Will stopping immigration cause labor shortages?

Yes — In Many Cases, Reduced Immigration Can Cause or Worsen Labor Shortages

The evidence strongly suggests that stopping or sharply reducing immigration does contribute to labor shortages, particularly in specific sectors and in countries facing demographic pressures like aging populations and low birth rates. Here's what the data shows:

Real-World Evidence from 2025 U.S. Immigration Restrictions

The U.S. offers a live case study. Strict immigration policies implemented in 2025 have sharply reduced net immigration flows, with some analyses indicating that for the first time in at least half a century more immigrants left the United States than entered. According to DHS figures, nearly 3 million left the U.S. in 2025, with 2.2 million "self-deporting" while some 675,000 were removed by law enforcement.

The sector-specific impacts have been significant:

Agriculture: Foreign-born workers account for roughly two-thirds of the hired crop labor force, and enforcement actions and reduced inflows have led to slower hiring, higher reliance on the H-2A temporary visa program, and reports of crops left unharvested or fields idled in some regions.

Construction: Immigrants represent approximately 30 to 36 percent of the construction workforce in recent years, and the construction industry is facing an unprecedented workforce crisis in 2025, with immigration enforcement policies now a primary driver of labor shortages across major markets.

Hospitality and food service: Hotels and restaurants in major tourist destinations have long relied on immigrant labor, and combined effects of increased deportations and reduced migration have made staffing significantly more difficult, resulting in reduced capacity and higher operating costs. This has translated to price increases — the cost of food in restaurants increased 3% between December 2024 and September 2025.

Broader economic projections: One study found 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. Economists interviewed by CNBC noted that a sustained decline in the size of the labor force would be a concern, and a smaller labor pool might put pressure on employers to raise wages to attract talent, potentially exacerbating inflation.

Why This Happens: Demographic Context Matters

The impact is especially pronounced because of underlying demographic trends. Foreign-born workers made up 19.2% of the US workforce in 2024, the highest share since the Bureau of Labor Statistics began tracking in 1996. This matters because between 2000 and 2022, the foreign born accounted for nearly three-quarters of all growth in the civilian, prime-age labor force, and as the U.S. population ages and more U.S.-born residents enter retirement, immigration will become increasingly important for driving labor force growth.

Similarly, without immigration, the U.S. population would shrink starting in 2033, partly because fertility rates are projected to remain low, according to the nonpartisan Congressional Budget Office. An AEI economist put it bluntly: "If we want the type of economic growth that we historically consider successful, then the demographic reality is that we're going to have to increase inflows of immigrants. There's no real way around that."

The Broader Economic Consensus

It's worth noting that mainstream economic research generally views immigration as a net positive for host economies. A strong body of research and consensus by most economists finds that immigration, on balance, is a net positive for the U.S. economy. Historically, economists generally agree that the effects of immigration on the U.S. economy are broadly positive — immigrants are unlikely to replace native-born workers or reduce their wages over the long-term, though they may cause some short-term dislocations in labor markets.

This aligns with international patterns too — Canada, for example, has explicitly used immigration targets envisioning a flood of new arrivals, rising to 500,000 in 2025, with a heavy emphasis on admitting people based on work skills or experience specifically to address labor shortages.

Bottom Line

Stopping immigration doesn't automatically cause labor shortages everywhere or in every economy — the effect depends on a country's demographic trends, birth rates, and how reliant specific industries are on immigrant labor. But in economies like the current U.S., with an aging population, declining birth rates, and heavy sectoral dependence on immigrant workers (agriculture, construction, hospitality, healthcare), the 2025 experience shows that sharp immigration restrictions can indeed create measurable labor shortages, drive up wages and prices, and slow overall economic growth. As one analysis summarized: while restrictions may deliver symbolic or narrowly targeted political benefits, the evidence indicates they exacerbate labor shortages in key sectors, offer at best negligible or uneven wage gains for native workers, and intensify demographic pressures from population aging.