Will stopping immigration cause labor shortages?

Will halting immigration tighten the labor market? I'll examine current data on immigrant workforce share, shortages, and demographic trends.

Yes, according to most economic and demographic research - stopping immigration would worsen and accelerate U.S. labor shortages, it would not create more jobs for native-born workers.

1. The U.S. workforce is already shrinking without immigration

The U.S. fertility rate stood at 1.6 in 2024, below the 2.1 replacement rate required to sustain population growth since 2008.

Because of that and the retirement of baby boomers, the native-born labor force declined in 2024 to 135.8 million from 136.1 million in 2023.

The Federal Reserve Bank of San Francisco found:

> without new immigration, the U.S. working-age population ages 16 to 64 would have started to decline in 2012

And:

> growth in the working-age population without immigration has fallen below zero... We project that, without immigration, working-age population growth is likely to be negative through at least 2040

For the prime-age labor force (ages 25 to 54), the Fed estimates that without immigration, growth will likely continue to slow and turn negative around 2042.

The Fed also estimated net international migration (NIM) fell sharply in 2025 to 515,000 people, well below the roughly 1 million per year historically needed to keep the working-age population growing. Without accounting for deportations, that level is not large enough to offset the estimated 740,000 decline in the native-born working-age population between 2024 and 2025.

Other estimates show a similar collapse:

•Between 2024 and 2025, net migration dropped 77 percent because of policy changes.

•Goldman Sachs analysis shows net migration has fallen 80% from the historical baseline, plunging from an average of about 1 million people per year in the 2010s to just 200,000 projected for 2026.

•The foreign-born labor force has declined by about 1.2 million people since January.

With those trends:

> Brookings estimates the population declines by 7 million by 2040 without immigration

And:

> Without future immigration, the population of working-age adults would decline to 166 million by 2035, vs 173 million in 2015 rising to 183 million with immigration.

The Federal Reserve Bank of San Francisco found that without immigration, the U.S. working-age population would have started shrinking in 2012, not 2025.

Deloitte notes: payroll growth averaged just 29,000 per month between October and December 2025 — well below the 166,000 recorded per month in 2024, with the sustainable pace of monthly job growth estimated at between 20,000 and 50,000 at the end of 2025 due in part to the drop in net migration.

2. Which sectors would be hit hardest?

Immigrants make up approximately 17% of the labor force, and prior to mid-2025, foreign-born workers were 18.4%, nearly one-fifth of the American workforce.

Concentration is much higher in sectors with chronic shortages:

•Construction, which relies on immigrant labor for 34% of its workforce

•Construction: 25% immigrant workforce dependency and 25% of construction labor

•Agriculture: 66% of agriculture workers and 63% of CA farmworkers are immigrants

•Healthcare: 15–28% of healthcare staff

•In 2024, foreign-born workers were more likely than native-born workers to be employed in service occupations, natural resources, construction and maintenance, and production, transportation, and logistics. These are sectors with chronic labor shortages and limited domestic supply pipelines

Research notes:

> Labor shortages in key industries including health care and construction have plagued the U.S. economy since the COVID-19 pandemic ... in large part due to a decline in immigration during the pandemic

> Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks

> The U.S. is on track to lose more immigrants than it gains in 2026. That means fewer workers paying taxes, building homes, growing food, and caring for an aging population.

3. Would stopping immigration help native-born workers?

The counter-argument is that less competition would raise wages and jobs for Americans. Empirical evidence so far does not support it.

•Research shows that immigration boosts output without reducing native employment. There is also scant evidence that native-born workers' wages are adversely affected. If anything, native-born worker wages rise after a wave of immigration. Workers who would otherwise compete with immigrant labor move into different tasks that allow them to maintain employment and increase wages.

•The Congressional Budget Office estimated that a rise of 8.7 million immigrants over a five-year period would raise real gross domestic product by 2.9% a decade later.

•Moody's Analytics Chief Economist Mark Zandi said the expected gains in native-born wages from tighter immigration policy have not materialized, at least so far.

•There is little evidence that closed borders are boosting employment for US-born workers. In fact, net migration into the US may have been negative in 2025 for the first time in at least 50 years... That squeeze coincided with a rise in joblessness among the native-born.

•Native-born workers are not gaining from immigrants' loss. Their labor-force participation rate is down to 61%, from 61.5 in June 2025, now at its lowest, at least, since the COVID pandemic.

Economists explain this as a complementarity problem, not substitution:

> Removing 8–10 million mostly prime-age workers isn't a clean "native wages rise" story. It's a negative labor-supply shock that disrupts production, raises prices in bottleneck sectors, and reduces the productivity of complementary workers.

> Many industries that rely on immigrant labor cannot automate or offshore the work. When workers disappear, employers do not instantly replace them with native-born workers at higher pay... Employers who cannot fill them cut output, automate where they can, relocate, close, or raise prices.

4. Short-term vs long-term

•Short-term (1-3 years): Stopping immigration would immediately reduce labor supply. With 4.18 million Americans turning 65 last year, the highest number ever recorded, and Social Security funded by today's workers, the system would face fewer payers. Sectors like farming, hospitality, and residential construction would see acute shortages, project delays, and higher consumer prices.

•Medium-term (5-20 years): Without immigration, the working-age population decline becomes entrenched. Lower labor force growth reduces potential GDP, tax revenue, and innovation. Brookings and Cato models warn of population decline and public debt reaching at least 205 percent of GDP.

•Nuance: Immigration is not the only lever. Higher native labor-force participation, later retirement, automation, and higher fertility supported by paid childcare and housing could partially offset losses, but those take 18 years to show up - as one analyst noted, today's baby is 2043's worker, while immigrants participate in the labor force at higher rates than native-born Americans and pay into Social Security today, not in 2043.

In short, the U.S. economy has been dependent on immigration to offset an aging, below-replacement-rate native population for more than a decade. Abruptly stopping it would likely deepen labor shortages rather than solve them, especially in physically demanding, seasonal, or geographically concentrated jobs that native workers have historically not filled at current wages and conditions.

Citations (3)

1deloitte.comCompanies
US immigration impact US economy | Deloitte Insights
Backs: “Yes, according to most economic and demographic research - stopping immigration would worsen and accelerate U.S. labor shortages, it would not create more jobs for native-born workers. 1. The U.S. workforce is already shrinking without immigration”
2frbsf.orgGovernment
Immigration and Changes in Labor Force Demographics
Backs: “Because of that and the retirement of baby boomers, the native-born labor force declined in 2024 to 135.8 million from 136.1 million in 2023. The Federal Reserve Bank of San Francisco found:”
3lvb.comNot yet classified
US faces workforce decline as immigration drops 77 percent
Backs: “Without accounting for deportations, that level is not large enough to offset the estimated 740,000 decline in the native-born working-age population between 2024 and 2025.”