Immigration to address the caregiving shortfall

In the upcoming years, a confluence of factors will produce an unprecedented shortfall in the necessary supply of caregivers. If left unchecked, this shortfall will result in a series of harmful economic outcomes—including sharply raised caregiving costs, outsized burdens on informal caregivers, and subpar quality of care. Since demand for care is largely out of policymakers’ control, the most promising way to address these challenges is by expanding the supply of caregivers. And one of the best strategies for expanding the supply of caregivers is through expanded pathways for legal immigrants.

The caregiving shortfall

The United States’ aging population is the primary driver of an increased demand for care. The percentage of the population aged 65 and over is rapidly expanding, having grown from 13% to 17% between 2012 and 2022. By the time the last baby boomers turn 65 in 2030, the Census Bureau projects that 73 million older Americans will make up over one-fifth of the U.S. population. In the following years, the Census Bureau projects that older adults will come to outnumber children.

This increasingly aged population necessitates a sharp increase in the supply of caregivers. A study by the Department of Health and Human Services found that 70% of 65-year-olds develop severe long-term care needs at some point over the remainder of their lives. As of 2022, much of this care is provided by roughly 5.2 million workers spanning a variety of settings, including nursing homes, hospitals, and personal residences. Although the Bureau of Labor Statistics expects the direct care workforce to expand to an additional 865,000 workers between 2022 and 2032,¹ this increase will likely be insufficient to meet the growing demand.

Multiple factors are contributing to this pressing labor shortfall. To start, retirees continue to show a preference for more labor-intensive care, namely care provided in the home or community. A 2018 survey found that 77% of Americans aged 50 and older would prefer to “age in place” and remain in their current communities for as long as possible. Understandably, COVID-19 may have further entrenched the preference for in-home care—for example, a survey of Canadians aged 50 to 69 found that 72% of respondents were less interested in living in nursing homes due to the pandemic.

The caregiver shortfall is exacerbated by the broader tightness in the labor market exhibited in the current economic expansion. The ratio of unemployed workers to job openings—one prominent measure of labor market tightness—was at 0.7 in January 2024, higher than in the  previous two years but still lower than any time in the decade preceding the pandemic. Furthermore, while the labor force participation rate has recovered from a pandemic-driven dip in 2020, the Congressional Budget Office projects that the share of American adults in the labor force will peak this year and then fall steadily throughout the decade. Population aging also means there are fewer prime working-age adults per person 65 and older, falling from 4.2 in 2000 to 2.9 in 2024.

The caregiver shortfall has contributed to a sharp increase in the price of care. Rising costs are partly driven by nursing home staffing shortages, which increase dependence on temporary workers provided by staffing agencies at hourly rates that are 50% to 60% higher than nurses employed directly. This increased expense seems to be at least partially passed on to patients. For example, a recently published survey of the cost of long-term care found that the median monthly price of a room in assisted living facilities increased by 18.89% on average between 2021 and 2023 (equal to around six percent after accounting for inflation²). The survey also reported that care providers named a shortage of workers as one of the primary drivers of rising costs.

A shortage of professional caregivers also reduces the overall quality of care, as it means that each caregiver is responsible for a higher number of older patients. Overworked caregivers often lack the time to meet all their patients’ needs, as well as the energy and clarity required to avoid mistakes. This leads to worse outcomes both for older Americans and for the caregivers themselves, who may become exhausted and quit—or leave the profession altogether. Indeed, turnover rates for care workers are extremely high, with the median annual turnover rate of nursing staff at nursing homes at 94% even before the pandemic. And over the first two years of the pandemic, the economy lost 400,000 workers in nursing and residential care facilities. Although employment at such facilities has since rebounded, it is still roughly 130,000 workers short of pre-pandemic levels.

The caregiver shortfall, and associated increase in price, means that the caregiving burden often falls on family members, particularly female relatives. These caregivers can suffer worsened mental and physical health outcomes. Research has found that spouses who began assisting their partner with daily tasks like feeding and dressing themselves displayed more depressive symptoms than spouses who did not begin to provide such care. Caregivers’ financial stability is also at risk, especially for women. One study found that providing intensive care to a parent was associated with a roughly five percent wage penalty for women, while another study suggested that the financial penalty for caregiving amounts to hundreds of thousands in lost wages, retirement savings, and Social Security benefits over women’s lifetimes.

Immigration as a partial solution

The nature of this caregiver shortfall has led policymakers and advocacy groups to look to immigration as a solution. Immigrants are already vital to the long-term care industry, making up about one-quarter of long-term care workers, and an even higher proportion of nursing home housekeeping and maintenance staff. Policy proposals for expanding the role of immigrant caregivers include the creation of a special visa category for frontline care workers, as well as providing a path to citizenship for immigrants who work to support seniors. Additionally, since immigrant workers are especially vulnerable to abuse and exploitation, reforms providing increased worker protections are vital for retaining existing care workers and attracting new ones.

Policymakers have responded by proposing immigration reforms to address the caregiver shortage. The Healthcare Workforce Resilience Act, introduced in November 2023, would recapture up to 40,000 previously authorized but unused employment-based visas. These visas would then be distributed to immigrant nurses and physicians, with the majority intended for nurses. Another bill, the Citizenship for Essential Workers Act, was introduced in May 2023 and would give immigrants who performed essential work during the pandemic the opportunity to apply for a green card.

The positive impacts of immigration on the availability and quality of long-term care are well documented, particularly as they pertain to nursing homes. Studies, such as Furtado and Ortega (2024) and Grabowski, Gruber, and McGarry (2023), have shown that an increase in immigration is linked with raised nursing home staffing levels, as well as improved patient outcomes. Furtado and Ortega found that larger immigrant populations are associated with nursing home residents suffering fewer falls and experiencing a slower decline in their ability to carry out daily tasks, while Grabowski and co-authors demonstrated that short-term hospitalization rates among residents decrease with a rise in immigration.

In addition to improving the quality of care in nursing homes, immigration enables retirees to age in place more easily, reducing their likelihood of needing to live in an institution at all. A study by Butcher, Moran, and Watson (2021) estimated that a 10% increase in the share of an area’s labor force made up of immigrants with less education reduced the likelihood of a person 65 and older living in an institution by 1.5 percent. The authors suggest that immigrant workers allow seniors to remain in their homes by providing home care services, as well as by helping with tasks like gardening or housekeeping that older people might struggle to complete on their own. In addition to allowing older households to satisfy their desire to age in place, immigration can also alleviate the caregiving burden experienced by family members.

A greater supply of care workers naturally drives down the price of long-term care. While this is desirable in that it makes care more affordable for households and reduces the financial demands on public programs like Medicaid, it is important to consider potential tradeoffs with this reduction in price. For example, Furtado and Ortega (2024) found that increased immigration depressed the wages of nursing assistants and licensed practical nurses, including both native-born and foreign-born workers in these occupations.³ Policymakers may want to consider safeguards for existing care workers alongside attempts to increase the quantity of immigrant care workers.

In sum, America’s rapidly aging population, coupled with an acute shortage of direct care workers, threatens to exacerbate an ongoing crisis in long-term elder care. Immigrant caregivers offer a partial solution to this crisis by simultaneously making long-term care more accessible, effective, and affordable for older Americans.