Will stopping immigration cause labor shortages?

Stopping immigration raises labor-shortage questions — I'll gather the latest evidence on workforce impacts.

Short answer: Yes - in most economic research - stopping or sharply reducing immigration would cause labor shortages, especially over time and in specific sectors, though the effect may be delayed if overall labor demand is weak.

1. The US workforce depends on immigration to grow at all

Without immigration, the U.S. working-age population (16-64):

> would have started to decline in 2012

The San Francisco Fed estimates:

> The inflow of native-born 16-year-olds into the working-age population will decline from 4.2 million to 3.6 million by 2040

and

> growth in the working-age population without immigration has fallen below zero, reflecting slowing birth rates and the aging of baby boomers. We project that, without immigration, working-age population growth is likely to be negative through at least 2040

> without immigration, prime-age labor force growth will likely continue to slow and turn negative around 2042

Under a scenario of zero immigrant population growth, growth

> is positive and rising only until 2031; after that it declines, turning negative after 2043

In 2025, the Fed estimates net international migration will be

> close to half a million people in 2025, down from 2.2 million in 2024

They project

> baseline 2025 NIM to be close to 500,000, less than one-fourth its size in 2024

That

> is not large enough to offset this decline

in the native-born working-age population of an estimated 740,000 between 2024 and 2025.

Other analysis notes:

> A 2021–2023 immigration surge temporarily boosted growth, but sharp immigration curtailment in 2024–2025 plus continued retirements drive working-age population growth to near-1970 lows, risking future labor shortages

Reason: birth rates at a record low and baby boomers reaching retirement age and the Federal Reserve Bank of San Francisco found the working-age population would have likely started shrinking over a decade ago if not for immigration

2. Shortages are concentrated in specific industries

Oxford Economics finds

> Private households, landscaping and building services, and crop production are the industries most exposed to reduced labor supply

More broadly,

> unauthorized immigrants make up nearly 6% of the labor force, but their share of the workforce is at least double the national average in dozens of industries. The privatehouseholds subsector is by far the most dependent on undocumented labor; it includes maids, nannies, personal care aides, and outdoor workers such as gardeners. Crop production and construction also rank among the mostexposed industries

Bloomberg data compilation shows

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

Federal Reserve Bank of Kansas City research for 2016-2021 found:

> U.S. labor markets are currently experiencing unprecedented labor shortages. Reduced immigration flows in recent years have contributed to these labor supply shortages

> industries that had a larger share of foreignborn workers in 2015 tended to experience more significant increases in job vacancy rates from 2016 to 2021, suggesting that reduced immigration exacerbated labor shortages

And:

> industries with an aboveaverage share of foreignborn workers in 2015 experienced more considerable earnings growth

Construction, leisure and hospitality, and other services had an above average share and experienced an above average increase in vacancy rates

3. Would native-born workers fill the gap?

Recent evidence says not easily:

> Economists say the disconnect reflects a structural mismatch: In many labor-intensive roles that rely heavily on immigrants, employers can’t easily replace them with American workers

One year into an immigration crackdown:

> there’s little evidence that closed borders are boosting employment for US-born workers

> 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

> The US-born unemployment rate has been going up. The US-born labor force participation rate has dropped

> we don’t see any sign of the US-born workers getting more employment because of that

National Bureau of Economic Research research found:

> We show that heightened ICE activity is harming the labor market overall, and we find no evidence that it is benefiting U.S.-born workers

> Areas that experienced particularly large increases in Immigration and Customs Enforcement arrests saw a decline in work among US-born male workers... researchers also saw no evidence that employers increased wages to attract US-born workers to fill roles

4. Why shortages haven't appeared everywhere yet

Oxford Economics July 2026 briefing:

> The crackdown on unauthorized immigration has the potential to tighten labor market conditions, but our analysis shows this has yet to unfold. Job openings and unemployment rates in highexposure industries and geographies show little divergence

They find

> We find little evidence of tightening labor market conditions, though that could just be a matter of time

Reasons: lags between migration and joining labor force

> tailwind to labor supply from immigrants who entered the country from 2021-2024 will progressively fade, with the net contribution turning negative in 2026. If demand for workers picks up, that would leave the labor market more constrained by stricter immigration policies

And currently weak labor demand - job openings were at the lowest level since 2020 and most measures indicate wage growth decelerating - masks the supply constraint.

The Kansas City Fed also noted reduced immigration raises costs in industries like direct care (more than 25 percent of direct care workers were foreign born) which can cause other workers to exit labor force to provide care

5. Long-run economic "speed limit"

Economists quoted by Bloomberg call shrinking labor pool

> a potential "speed limit" for the economy... you could see that labor demand picks up a bit, and then some of those shortages could be revealed

The San Francisco Fed warned that

> Continued low levels of immigration would lead to decreases in the total prime-age labor force

In sum, stopping immigration would not create immediate massive unemployment-driven shortages in a cooling economy, but with native births insufficient to replace retirees, it would shrink the overall labor force, exacerbate vacancy and wage pressures in agriculture, construction, hospitality, health care, and private household services, and would not automatically translate into more jobs or higher employment for native-born workers.