Will stopping immigration cause labor shortages?
Yes, stopping or sharply reducing immigration is likely to cause or worsen labor shortages in many sectors and constrain overall labor force growth, particularly in countries like the US with low native fertility rates and aging populations. This is the consensus from economic analyses, demographic projections, recent empirical studies, and real-world observations. Effects vary by skill level, sector, and time horizon, with some potential localized wage gains for certain native workers, but broader evidence points to net economic costs including firm disruptions, slower GDP growth, and reduced employment opportunities even for natives due to complementarities.[1][2][3]
Demographic and Labor Force Context
Native-born working-age populations in the US (and many developed economies) are stagnating or shrinking due to fertility rates well below replacement (e.g., ~1.6 in the US). Immigrants have driven nearly all recent US labor force growth—and a large share historically—because they are younger on average and have higher labor force participation rates.[2][4][5]
Stopping inflows (or large-scale removals) directly shrinks labor supply in a context of ongoing demand for workers in services, care, building, and production.
Sector-Specific Shortages and Evidence
Immigrants disproportionately fill physically demanding, lower-wage, or less desirable jobs that many natives avoid even at higher wages. Sudden stops create bottlenecks:
High-skilled immigration shortfalls hurt innovation, STEM, and entrepreneurship (immigrants punch above weight in patents, startups, and Nobel prizes).
Why Natives Often Do Not Fully Replace Immigrants
Meta-analyses and major studies generally find small or positive net effects of immigration on native wages/employment overall (small negatives possible for prior low-skilled immigrants or the least-educated natives in the short run; positives from growth and task upgrading).[18][19]
Economic Growth and Broader Impacts
Reduced immigration lowers potential GDP growth (e.g., estimates of 0.2–0.4+ percentage points annually lower, or trillions in cumulative losses; slower job growth sustainable without shortages). It weighs on debt sustainability (fewer workers supporting retirees) and can raise inflation via supply constraints in the short run, though demand also falls.[3][4][1]
Modest localized benefits (e.g., slightly tighter markets or budgets for low-education natives) are narrow and do not offset aggregate losses. 1920s US restrictions coincided with wage gains and the Great Migration in a very different (high-growth, industrialization) era, but modern evidence from sudden stops and complementarities is more cautionary.
Bottom Line and Caveats
Complete cessation would almost certainly produce shortages in immigrant-reliant sectors, slower overall employment/GDP growth, and firm-level disruptions—outcomes already visible in recent restriction data and confirmed by natural experiments. Partial reductions have milder but directionally similar effects. Automation, higher native participation (e.g., via policy), reskilling, or selective high-skill inflows could mitigate some issues, but demographics make sustained broad immigration a key lever for labor supply in aging societies. Outcomes depend on the scale/speed of the stop, enforcement details, economic conditions, and complementary policies. Economists across institutions (NBER, Brookings, CBO, Fed-related, EPI, etc.) largely align on the labor supply and growth risks.
Citations (19)
- https://www.deloitte.com/us/en/insights/topics/economy/spotlight/us-immigration-impact-us-economy.html
Backs: “Effects vary by skill level, sector, and time horizon, with some potential localized wage gains for certain native workers, but broader evidence points to net economic costs including firm disruptions, slower GDP growth, and reduced employment opportunities even for natives due to complementarities.”
- https://econofact.org/immigration-and-waning-us-labor-force-growth
Backs: “Effects vary by skill level, sector, and time horizon, with some potential localized wage gains for certain native workers, but broader evidence points to net economic costs including firm disruptions, slower GDP growth, and reduced employment opportunities even for natives due to complementarities.”
- https://www.epi.org/publication/the-u-s-born-labor-force-will-shrink-over-the-next-decade-achieving-historically-normal-gdp-growth-rates-will-be-impossible-unless-immigration-flows-are-sustained/
Backs: “Effects vary by skill level, sector, and time horizon, with some potential localized wage gains for certain native workers, but broader evidence points to net economic costs including firm disruptions, slower GDP growth, and reduced employment opportunities even for natives due to complementarities.”
- https://www.forbes.com/sites/andrewtisch/2026/05/28/the-real-immigration-tragedy/
Backs: “Immigrants have driven nearly all recent US labor force growth—and a large share historically—because they are younger on average and have higher labor force participation rates.”
