Will stopping immigration cause labor shortages?
Short answer: Often yes, especially in certain sectors — but the effects are complicated and not uniform across the whole economy.
Evidence from current U.S. experience (2025)
Recent immigration restrictions in the U.S. provide a live case study. Immigrants comprise approximately one-fifth of the U.S. labor force, and the reduction of the foreign-born population has had significant repercussions for employment, industry stability, and economic output, as approximately 1.2 million foreign-born workers left the labor force.
This has hit specific industries hard. Job growth among industries that rely more heavily on undocumented immigrants has been "significantly weaker" than in the rest of the private sector, with growth in hotels, restaurants, construction and home health aides flat since the start of 2025 — 0% in July. More broadly, the decline in the foreign-born population has reshaped the U.S. labor market, creating challenges for industries that heavily depend on immigrant workers, with key sectors experiencing significant labor shortages affecting production, service delivery, project timelines, and consumer prices.
Concrete price effects have already appeared: agricultural shortages have led to unharvested produce and higher costs, while hotel and restaurant staffing difficulties pushed restaurant food costs up 3% and hotel room costs up 2.6% between December 2024 and September 2025.
Sectoral dependence is significant — immigrants represent around 37% of the workforce in farming, forestry, and fishery (41% undocumented, 23% documented in agriculture alone), and approximately 34% of the construction and extraction workforce.
Broader economic modeling
Analysis projecting forward suggests sustained large-scale removal of workers would shrink the overall labor force: mass deportations of unauthorized workers of 1 million individuals per year for four years would contribute to labor shortages, and by 2027 result in a net labor force shrinkage. This matters because immigration is the driving force behind America's labor supply growth, accounting for about half of labor force growth each year for the past three decades and an even larger share in recent years.
But the picture is more nuanced — history and research show mixed/limited native wage gains
Despite predictions that restricting immigration would boost opportunities for native workers, historical and empirical research often finds otherwise. A study of the 1920s U.S. border closures found: US-born workers in areas losing immigrants did not benefit relative to workers in less exposed areas; instead, in urban areas, European immigrants were simply replaced with internal migrants and immigrants from Mexico and Canada. Interestingly, farmers shifted toward capital-intensive agriculture, and the immigrant-intensive mining industry contracted — meaning some shortages were resolved not by hiring more native workers, but by automating or shrinking the industry.
More recent research on immigration enforcement echoes this: a study of the Secure Communities program found that enforcement decreased employment of likely undocumented immigrants, and importantly also decreased the employment and hourly wages of US-born individuals — driven by an increase in labor costs that decreases job creation and a reduction in local consumption.
A comprehensive review of the literature concludes that the 2017 National Academies of Sciences, Engineering, and Medicine report concludes that the long-term impact of immigration on the wages and employment of native-born workers overall is very small. Similarly, economic theory suggests that the impact of immigration overall on the economy is likely to be small, with any negative effects dissipating over the longer term as the economy adjusts to a larger labor supply — implying the reverse (restricting immigration) may also have muted long-run effects on native wages, even as it disrupts specific sectors in the near term.
Bottom line
Cutting immigration tends to create real, measurable shortages in specific labor-intensive industries — agriculture, construction, hospitality, health care, and manufacturing — where immigrants make up a disproportionate share of workers. These shortages show up quickly as slower job growth, unfilled positions, and rising consumer prices. However, over the longer run, economies often adapt through automation, capital investment, shifts in production methods, or internal migration — meaning restricting immigration doesn't reliably translate into large wage gains for native workers, and can even reduce native employment and wages in the near term due to higher costs and weaker local demand.
Citations (14)
- 1 U.S. Workforce Challenges: How Immigration Enforcement Is Impacting
Source excerpt: “Immigrants comprise approximately one-fifth of the U.S. labor force. Consequently, the · reduction of the foreign-born population has had significant ...”
statistic, official document, points to yes. Claim: Immigrants comprise about one-fifth of the U.S. labor force, and the foreign-born population's decline has significant repercussions for employment and output.
- Trump immigration policy may be shrinking labor force, economists say
Source excerpt: “For example, job growth among industries that rely more heavily on undocumented immigrants has been "significantly weaker" than in the rest of the pri...”
evidence, article, points to yes. Claim: Job growth in industries relying on undocumented immigrants has been significantly weaker than the rest of the private sector, flat in hotels, restaurants, construction, home health.
