Will stopping immigration cause labor shortages?

Will halting immigration tighten the labor market? I'll pull recent research on the link to shortages.

Yes - according to the preponderance of economic research, stopping immigration would cause and exacerbate labor shortages, particularly in the United States given current demographics - though the effects would be uneven across sectors, time horizons and regions.

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

•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.

•The Bank's 2025 Economic Letter estimated more precisely: without new immigration, the U.S. working-age population ages 16 to 64 would have started to decline in 2012. Since then, growth in the working-age population without immigration has fallen below zero, reflecting slowing birth rates and the aging of baby boomers.

Native-born population dynamics cannot replace it:

•The Federal Reserve Bank of Dallas concluded: "Less immigration doesn't necessarily mean higher or lower unemployment, but it will likely result in slower economic growth... The U.S.-born workforce cannot make up for reduced immigration due to demographic pressures, including an aging population and low birth rates"

•Native-born labor supply growth has flattened, as the fertility rate — around 1.6 births per woman — has sat below the 2.1 replacement threshold for over fifteen years. Net migration historically offset this

•Foreign-born individuals have a higher labor force participation rate than native-born individuals

Without the immigration surge of 2022-2024, the U.S. working-age population would have been shrinking, and the prime-age labor force grew in large part because of immigration. Immigrants accounted for 84.7% of labor force growth since 2019

Projections:

•A National Foundation for American Policy forecast is 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

•Similarly, the San Francisco Fed estimates that its 2025 net international migration projection of close to 500,000 is less than one-fourth its size in 2024 and is not large enough to offset an estimated decline of 740,000 in the native-born working-age population between 2024 and 2025

2. Direct link to labor shortages

•"Tightened immigration controls are directly linked to growing labor shortages in key sectors of the U.S. economy"

•"Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks"

•The same finding is summarized as: Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks

Recent evidence in 2025:

•Payroll growth averaged just 29,000 jobs per month between October and December 2025, down sharply from 166,000 per month in 2024

•The economy lost about 1.2 million foreign-born workers as of August 25, 2025 after executive orders, expanded detention and visa restrictions

3. Sectoral concentration

Shortages would not be uniform. The U.S. labor market faces a growing crisis as restrictive immigration policies exacerbate shortages in sectors reliant on immigrant workers — construction, agriculture, and healthcare. With immigrant workers comprising 25% of construction labor, 66% of agriculture workers, and 15–28% of healthcare staff

Other reports put foreign-born share as:

•24% of workers in residential care, 21% in nursing facilities, and 32% to 40% in home care in 2023

•About a fifth of the US labor market in 2024, and approximately one-fifth of the U.S. labor force comprised of noncitizen workers

Labor shortages are growing in sectors that rely heavily on immigrant workers, including agriculture, construction, food service, healthcare, and transportation, producing missed harvests, delayed construction, staffing gaps and slower payroll gains

A construction industry survey found 45% reported project delays attributable to ICE-related labor shortages, and one in five reported subcontractors had lost staff directly

A National Immigration Forum review noted restrictive policies have already led to labor shortages in key sectors such as agriculture, healthcare, construction, and hospitality

4. Why native-born workers do not simply fill the gap

Economic literature finds immigrants and native-born workers are often complements, not close substitutes:

•Arguments in favor of stringent immigration — that less immigration will mean more opportunities for native-born workers — rely on the faulty premise that immigrants and native-born workers compete for the same jobs as close substitutes

•"There is no clear evidence that immigration has brought forth a decline in native-born employment or labor force participation"

•Studies of historical deportations - including the bracero exclusion in 1964 - found jobs previously filled by seasonal immigrant workers were either replaced by machines or eliminated entirely, not filled by native-born workers at higher wages, and Secure Communities enforcement deporting roughly 454,000 undocumented immigrants between 2008 and 2014 was found to reduce the employment share of native-born workers

•A recent National Bureau of Economic Research study found increased immigration arrests led to 4 to 5% lower employment of undocumented immigrants, with no gains for U.S.-born men without a college degree

5. Counterarguments and nuance

Not all analysts agree the effect is entirely negative:

•Some economists argue availability of cheaper immigrant labor can delay automation and productivity gains, citing the automation of tomato picking after the 1964 termination of the Bracero Program

•A minority view argues "immigration as a labor supplier is similarly outdated" given automation and AI, and that falling birthrates arguments are less convincing in the face of accelerated automation

•The consensus review also notes negative employment impacts are limited to some lower-skilled native workers, including teenagers, but on average immigrants have a null or even positive impact on native-born employment

Analysts agree immigration curbs have measurably tightened labor supply in specific sectors; they disagree on whether the net economic effect is corrosive or corrective

Bottom line

In a country with an aging population, sub-replacement fertility, and a shrinking native-born working-age population, stopping immigration would not create a large pool of available native-born workers to fill vacancies. Fed and CBO-connected modeling suggests the working-age population would decline and prime-age labor force growth would turn negative - as early as 2035 under high-deportation scenarios - leading to persistent shortages in labor-intensive, lower-wage and care sectors, slower GDP growth, and higher prices for immigrant-dependent goods and services, rather than lower unemployment for native-born workers.

Citations (3)

1frbsf.orgGovernment
Immigration and Changes in Labor Force Demographics - San Francisco Fed
Backs: “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. The Bank's 2025 Economic Letter estimated more precisely: without new immigration, the U.S.”
2equitablegrowth.orgNonprofits and think tanks
Economic research shows immigration is good for U.S. workers, the economy, and affordability
Backs: “"Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks". The same finding is summarized as: Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and…”
3forumtogether.orgNonprofits and think tanks
The Consequences of Net Negative Migration in 2025: Implications for the U.S. Economy, Workforce, and Global Competitiveness - National Immigration Forum
Backs: “The same finding is summarized as: Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks. Recent evidence in 2025: Payroll growth averaged just 29,000 jobs per month between October and December 2025, down sharply from 166,000…”