Will stopping immigration cause labor shortages?
Short answer: In many economies — especially the U.S. right now — yes, substantially reducing immigration tends to create or worsen labor shortages, particularly in specific sectors and in the context of an aging workforce.
Why this happens
1. Aging populations mean fewer native-born workers are available.
It is often underrecognized how much population aging is currently reducing the growth rate of the U.S. labor force—the share of the population over 65 was 12.4% in 2007, 17.9% in 2024, and will hit 21.2% by 2035. Even with maximum effort to raise participation among existing workers, the most ambitious policies to boost labor force participation would not materially change these demographic trends. In fact, the CBO forecasts that immigration will account for essentially 100% of total U.S. population growth over the next decade, and well over 100% after 2031, meaning the U.S.-born working-age population is forecast to shrink every year for the next decade.
2. Recent Federal Reserve research shows a direct, measurable link.
The San Francisco Fed found that lower net international migration led to a slowdown in foreign-born population and labor force growth, which contributed to tightening in the U.S. labor market. Quantitatively, the migration slowdown tightened local labor markets modestly, raising the ratio of job vacancies to unemployed workers 5.5 percentage points between 2017 and 2021.
A more recent (Nov. 2025) SF Fed analysis found the situation has intensified: recent shifts in immigration flows have lowered net international migration into the U.S., with new data indicating net migration close to half a million people in 2025, down from 2.2 million in 2024. This matters because without immigration, prime-age labor force growth will likely continue to slow and turn negative around 2042, and the native-born working-age population is estimated to decline by 740,000 between 2024 and 2025, with current immigration levels not large enough to offset this decline.
3. Certain industries are especially exposed. The Kansas City Fed notes that industries less able to implement labor-saving technologies to substitute for missing immigrant workers, such as direct-care, will likely experience increasing shortages and costs. In agriculture, immigrants already make up 73% of the total farming workforce, the largest share of any sector, so agriculture suffers disproportionately when legal immigration is restricted. Similarly, bipartisan policy research notes Construction has around 3.7 million foreign-born workers making up just over 29% of that industry, and Agriculture has around 600,000 foreign-born workers.
4. Current real-world evidence from stepped-up enforcement. Reporting in 2026 indicates growing concerns that removing immigrants from the workforce is adding to critical worker shortages in industries like construction, with a notable drop in labor-force participation among U.S.-born workers age 16+, from 61.4% in February 2025 to 61% in 2026. A Goldman Sachs analysis cited in reporting found an 80% decline in net immigration to the U.S., plummeting from an average of approximately 1 million people per year in the 2010s to a projected 200,000 in 2026. On the ground, industry groups report that the Association of General Contractors and a survey of roofers both cite immigration enforcement as a prominent factor reducing the supply of skilled workers, and immigrant workers make up a majority of roofers, painters and stucco masons.
Does reducing immigration help native-born workers instead?
The research consensus leans against the "job substitution" theory:
Broader economic consequences beyond "shortages"
Labor shortages from reduced immigration tend to show up as inflation and slower growth, not just unfilled jobs:
The caveats and counterpoints
Bottom line
Based on current research and data, cutting immigration significantly — especially combined with an aging population — is very likely to produce or deepen labor shortages in specific sectors (construction, agriculture, caregiving/health, hospitality) in the near-to-medium term, contribute to inflationary pressure, and slow GDP growth, rather than simply freeing up jobs for native-born workers on a one-to-one basis. Whether this counts as a broad economy-wide "shortage" versus concentrated sectoral pain depends on the scale of the immigration reduction and how quickly wages, automation, and participation rates adjust.
Citations (25)
- The U.S.-Born labor force will shrink over the next decade: Achieving historically ‘normal’ GDP growth rates will be impossible, unless immigration flows are sustained | Economic Policy Institute
Source excerpt: “It is often underrecognized how much population aging is currently reducing the growth rate of the U.S. labor force and will continue to pull it down ...”
- The U.S.-Born labor force will shrink over the next decade: Achieving historically ‘normal’ GDP growth rates will be impossible, unless immigration flows are sustained | Economic Policy Institute
Source excerpt: “One upshot of this research literature is that even the most ambitious policies to boost the labor force participation rate of the current U.S. workfo...”
- The U.S.-Born labor force will shrink over the next decade: Achieving historically ‘normal’ GDP growth rates will be impossible, unless immigration flows are sustained | Economic Policy Institute
Source excerpt: “Yet in demographic projections, the CBO (2025b) forecasts that immigration will account for essentially 100% of total U.S. population growth over this...”
- The Role of Immigration in U.S. Labor Market Tightness - San Francisco Fed
Source excerpt: “Lower net international migration led to a slowdown in the foreign-born population and labor force growth. This contributed to the tightening in the U...”
