Will stopping immigration cause labor shortages?

Will halting immigration create labor shortages? I'll gather evidence on how immigration affects workforce supply and key industries.

Yes, evidence strongly suggests that stopping - or sharply curtailing - immigration would cause or worsen labor shortages in most developed economies, particularly the United States and Europe.

1. Immigration is now the primary driver of labor force growth

In the U.S., immigrant workers accounted for 84.7% of labor force growth between 2019 and 2024

Immigrants constituted 18.6% of the U.S. civilian labor force in 2023 and, over the longer term, accounted for 84.7% of that growth.

Without the 2022-2024 immigration surge, the U.S. working-age population would have been shrinking. 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

Demographics make this structural:

•Working-age population growth averaged 2 million annually from 1971–2010, then decelerated as baby boomers retired. 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

•Even with immigration levels matching the 2010–2019 decade, working-age population growth would hit a historically low 550,000 annually due to aging demographics and flat birth rates from 20 years ago

•The United States needs net immigration of at least 280,000 per year through 2028 to prevent declines in the working-age population

•With 3.6 million U.S.-born residents turning 20 versus 3.3 million turning 65—a net difference of just 300,000— today’s tight labor market stems from family decisions made decades ago

The U.S. Census Bureau projects that if there were suddenly zero immigration, the population would begin to decline next year, deeply harming economic growth.

2. Modelled impacts of stopping / restricting immigration

Analyses of recent restrictive policies project large contractions:

•Restrictions on both legal and illegal immigration have reduced the labor force by an estimated 6.8 million workers by 2028, with 4 million attributed to crackdowns on undocumented immigration and 2.8 million linked to changes in legal immigration rules

•NFAP forecasts a 6.8 million reduction in the U.S. workforce by 2028 and 15.7 million by 2035 driven by tightened legal and illegal immigration policies

•Another projection finds the CBO projects that reduced immigration will shrink the labor force by 15 million jobs by 2035, slowing annual economic growth to 1.3% from 1.8% between 2025 and 2035

Evidence-based conclusion: Tightened immigration controls are directly linked to growing labor shortages in key sectors of the U.S. economy

The Federal Reserve Bank of Kansas City also found reduced immigration exacerbated labor shortages. For example, industries such as construction, leisure and hospitality, and other services had an above-average share of foreign workers in 2015 and experienced an above-average increase in job vacancy rates from 2016 to 2021

3. Which sectors are most exposed?

Labor shortages are growing in sectors that rely heavily on immigrant workers, including agriculture, construction, food service, healthcare, and transportation

More detail:

•Nationally, 30 percent of construction workers are foreign born

•Other estimates put immigrant shares at 25% of construction labor, 66% of agriculture workers, and 15–28% of healthcare staff

•Labor shortages are growing in sectors that rely heavily on immigrant workers, including agriculture, construction, food service, healthcare, and transportation, with concrete effects: fewer workers for planting and harvesting, delays and higher costs for building projects, shortages in kitchens, fewer nurses and support staff

The Department of Labor itself admitted in an Oct 2 Federal Register filing: "The near total cessation of the inflow of illegal aliens combined with the lack of an available legal workforce results in significant disruptions to production costs and (threatens) the stability of domestic food production and prices for U.S consumers"

4. International evidence: Brexit in the UK

The UK provides a natural experiment after ending free movement:

•A report by the British Parliament concluded that chronic labor shortages had persisted in sectors such as hospitality, food services, and construction following Brexit

•Brexit has led to a shortfall of 330,000 people in the UK labour force, mostly in the low-skilled economy

•In 2024, Brexit had reduced EU-born workers by about 785,000, or 2.3 per cent of the labour force

•Researchers: “There is some evidence that the end of free movement of workers has contributed to shortages in various areas of the UK labor market”

•Despite a shift to non-EU recruitment, England's NHS physician vacancies increased by an estimated 383 positions, while overall nurse immigration declined

5. Could native-born workers fill the gap?

Most economic research finds limited substitution:

•Results indicate that immigration does not increase US natives’ unemployment or reduce their labor force participation. Instead, having more immigrants reduces the unemployment rate and raises the labor force participation rate of US natives within the same sex and education group

•Contrary to campaign rhetoric, there is no clear evidence that immigration has brought forth a decline in native-born employment or labor force participation

•Absent immigration, positions in these industries would likely go unfilled or disappear due to labor shortages, which would hurt economic growth

•Studies note native and foreign-born workers tend to work in different industries that require separate skillsets

Proponents of restrictions point to short-term wage gains — the White House highlights that real wages for U.S.-born workers have increased by $700 under Trump's policies, and Q3 2025 wage growth reached 3.8%— but Deloitte and Senate analyses note these are driven by labor shortages raising costs and inflationary pressures.

Some economists argue automation, offshoring, higher wages to attract natives, or increased labor force participation among youth, women and older workers could partially offset shortages, but with aging populations - the global population aged 65 and over is projected to increase from 730 million in 2020 to 1.5 billion by 2050— demographics limit that potential. Immigration helps counteract labor shortages and supports economic growth by providing a younger workforce

Bottom line

•In an aging, low-birth-rate economy, stopping immigration would almost certainly cause aggregate labor shortages and a shrinking workforce within a few years, not just sectoral tightness.

•Effects are uneven: agriculture, construction, hospitality, health/ elder care, logistics and transportation would be hit first and hardest, with regional hotspots in states/cities heavily reliant on foreign-born workers.

•Completely stopping immigration is more severe than modest reductions, but even reducing net immigration below ~280,000 per year in the U.S. would cause the working-age population to decline.

Economists broadly conclude a balanced approach is needed: enforcement alone, without legal channels for workers, risks higher prices, reduced output, and slower GDP growth, while managed immigration mitigates demographic-driven shortages.

Citations (3)

1ainvest.comNot yet classified
Assessing the Impact of Trump's Hardline Immigration and Border Policies on U.S. Labor and Consumer Markets
Backs: “Yes, evidence strongly suggests that stopping - or sharply curtailing - immigration would cause or worsen labor shortages in most developed economies, particularly the United States and Europe. 1. Immigration is now the primary driver of labor force growth”
2pwc.comCompanies
Demographic shifts and housing market impacts: PwC
Backs: “Demographics make this structural: Working-age population growth averaged 2 million annually from 1971–2010, then decelerated as baby boomers retired. A 2021–2023 immigration surge temporarily boosted growth, but sharp immigration curtailment in 2024–2025 plus continued retirements drive working-age population growth…”
3visaverge.comCommercial content
Will US Immigration Restrictions Lead to a Shrinking Workforce?
Backs: “Another projection finds the CBO projects that reduced immigration will shrink the labor force by 15 million jobs by 2035, slowing annual economic growth to 1.3% from 1.8% between 2025 and 2035. Evidence-based conclusion: Tightened immigration controls are directly linked to growing labor shortages in key sectors of…”