- 1 U.S. Workforce Challenges: How Immigration Enforcement Is Impacting
Source excerpt: “The decline in the foreign-born population since January 2025, reflecting increased · interior immigration enforcement and deportations as well as a r...”
statistic, official document, points to yes. Claim: About 1.2 million foreign-born workers left the labor force since January 2025 amid increased enforcement and deportations.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “Because agricultural production is highly time-sensitive, shortages often result in a significant share of edible produce going unharvested, increasin...”
evidence, article, points to yes. Claim: Agricultural shortages lead to unharvested produce and higher costs.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “As a consequence, the cost of food in restaurants increased 3% between December 2024 and September 2025. Similarly, the cost of staying at hotel and m...”
statistic, article, points to yes. Claim: Restaurant food costs rose 3% and hotel costs 2.6% between December 2024 and September 2025.
- Leverage Immigration to Address US Labor Shortages | Baker Institute
Source excerpt: “For example, they represent around 37% of the workforce in farming, forestry, and fishery. More detailed analysis shows that, in the agricultural sect...”
statistic, article, points to yes. Claim: Immigrants are around 37% of workforce in farming, forestry and fishery, with high undocumented share in agriculture.
- Responding to US Labor Shortages
Source excerpt: “Analysis from the Economics, Strategy & Finance Center of The Conference Board indicates that mass deportations of unauthorized workers of 1 million i...”
evidence, article, points to yes. Claim: Mass deportations of 1 million unauthorized workers per year for four years would contribute to labor shortages and net labor force shrinkage by 2027.
- Immigrants Make the Labor Market Great - Center for American Progress
Source excerpt: “Immigration is the driving force behind America’s labor supply growth, accounting for about half of labor force growth each year for the past three de...”
statistic, article, points to yes. Claim: Immigration accounts for about half of labor force growth each year for three decades.
- The Effect of Immigration Restrictions on Local Labor Markets: Lessons from the 1920s Border Closure - American Economic Association
Source excerpt: “US-born workers in areas losing immigrants did not benefit relative to workers in less exposed areas. Instead, in urban areas, European immigrants wer...”
evidence, article, points to no. Claim: After 1920s border closures, US-born workers in affected areas did not benefit; immigrants were replaced by internal migrants and Mexican and Canadian immigrants.
- The Effect of Immigration Restrictions on Local Labor Markets: Lessons from the 1920s Border Closure - American Economic Association
Source excerpt: “By contrast, farmers shifted toward capital-intensive agriculture, and the immigrant-intensive mining industry contracted. ”
evidence, article, neutral. Claim: Farmers shifted toward capital-intensive agriculture and immigrant-intensive mining contracted, resolving shortages through automation or shrinking.
- The Labor Market Effects of Immigration Enforcement | Journal of Labor Economics: Vol 41, No 4
Source excerpt: “Using variation in implementation across local areas and over time, we find that SC decreased the employment of likely undocumented immigrants. ”
evidence, article, points to yes. Claim: Secure Communities enforcement decreased employment of likely undocumented immigrants.
- The Labor Market Effects of Immigration Enforcement | Journal of Labor Economics: Vol 41, No 4
Source excerpt: “Importantly, SC also decreased the employment and hourly wages of US-born individuals. We provide support for two mechanisms that could explain this d...”
evidence, article, points to yes. Claim: Enforcement also decreased employment and hourly wages of US-born individuals via higher labor costs and reduced consumption.
- Immigration Restrictions and Labor Market Impacts
Source excerpt: “Comprehensive reviews, including the 2017 National Academies of Sciences, Engineering, and Medicine report The Economic and Fiscal Consequences of Imm...”
attribution, article, neutral. Claim: The 2017 National Academies report concludes immigration's long-term impact on native wages and employment is very small.
- Labor Market Impacts | migrationpolicy.org
Source excerpt: “Economic theory suggests that the impact of immigration overall on the economy is likely to be small and for any negative effects to dissipate over th...”
evidence, reference entry, neutral. Claim: Economic theory suggests immigration's overall economic impact is small, with negative effects dissipating over time as the economy adjusts.