Will stopping immigration cause labor shortages?
Yes, stopping immigration entirely (or sharply curtailing it) would cause or significantly worsen labor shortages in many sectors and constrain overall economic growth, particularly in countries like the United States with aging populations and below-replacement fertility. This is supported by demographic projections, economic studies, and evidence from actual immigration restrictions. Immigrants are not perfect substitutes for native workers; they often complement them, fill roles natives are less willing or able to take, expand the economic pie (creating demand and jobs), and drive nearly all recent labor force growth.[1]
Demographic Reality
In the US (and many other developed economies), the native-born working-age population (roughly ages 20–64) is stagnating or set to shrink due to low fertility rates (below the ~2.1 replacement level for decades) and retiring Baby Boomers. Immigration has been the primary or sole driver of labor force and population growth in recent years.[1]
Without immigration, labor force growth slows dramatically (potentially to near zero or negative), lowering the “breakeven” rate of monthly job gains needed to keep unemployment stable. Recent slowdowns in US immigration/enforcement have already pushed estimates of sustainable monthly payroll growth toward very low or negative territory.[5]
Sectoral Reliance and Shortages
Immigrants (legal and unauthorized) make up ~18–20% of the US workforce overall but much higher shares in specific industries and occupations, often those that are physically demanding, seasonal, lower-wage, or location-specific where native participation is lower:
High-skilled immigration (e.g., H-1B, STEM) fills gaps in tech, engineering, healthcare, and innovation-driven fields. Foreign workers have driven large shares of growth in AI-related occupations.[9]
Evidence from Restrictions
Sudden stops or reductions do not simply free up jobs for natives in a 1:1 way:
Immigrants also boost demand (as consumers and entrepreneurs— they start businesses at higher rates) and can raise native wages/productivity via complementarities and skill mix. Meta-analyses and studies (e.g., National Academies, Peri et al.) generally find small/neutral-to-positive overall wage and employment effects for natives, with any negatives concentrated on prior immigrants or specific low-education subgroups.[14]
Nuances and Counterarguments
In short, stopping immigration would reduce labor supply against ongoing demand (from demographics, infrastructure, care needs for an aging society, etc.), producing shortages especially in immigrant-heavy sectors, slower growth, higher costs, and incomplete native replacement. This is the mainstream view from demographic agencies (CBO), Fed analyses, Brookings, EPI, and much of the economics literature. Policy trade-offs exist (fiscal costs, social cohesion, wage effects for some groups, border security), but the labor supply channel is clear and empirically supported. Gradual, skills- and needs-based immigration is widely seen as a tool to ease shortages without the disruptions of abrupt stops.
Citations (15)
- 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: “Immigrants are not perfect substitutes for native workers; they often complement them, fill roles natives are less willing or able to take, expand the economic pie (creating demand and jobs), and drive nearly all recent labor force growth.”
- https://www.cbo.gov/publication/61270
Backs: “Without it, the US population begins shrinking around the early 2030s.”
- https://fortune.com/2025/10/21/trump-immigration-policy-jobs-workforce-american-workers-gdp-growth/
Backs: “Immigrants (who are disproportionately working-age) have accounted for the vast majority—or all—of recent labor force growth (e.g., ~85% from 2019–2024 in one analysis; virtually all in some periods).”
- https://mmr2025.mixedmigration.org/mmr/2025/labour-shortages-and-anti-immigration-stances/
Backs: “Similar pressures exist in Europe, Japan, South Korea, and elsewhere, where low fertility and aging create structural labor needs that immigration helps address.”
- https://www.brookings.edu/articles/macroeconomic-implications-of-immigration-flows-in-2025-and-2026-january-2026-update/
Backs: “Recent slowdowns in US immigration/enforcement have already pushed estimates of sustainable monthly payroll growth toward very low or negative territory.”
- https://usafacts.org/articles/which-industries-employ-the-most-immigrant-workers/
Backs: “Construction: ~30% foreign-born (higher in some regions like Texas/Florida); significant undocumented share.”
- https://www.forbes.com/sites/andrewtisch/2026/05/28/the-real-immigration-tragedy/
Backs: “Labor Department filings have warned that near-total cessation of unauthorized inflows risks supply shocks and food shortages, as unemployed Americans will not fill these roles in sufficient numbers even at current wages.”
- https://www.recruitonomics.com/p/sector-by-sector-mapping-the-labor
Backs: “Hospitality/accommodation/food services, manufacturing, transportation/warehousing, building/grounds maintenance, and certain healthcare/caregiving roles also have elevated shares.”
- https://www.thirdway.org/memo/front-door-welded-shut-how-trump-is-dismantling-legal-immigration
Backs: “Foreign workers have driven large shares of growth in AI-related occupations.”
- https://www.nber.org/digest/202606/what-happens-when-flow-immigrant-workers-suddenly-stops
Backs: “Native wages did not rise as a simple replacement story would predict.”
- https://pubs.aeaweb.org/doi/pdfplus/10.1257/app.20250049
Backs: “Effects on US worker employment are zero or positive (especially rural); low-skill immigrant and native workers are poor substitutes (low elasticity of substitution).”
- https://www.brookings.edu/articles/the-labor-market-impact-of-deportations/
Backs: “One analysis: each arrest can eliminate multiple jobs overall. No strong evidence of wage/employment booms for natives.”
- https://english.elpais.com/economy-and-business/2026-09-21/trumps-immigration-policy-is-choking-business-theres-nobody-to-work.html
Backs: “Recent US policy shifts reducing inflows/increasing removals have coincided with slower job growth, sectoral complaints of shortages (restaurants, farms, construction, care), and business reports of “nobody to work.””
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4810604
Backs: “Meta-analyses and studies (e.g., National Academies, Peri et al.) generally find small/neutral-to-positive overall wage and employment effects for natives, with any negatives concentrated on prior immigrants or specific low-education subgroups.”
- https://cis.org/Report/There-No-Labor-Shortage
Backs: “Critics (e.g., some restrictionist analyses) argue “shortages” often mean employers unwilling to pay market-clearing wages or improve conditions, and that low-skill immigration can depress wages for competing natives.”