- The Role of Immigration in U.S. Labor Market Tightness - San Francisco Fed
Source excerpt: “Analysis of state-level data shows that this migration slowdown tightened local labor markets modestly, raising the ratio of job vacancies to unemploy...”
- Immigration and Changes in Labor Force Demographics - San Francisco Fed
Source excerpt: “Recent shifts in immigration flows have lowered the estimates of net international migration into the United States. New data indicate that net migrat...”
- Immigration and Changes in Labor Force Demographics - San Francisco Fed
Source excerpt: “We show that, without immigration, prime-age labor force growth will likely continue to slow and turn negative around 2042.”
- Immigration and Changes in Labor Force Demographics
Source excerpt: “The black line in Figure 1 shows that the native-born working-age population is estimated to decline by · 740,000 between 2024 and 2025. Our NIM estim...”
- Immigration Shortfall May Be a Headwind for Labor Supply - Federal Reserve Bank of Kansas City
Source excerpt: “Industries that are less able to implement labor-saving technologies to substitute for missing immigrant workers, such as the direct-care industry, wi...”
- Immigration Policy Solutions to Shortages in Critical Sectors of the U.S. Economy | CSIS
Source excerpt: “Immigrants already make up 73 percent of the total farming workforce in the United States, more than any other economic sector. As a result, the agric...”
- Bridging the Gap: Meeting Workforce Needs Over the Next Decade April 2025
Source excerpt: “industry sectors already depend on immigration, including Construction, which has around 3.7 million foreign-born workers making up just over 29% of t...”
- Immigration restrictions don’t boost native workers. They cut economic mobility for generations, study finds
Source excerpt: “There are growing concerns that removing immigrants from the workforce is adding to critical worker shortages in industries like construction. A recen...”
- Immigration restrictions don't boost native workers. They cut economic mobility for generations, study finds | Fortune
Source excerpt: “A recent Goldman Sachs report found an 80% decline in net immigration to the U.S., plummeting from an average of approximately 1 million people per ye...”
- Aging workforce, immigration crackdown are depleting skilled workers | News From The States
Source excerpt: “· Ford and the alliance didn’t mention immigration enforcement as an issue, but the Association of General Contractors and an unrelated survey of roof...”
- Aging workforce, immigration crackdown are depleting skilled workers | News From The States
Source excerpt: “Immigrant workers make up a majority of roofers, painters and stucco masons, according to a Stateline analysis last year.”
- Labor Market Impacts | migrationpolicy.org
Source excerpt: “A strong body of research and consensus by most economists finds that immigration, on balance, is a net positive for the U.S. economy. ”
- Labor Market Impacts | migrationpolicy.org
Source excerpt: “Economic theory suggests that the impact of immigration overall on the economy is likely to be small and for any negative effects to dissipate over th...”
- Immigration restrictions don’t boost native workers. They cut economic mobility for generations, study finds
Source excerpt: “Another recent study from the National Bureau of Economic Research (NBER) crunched national labor market and ICE arrests data from the past year and f...”
- Immigration restrictions don’t boost native workers. They cut economic mobility for generations, study finds
Source excerpt: “The researchers found a direct link between immigration quotas and the economic mobility of U.S.-born white men, who made up the lion's share of the l...”
- Economic research shows immigration is good for U.S. workers, the economy, and affordability - Equitable Growth
Source excerpt: “Labor shortages in key industries including health care and construction have plagued the U.S. economy since the COVID-19 pandemic of 2020–2023, in la...”
- Economic research shows immigration is good for U.S. workers, the economy, and affordability - Equitable Growth
Source excerpt: “Academic research substantiates this view: a 2024 paper estimated that a large-scale deportation effort would result in years of elevated inflation, p...”
- Declining Immigration, Aging Population Reducing Breakeven Employment Growth - Federal Reserve Bank of Kansas City
Source excerpt: “More broadly, the combined effects of an aging population and lower immigration have several long-term implications for the U.S. economy. With slower ...”
- Population Aging Is Here. Immigration Can Offer Half an Answer. | Migration Policy Institute
Source excerpt: “Skills shortages are likely to intensify in coming years, but a rise in workforce participation could offset this. This will have to include older wor...”
- Population Aging Is Here. Immigration Can Offer Half an Answer. | Migration Policy Institute
Source excerpt: “At the same time, a fundamental transformation in the labor force is beginning to unfold with the advent of generative AI, which could mean both huge ...”
- Our Labor Force Demographics Are Getting Worse | American Enterprise Institute - AEI
Source excerpt: “He and Grieser show that AI adoption is advancing slowest in sectors like healthcare, construction, manufacturing, and logistics, fields that depend h...”