Nearly half a million working-age residents of Massachusetts have limited English-language proficiency, representing another challenge for an economy that continues to lose many taxpayers to other states with lower taxes and cost of living.

The roughly 480,000 residents with limited English proficiency represents approximately 10% of the state workforce, and may be a significant undercount, due to reliance on 2022 census estimates, according to a new analysis released Wednesday by MassINC and the UMass Donahue Institute.

The analysis places the blame on state and federal funding that has not kept pace with growth in the state’s limited English-speaking, or foreign-born, population over the past two decades, which it says has led to large gaps in access to high-quality English-as-a-second-language services.

The gap in services, according to the analysis, is preventing that growing group of working-age people from contributing to the state’s economy at their full potential.

“It shows that there is an urgent need to support the 10% of working-age residents across Massachusetts — and 20% of workers in gateway cities — who have limited English proficiency,” said Nancy Huntington Stager, president and CEO of Eastern Bank Foundation, lead sponsor of the study, in a statement.

“Limited proficiency in English language skills inhibit cross-cultural social engagement, access to gainful employment, and increasingly, it impedes business growth,” Huntington Stager added. “Labor market trends project continued shortages of workers in Massachusetts. We need more workers to have the language skills and cultural readiness required to thrive in our workplaces.”

The latest analysis comes as the state is grappling with an influx of migrants taxing its emergency shelter system — Gov. Maura Healey announced new shelter restrictions that prioritize Massachusetts families on Tuesday — and on the heels of data from the Internal Revenue Service that showed Massachusetts ranked fifth in the country for loss of gross income due to domestic migration in 2022.

Over the last two decades, the adult population with limited English proficiency grew by 50%. But state and federal ESOL funding per adult with limited language proficiency fell by 25% and 40%, respectively, over that time period, the report states.

The analysis found that if each working-age resident were to receive help to increase their English proficiency by one level, the state could generate roughly $3 billion in additional annual earnings.

“Redoubling efforts to help this growing legion of LEP workers build English skills,” the report states, “will provide a powerful antidote to labor shortages, which pose an increasing threat to our economy and quality of life as low birth rates, early retirements and domestic out-migration reduce the state’s workforce.”