category in the mid-1970s by government regulation, the U.S.-made panethnic term gained popular currency after being used in the 1980 census short form and in all subsequent Census Bureau surveys and censuses. The term “Latino”—most popular in California during the 1980s and 1990s—was added to the 2000 census. Often used interchangeably, both terms are widely contested, with no consensus on their full meaning. If U.S. Hispanics are forced to choose between the panethnic terms, Hispanic is preferred to Latino by a margin of 3 to 1.

Routine use of both labels for classification purposes has gradually transformed the terms from ethnic categories into racial identities, especially among the second generation. Thus, rather than viewing themselves as an ethnic group, growing numbers of Hispanics are beginning to view themselves as a separate race. The move away from white identity among second-generation Hispanics stands in strong contrast to the experience of earlier immigrant groups from southern and Eastern Europe, whose social acceptance and cultural assimilation in the United States involved self-identification as white. The key question for the future is whether Hispanicity will evolve into a symbolic identity for some or all people of Latin American descent as they join the American mainstream, or whether it will become an enduring marker of disadvantaged minority group status.


With time, most immigrant communities become ethnic groups, and within three generations (i.e., the grandchildren of immigrants) most expressions of ethnicity are rendered symbolic as a result of intermarriage, acquired proficiency in English, improved socioeconomic status, and residence in ethnically integrated neighborhoods. Hispanic immigrant communities are experiencing this assimilation process. Most notable are the pace of language shift and intermarriage trends—two pillars of socioeconomic integration and Americanization. Hispanic intermarriage with whites, which is most common among those who are U.S. born and who are better educated, increases socioeconomic mobility.

Areas densely populated by Hispanics, especially by recent immigrants, give the impression that the United States is becoming a bilingual nation. The seeming ubiquity of Spanish in these neighborhoods is, in reality, a transitory phenomenon reflecting the large number of recent immigrants. For Hispanics, Spanish fluency erodes the longer immigrants are in this country and across generations. As did prior non-English-speaking immigrant groups, Hispanics are experiencing a decline in their use of, preference for, and fluency in Spanish. Recent trends suggest that the grandchildren of the present wave of immigrants will likely be primarily English monolingual.

Trends in wages, household income, wealth, and home ownership across time and generations point to the gradual ascension of many U.S.-born Hispanics to the middle class. But as a group Hispanics are losing economic ground relative to whites because of the weak economic position of large numbers of low-skilled immigrants, many of whom are undocumented, which lowers the population averages on socioeconomic measures.

In contrast to these important similarities with previous immigrant groups, several important features distinguish the Hispanic experience from those of other ethnic and minority groups. Understanding these differences is essential for appreciating the opportunities that the growing numbers of Hispanics represent for their communities and for the nation, as well as for alerting policy makers of potential risks to the nation's economic and political life.

First, a very large proportion of Hispanics—almost half—are foreign born, among whom roughly 40 percent are undocumented. Given the dominance in this group of Mexicans who come to this country with low levels of formal schooling, foreign-born Hispanics feature both high employment and high poverty rates. Hampered by their limited education and a lack of English skills, Hispanic immigrants are concentrated in low-skilled service-sector, agriculture, and production jobs that pay low average wages. That many undocumented workers experience wage discrimination further depresses the earnings of the foreign born.

Second, unlike the wave of European immigration that ebbed following World War I, immigration from Latin America has continued at high levels for three decades. Since 1950, the Hispanic population has increased from 4 million to more than 40 million. During the 1980s and 1990s, the increase was driven by immigration from Latin America and the Caribbean. During the current decade and for the future, Hispanic growth from births is projected to eclipse that from immigration. However, immigration—both legal and illegal—is likely to remain at high levels for at least another generation. At the same time, fertility rates for Hispanics are above those of the native white population. These demographic processes concentrate the swelling numbers of Hispanics in the first and second generations, precisely those facing the formidable challenges of integration.

Third, changes in the U.S. economy since the mid-1970s that increased demand for skilled workers—precisely when the Hispanic population began to expand—magnify the difficulties they face in joining the U.S. mainstream. As a relatively young population with low average education levels, Hispanics are overrepresented in the types of low-skill jobs that have experienced significant wage erosion in recent decades. Despite improvements in job skills over time and across generations for Hispanics, the sustained influx of immigrants with limited education maintains the population's strong presence in low-wage jobs.

Fourth, unlike prior waves of European immigrants and even of most Latin American immigrants who arrived before 1990, recent Hispanic arrivals are less likely to settle in traditional gateway cities like Los Angeles, New York or Chicago. Lured by intense job growth and the promise of affordable housing, Hispanics are dispersing across the mainland, adding complexity to the long-standing struggle for black-white racial integration as newcomers from Mexico and Central and South America alter the ethnic and racial landscape, forcing multiculturalism in places previously familiar only with black and white. Whether and how the Hispanicization of metropolitan and nonmetropolitan America redraws spatial color lines is an unanswered question with far-reaching implications for social integration and civic engagement. This very new phenomenon and mixed evidence about the reception experiences of new Hispanic immigrants makes it difficult to forecast its effects.


