As it continues to grow, the composition of the Hispanic population is undergoing a fundamental change: Births in the United States are outpacing immigration as the key source of growth. Over the next twenty years this will produce an important shift in the makeup of the Hispanic population with second-generation Latinos--the U.S.-born children of immigrants-- emerging as the largest component of that population. Given the very substantial differences in earnings, education, fluency in English, and attitudes between foreign-born and native-born Latinos, this shift has profound implications for many realms of public policy, and indeed for anyone seeking to understand the nature of demographic change in the United States.

It is a commonplace claim that the education level of the Latino immigrant population is continually falling behind that of the U.S.-born population. However, the Pew Hispanic Center finds that the educational profile of the adult population of foreign-born Latinos has improved significantly during the past three decades. These gains, however, have not yet produced a notable convergence with the level of education in the native-born U.S. population. During the period 1970 to 2000 the native-born population also experienced improvements of education that outpaced the progress among Latino immigrants. Nonetheless, the trends identified in this report suggest that the gap between immigrants and natives will narrow in the future.

The Latino population is rapidly evolving and that its demographic impact on the nation is changing quickly. Significant concentrations of Hispanics are no longer confined to a few regions such as Southern California or the Southwest, or only to a few cities like New York and Miami. Instead, in the coming years Hispanic population growth will most impact communities that had relatively few Latinos a decade ago.

This study reports on an alternative estimate of the breakdown of the Hispanic population according to national origin groups. Based on recently released Census Bureau data, the estimate reduces the "other" category by more than half. This estimate does not change the overall size of the Hispanic population, but it does offer a new calculation of how national groups are distributed within that population.

There are more than 5 million unauthorized workers in the U.S. economy. This study estimates that these workers have become a very substantial presence in the sectors where they are concentrated. More than a million undocumented persons are employed in manufacturing and a similar number in the service industries. More than 600,000 work in construction and more than 700,000 in restaurants.

The long-term effects of the recession will likely depress employment and incomes in Hispanic communities at least through the end of 2004, and judging from historical experience that time span will be longer than for any other major population group. Even if predictions of a turnaround later this summer prove valid, pocketbook issues will vex Latinos for several years after the national economy recovers. Second-generation Latinos--U.S.-born children of an immigrant parent-- are now experiencing high job losses. In recent recessions Hispanic unemployment has fallen hardest on low-skilled immigrants. This time, young people who are the products of U.S. schools are experiencing the highest unemployment rates among Latinos. Many work in skilled occupations, including managers, technicians and professionals, and many are in the early years of household formation. Prolonged joblessness could prove a historic setback for them, their communities and the nation.