Will stopping immigration cause labor shortages?

Will halting immigration trigger shortages? I'll pull the latest research on labor, demographics, and wages to find out.

Yes - according to most economic and demographic research, a sharp reduction or full stop to immigration would worsen and prolong labor shortages in the United States and other aging advanced economies, though the effect is uneven across sectors and time.

1. Demographic baseline: native workforce is shrinking

The U.S. and other developed economies face a structural squeeze, not just a cyclical one:

•About 4.18 million Americans turned 65 last year, the highest number ever recorded in a single year

•The US fertility rate was 1.6 births per woman, below replacement rate of 2.1, and population starts shrinking outright by 2033 if this continues

•Deaths are projected to exceed births around 2030-2031, reducing natural growth of the workforce. Around 2030, deaths are projected to exceed births, meaning future workforce growth will depend increasingly on 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

Immigration has historically offset part of this worker loss, and removing immigrant workers reverses that stabilizing effect. Deportation would compound a structural labor-force slowdown caused by Baby Boomer retirements, population aging, and weak domestic workforce growth

Between 2024 and 2025, net migration dropped 77 percent because of policy changes. Brookings estimates the population declines by 7 million by 2040 without immigration.

In that context, economists note: without the immigration surge of 2022 to 2024, the US working-age population would have been shrinking.

Japan shows the same pattern in an even more advanced form: more than 28% of the population is over 65, while the birth rate has fallen well below replacement levels.

2. Immigration and labor shortages are directly linked

Research finds:

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

•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 large part due to a decline in immigration during the pandemic.

Recent analysis:

•Net migration has fallen 80% from about 1 million per year in the 2010s to just 200,000 projected for 2026, and the foreign-born labor force has declined by about 1.2 million people since January.

•More than 1.2 million immigrants left the U.S. workforce from January to July 2025, and one projection estimates reduced immigration will reduce the U.S. workforce by 6.8 million workers by 2028.

A National Foundation for American Policy study cited in press coverage says: reducing immigrant labor worsens shortages, raises costs, and disproportionately affects Latino workers and essential services.

3. Which sectors are most exposed?

Immigrants are not evenly distributed; they concentrate in jobs with chronic domestic supply gaps:

Immigrant-dependent sectors such as agriculture, construction, and hospitality have borne the brunt of policy-driven labor shortages.

•Health Care: Legal immigrants are more than 18% of the health care workforce; nurse unemployment is ~1.6%. About 18% of all health care workers are immigrants.

•Construction: 202,000 openings reported in February 2026; nearly 90% of employers report vacancies. The construction industry, which relies on immigrant labor for 25% of its workforce, is facing acute labor shortages. 92% of construction firms struggle to find qualified workers.

•Manufacturing: 313,000 durable goods manufacturing openings remained unfilled as of April 2025.

•Hospitality, Agriculture, Logistics: ~979,000 open positions in hospitality (BLS JOLTS, 2026) with foreign-born workers = ~24% of workforce, and immigrants represent about 21.9% of agricultural workers. Construction, agriculture, hospitality, logistics, and food processing depend on these workers to fill physically demanding roles that are often difficult to staff.

The argument made in economic literature is that immigrants and native-born workers often complement rather than substitute for each other: A native-born engineer, architect, plumber, or electrician would find fewer work opportunities if immigrant construction laborers were deported.

4. Would stopping immigration help native workers?

Proponents of restriction say fewer immigrants = more jobs for natives. Evidence does not support this on average:

•Economic literature suggests that that is not the case. In fact, 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.

•There is a quite broad consensus that for all large groups of native born workers the aggregate impact of immigration into the USA on wages is very near zero.

Studies of enforcement shocks found the opposite of the intended effect: deportations decreased native-born employment, particularly among workers who held higher-skilled jobs that were previously complemented by their deported colleagues, and the Secure Communities program which deported roughly 454,000 undocumented immigrants between 2008 and 2014 was found to reduce the employment share of native-born workers.

Recent data also show there is little evidence that closed borders are boosting employment for US-born workers, even as net migration into the US may have been negative in 2025 for the first time in at least 50 years.

5. Nuance: Timing and alternatives

•Not all analysts see immediate tightening. One Oxford Economics analysis notes: The crackdown on unauthorized immigration has the potential to tighten labor market conditions, but our analysis shows this has yet to unfold. Lags between migration and joining the labor market mean the impact of slowing migration is delayed but not postponed indefinitely.

•Alternatives to immigration exist but are slow or partial: automation, higher wages to attract natives, later retirement, higher fertility supported by childcare/parental leave - but 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 immediately.

•Reduced immigration does not just slow job creation; it directly shrinks the labor supply.

Bottom line

Stopping immigration would not create a large pool of native workers waiting to fill the gaps in the most affected sectors. In an economy where births are below replacement and retirements are at record highs, immigration is forecast to account for nearly all labor force growth over the next decade.

Halting it slows growth and manufactures labor shortages in health care, eldercare, construction, agriculture, hospitality and logistics, raising costs and inflation. Large-scale deportations are found to be even more contractionary than simply halting new inflows, leading to native-born job losses and supply chain disruptions.

Citations (3)

1lvb.comNot yet classified
US faces workforce decline as immigration drops 77 percent
Backs: “Demographic baseline: native workforce is shrinking. The U.S. and other developed economies face a structural squeeze, not just a cyclical one:”
2uschamber.comNot yet classified
Immigration By the Numbers
Backs: “The US fertility rate was 1.6 births per woman, below replacement rate of 2.1, and population starts shrinking outright by 2033 if this continues”
3equitablegrowth.orgNonprofits and think tanks
Economic research shows immigration is good for U.S. workers, the economy, and affordability
Backs: “Japan shows the same pattern in an even more advanced form: more than 28% of the population is over 65, while the birth rate has fallen well below replacement levels. 2. Immigration and labor shortages are directly linked. Research finds: Reduced immigration contributes to labor shortages, driving inflationary…”