By 2030, 25 percent of U.S. residents will be of retirement age or older, but Hispanics are a youthful population. In 2000, their median age was just 27, compared with 39 for non-Hispanic whites. Furthermore, today the median age of the Hispanic second generation, the nation's future workers, is just over 12. Rising numbers of Hispanic young people will slow the nation's overall population aging and can partially offset the growing burden of dependency produced by an aging majority. But their success in doing so depends on the level of their earnings, which in turn depends on their education and acquisition of job-related skills. Currently, Hispanics' representation among highly skilled U.S. workers is below the national average.

Perhaps the most profound risk facing Hispanics is failure to graduate from high school, which remains unacceptably high. The share of Hispanic high school students 16 to 19 years old who failed to graduate fell only marginally during the 1990s, from 22 to 21 percent. Foreign-born Hispanic youths 16 to 19 years old are significantly more likely than native-born students to drop out of high school—34 compared with 14 percent in 2000—but being foreign born is not the main reason that they fail to graduate. Many immigrant students who drop out are recent arrivals who were already behind in school before arriving in the United States. In addition, in the urban schools that many Hispanics attend, low graduation rates are typical. Fully 40 percent of Hispanic students attend high schools that serve large numbers of low-income minority students and graduate less than 60 percent of entering freshmen.

Hispanic college enrollment is on the rise, but still lags well behind that of whites. In 2000 Hispanics accounted for 11 percent of high school graduates, but only 7 percent of students enrolled in 4-year institutions and 14 percent of enrollees in 2-year schools. Hispanic students are more likely than whites to attend 2-year colleges, which decreases the likelihood that they will complete a bachelor's degree. As a result, the Hispanic-white college gap is increasing, despite the fact that Hispanic college enrollment is on the rise.

Hispanic students who fail to master English before leaving school incur considerable costs. English proficiency is mandatory for success in the labor market and is vitally important for navigating health care systems and for meaningful civic engagement. How to ensure proficiency in English remains highly controversial: there is no consensus on how best to teach non-English-speaking students across the grade spectrum.

The significance of Hispanics' high school dropout rates, low enrollment rates in 4-year colleges, and need to master English cannot be overstated because the fastest-growing and best-paying jobs now require at least some postsecondary education. In 1999, nearly 6 of 10 jobs required college-level skills, including many that had not required college training in the past. In rapidly growing occupations, such as health services, nearly three in four jobs now require some college education. These trends bode ill for Hispanics as their college attendance and graduation gap with whites widens.

Additional challenges for Hispanics are posed by new developments that affect families and children. The number of Hispanic mother-only families is growing, as it is for other ethnic and racial groups. Because mother-only families are significantly more likely to be poor, this trend signals heightened vulnerabilities for a growing number of youth. Moreover, it is too soon to tell what the long-term effects of welfare reform will be on Hispanics—especially on groups that rely most heavily on public benefits.

Young people are also at risk of failure because of the rising numbers of Hispanic families that lack health insurance. Expansions of federally subsidized programs such as Medicaid and the State Children's Health Insurance Program appear unlikely in an era of unprecedented federal budget deficits. Continued immigration of Hispanics from Mexico and other countries in Central and South America, coupled with their geographic dispersal to areas unaccustomed to providing care for diverse groups of patients, will challenge current approaches to providing health insurance coverage and health care to low-income Hispanics, particularly to recent immigrants.

There are also troublesome signs of declining health among Hispanic children, signaled by elevated levels of risk for diabetes, atherosclerosis, and cardiovascular disease, along with increasing rates of obesity and its myriad complications. For the burgeoning second generation, the implications of this trend are ominous, especially in light of the number of children who do not receive preventive care because they lack health care coverage.

With institutional investments, Hispanic immigrants and their children can acquire the education and language skills necessary to realize the Hispanic demographic dividend, namely the higher earning potential of a youthful Hispanic workforce. In 2000 the 2-year average educational gap between all Hispanics and whites cost about $100 billion in lost earnings. Given the growth in the Hispanic populations that is projected to occur over the next 30 years, the cost of this education gap could rise to $212 billion in current dollars by 2030, taking into account the generational shift.

Failure to close Hispanics' education and language gaps risks compromising their ability to both contribute to and share in national prosperity. How these risks and opportunities play out over the decades ahead will define not only the kind of future Hispanics will inherit, but also the economic and social contours of the United States in the 21st century.

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Julio Valdez

Personaje con Historia (2001)

Copyright by the artist; used with permission of Julio Valdez Studio.