Will stopping immigration cause labor shortages?

Will halting immigration trigger labor shortages? I'll pull the latest research on how immigration shapes the workforce.

Yes, stopping immigration would be expected to increase labor shortages in the short to medium term, according to research from the Federal Reserve and recent labor market studies - though the effect is uneven by industry and location.

1. Recent evidence: less immigration = tighter labor market

That study found from 2016-2021, when net international migration fell steadily:

2. Effects are concentrated in immigrant-reliant industries

The Fed found the relationship was not uniform:

> "immigration has uneven effects across sectors and labor markets, suggesting outcomes from increased immigration may vary by industry and location."

Construction and food service have become increasingly reliant:

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

3. Why native-born workers do not quickly fill the gap

Economists describe a "structural mismatch":

> "In many labor-intensive roles that rely heavily on immigrants, employers can't easily replace them with American workers."

Recent experience after the 2025 immigration crackdown illustrates this:

Bloomberg reporting noted firms in construction, leisure and hospitality and food production say it's taking longer to find workers, with few native-born job seekers turning out - consistent with pandemic experience when "We had the highest wage inflation we've ever seen in those jobs, and yet we couldn't get anybody into them" until immigration flows resumed

Additional research found enforcement causes broader job losses, not gains for natives:

Reasons given:

Interdependence matters, especially in construction: "A framing crew can't hand off work to a roofing crew if it can't finish the job because it is suddenly missing half its workers"

Immigrants also enable others to work. In 2019 more than 25 percent of directcare workers were foreign born and higher immigration has been found to lower childcare prices and increase hours worked by high-skilled women

4. Demographic context

With birth rates at a record low and baby boomers retiring, immigration is described as "a main avenue for growth of the labor force"

Federal Reserve Bank of San Francisco research found "the working-age population would have likely started shrinking over a decade ago if not for immigration"

5. Caveats and longer-term adjustment

One researcher favoring stricter enforcement noted: "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" but "some of them may have to overcome health challenges, criminal records or other issues" and "I don't know if one year is going to be enough to make much difference."

Bottom line

Stopping immigration entirely would not create a 1-for-1 job opening for native workers. Evidence indicates it would:

Over many years, higher wages, automation, and training could induce some native workers to enter those occupations, but studies show that adjustment is slow and incomplete, and does not offset near-term shortages.