Will stopping immigration cause labor shortages?

Will halting immigration trigger labor shortages? I'll pull the latest evidence on workforce impacts.

Yes, the consensus of recent economic research and labor market data is that sharply reducing or stopping immigration worsens labor shortages, rather than relieving them.

1. Why economists expect shortages

U.S. government data shows falling immigration is contributing to the crisis, with an estimated 2 million fewer working-age immigrants in the country than there would have been if migration had continued at a steady pace. A smaller immigrant labor pool does not automatically leave a usable set of jobs waiting for native-born workers; the immediate effect is usually a tighter supply of workers, not a simple transfer of employment.

2. What the 2024-2025 data shows when immigration was restricted

Net migration into the U.S. may have been negative in 2025 for the first time in at least 50 years, dropping 77% between 2024 and 2025.

One year into the immigration crackdown, there is little evidence that closed borders are boosting employment for US-born workers. That squeeze coincided with a rise in joblessness among the native-born.

Economists attribute this to a structural mismatch: In many labor-intensive roles that rely heavily on immigrants, employers can't easily replace them with American workers.

In Texas, findings from the Dallas Fed Texas Business Outlook Surveys suggest policy changes will negatively affect the ability to hire and retain foreign-born workers at about 20 percent of Texas businesses.

Canadian business leaders similarly warn that immigration restrictions have gone too far, leaving companies struggling to recruit and retain skilled workers.

3. Labor market is already short - even before stopping immigration

As of 2026, there are 8.1 million unfilled jobs and 6.9 million workers to fill them. When businesses cannot find workers, projects are delayed, investments are constrained, supply chains weaken, and economic growth slows.

Sectors with chronic shortages have high foreign-born shares:

In construction and extraction occupations, the foreign-born share of employment rose from about 22% in 2003 to almost 36% in 2024.

4. Is there a long-term counter-argument?

Some researchers who favor stricter enforcement argue that in the long run, a decline in the immigrant population could lead to higher wages and more flexible working conditions, drawing more people into the labor force who are not currently working, particularly men in their 20s and 30s without college degrees.

However, data from the past year has not shown this effect materializing:

> "Look at what we're seeing: The US-born unemployment rate has been going up. The US-born labor force participation rate has dropped. So if we've had a big withdrawal of immigrants from the labor force, we don't see any sign of the US-born workers getting more employment because of that."

The San Francisco Fed study also suggests the large influx under previous policies expanded the labor force particularly benefiting sectors that faced labor shortages such as manufacturing and construction, and that the current crackdown would likely slow employment in these same industries.

In short: stopping immigration does not create a pool of unemployed native-born workers ready to fill the same jobs. Because of an aging population, low birth rates, and occupational mismatch, it tends to intensify existing shortages, raise costs, delay projects, and constrain GDP growth.