Immigrants' income packaging and invisible labor force activity

Objective. This paper examines the pervasiveness and income revenues of inf ormal self-employment among recent immigrants from Mexico to Chicago (1) to assess the limitations of conventional labor force indicators for portrayi ng the extent of immigrants' labor force activity; (2) to document the shar e of household income produced outside the formal labor market; and (3) to illustrate the importance of assessing immigrants' economic well-being usin g households rather than individuals as analytic units. Methods. We analyze a random household survey that was conducted in a Mexican-immigrant neighb orhood and that contains highly detailed measures of economic activity and income sources. Vignettes are used to illustrate the income-packaging strat egies of unskilled immigrant families, including the nature of informal act ivity. Results. We show that once multiple job holding is taken into accoun t, labor force participation rates of women increased from 43% to 53% for a ll working-age women, and from 45% to 56% for the female respondent subsamp le (mainly household heads or spouses). For families involved in the inform al economy (14% of sampled households), economic activity reduced earnings poverty by nine percentage points. Conclusions. We conclude that convention al census measures of labor force activity cannot reveal the full extent of immigrants' economic activity. The conclusion also outlines promising dire ctions for further research.