- https://theconversation.com/us-and-european-economies-depend-heavily-on-immigrants-decades-of-data-reveal-just-how-much-261508
Backs: “Immigrants have driven nearly all recent US labor force growth—and a large share historically—because they are younger on average and have higher labor force participation rates.”
- https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/
Backs: “Recent sharp declines in net migration (e.g., from millions to near-zero or negative in some 2025–2026 estimates) have already coincided with much slower payroll growth (e.g., averages dropping from ~166,000/month to ~29,000 in late periods) and a lower “breakeven” job growth rate needed to keep unemployment stable…”
- https://www.brookings.edu/articles/macroeconomic-implications-of-immigration-flows-in-2025-and-2026-january-2026-update/
Backs: “Recent sharp declines in net migration (e.g., from millions to near-zero or negative in some 2025–2026 estimates) have already coincided with much slower payroll growth (e.g., averages dropping from ~166,000/month to ~29,000 in late periods) and a lower “breakeven” job growth rate needed to keep unemployment stable…”
- https://www.washingtonpost.com/opinions/2026/04/14/immigration-crackdown-causes-massive-shortages-unskilled-labor/
Backs: “The US Labor Department has noted risks of food shortages from halting unauthorized inflows, as unemployed Americans are unlikely to fill agricultural roles in sufficient numbers.”
- https://www.wgbh.org/news/local/2026-05-18/we-could-not-farm-without-them-small-mass-farms-face-immigration-and-labor-pressures
Backs: “The US Labor Department has noted risks of food shortages from halting unauthorized inflows, as unemployed Americans are unlikely to fill agricultural roles in sufficient numbers.”
- https://www.nber.org/digest/202606/what-happens-when-flow-immigrant-workers-suddenly-stops
Backs: “Natives at surviving firms experienced wage declines from being reassigned to lower-skilled tasks (complementary roles). Firms demanded more guest workers.”
- https://www.library.hbs.edu/working-knowledge/history-check-how-barring-immigrants-backfired-in-1880s-america
Backs: “Barring Chinese laborers reduced their availability sharply, leading to large drops in manufacturing output (e.g., ~62%), fewer establishments, and lower wages/employment in affected Western areas as firms struggled to replace them.”
- https://www.brookings.edu/articles/the-labor-market-impact-of-deportations/
Backs: “Recent US data under tighter policies show native unemployment not falling (sometimes rising) and no clear boom in native employment or participation as foreign-born numbers drop.”
- https://newsletter.mikekonczal.com/p/can-we-find-literally-any-sign-deportations
Backs: “Recent US data under tighter policies show native unemployment not falling (sometimes rising) and no clear boom in native employment or participation as foreign-born numbers drop.”
- https://www.forbes.com/sites/stuartanderson/2026/02/22/new-research-finds-reducing-immigration-does-not-help-us-workers/
Backs: “Recent US data under tighter policies show native unemployment not falling (sometimes rising) and no clear boom in native employment or participation as foreign-born numbers drop.”
- https://www.washingtontimes.com/news/2026/may/20/study-finds-no-evidence-citizens-taking-jobs-vacated-trump/
Backs: “Recent US data under tighter policies show native unemployment not falling (sometimes rising) and no clear boom in native employment or participation as foreign-born numbers drop.”
- https://cepr.org/publications/dp21301
Backs: “Scale effects (immigrants expand firms via labor + their own consumption/demand) often dominate substitution.”
- https://www.piie.com/blogs/realtime-economics/2026/firms-allowed-hire-immigrant-manual-laborers-expand-hire-more
Backs: “Scale effects (immigrants expand firms via labor + their own consumption/demand) often dominate substitution.”
- https://www.epi.org/publication/u-s-benefits-from-immigration/
Backs: “Meta-analyses and major studies generally find small or positive net effects of immigration on native wages/employment overall (small negatives possible for prior low-skilled immigrants or the least-educated natives in the short run; positives from growth and task upgrading).”
- https://carnegieendowment.org/files/Effect-of-Low-Skilled-Labor-Working-Paper-1.pdf
Backs: “Meta-analyses and major studies generally find small or positive net effects of immigration on native wages/employment overall (small negatives possible for prior low-skilled immigrants or the least-educated natives in the short run; positives from growth and task upgrading).”