Will stopping immigration cause labor shortages?

Short answer: Yes, in many key sectors — with important nuances

Reducing immigration generally does contribute to labor shortages, particularly in specific industries, though the overall economic effects are more complex than a simple "shortage."

The evidence for labor shortages

Recent U.S. data (2025-2026) shows this playing out in real time. The United States experienced negative net migration in 2025 for the first time in at least decades, with estimated net flows of –295,000 to –10,000 for the year. Brookings researchers found reduced migration dampens growth in the labor force, consumer spending, and GDP, with sustainable monthly job growth estimated between 20,000 and 50,000 in late 2025, possibly turning negative in 2026.

Sector-specific impacts are pronounced, especially in:

Broader economic modeling

A study projected that the Trump administration's immigration crackdown is projected to reduce the U.S. workforce by 6.8 million people by 2028 and by 15.7 million by 2035. This is expected to have dramatic effects on the economy—from lower growth to reduced goods and services produced—and could make it difficult to attract workers in health, agriculture and energy as the population ages.

An AEI/economic analysis similarly found that reduced immigration would reduce GDP growth in 2025 by 0.3–0.4 percentage points, cutting potential employment growth from 140,000-180,000 jobs a month in 2024 to just 10,000-40,000 jobs a month in the second half of 2025.

But it's not purely a "shortage" story — some economists push back

Not everyone agrees the labor market impact is straightforwardly a shortage. Minneapolis Fed researchers found that the 2025 decline in employment growth is larger than what would be expected from the direct effect of declining net migration, and there has been a significant decline in real wage growth—consistent with weakening demand beyond just the immigration effect. This suggests other factors (weaker overall demand, business uncertainty) are also at play, not just labor supply constraints.

There's also a demand-side wrinkle: immigration doesn't just add to labor supply but to demand as well, so businesses experience a reduction in net immigration both as a reduction in labor supply and as a reduction in demand for their goods and services — meaning some of the "shortage" gets offset by weaker demand for goods/services.

Real-world consequences already visible

Bottom line

The weight of current evidence and economic research indicates that sharply reducing immigration does create real labor shortages in specific labor-intensive industries — agriculture, construction, hospitality, caregiving, and food processing chief among them — because these sectors have structurally relied on immigrant workers for physically demanding or seasonal work that native-born workers often don't fill even at higher wages. However, the aggregate economic effect isn't purely negative-for-shortage; it also slows overall demand and GDP growth, and some economists argue other factors (demand weakness, business uncertainty) explain part of the labor market slowdown too. Some sectors are already responding with policy fixes (expanded H-2A/H-2B visa access) as short-term relief valves rather than proof there's no shortage.