Will stopping immigration cause labor shortages?
Yes, in key sectors and for overall labor force growth in the near-to-medium term, but markets adjust through higher wages, prices, automation, reduced output, and other channels—and natives do not fully replace immigrant workers one-for-one. The effects are nuanced, sector-specific, and depend on the scale/speed of any stoppage, skill levels involved, and concurrent demand changes. Immigrants (foreign-born) comprise roughly 18–20% of the U.S. workforce (around 30+ million workers recently).[1]
High Concentration in Specific Industries and Occupations
Immigrants are disproportionately represented in certain roles that many native-born workers are less willing or able to fill at prevailing conditions (due to preferences for higher-status/less physically demanding work, location/mobility, seasonality, or skills):
Agriculture, construction, food processing, hospitality, and caregiving rely heavily on immigrant (including unauthorized) labor. Sudden or large reductions create acute staffing difficulties there.[3]
Evidence from Slowdowns, Restrictions, and Natural Experiments
Natives and immigrants are often complements rather than perfect substitutes (different skills, languages, task specialization). Immigrants expand the economic pie via labor supply and demand (they consume housing, goods, services, and start businesses at high rates). Removing them can reduce both supply and demand for labor. A Canadian analysis of high immigration found that demand effects may offset or exceed supply effects economy-wide, so aggregate shortages need not fall.[9]
Broader Labor Force and Growth Impacts
U.S. native-born working-age population growth has slowed due to aging and low fertility. Immigration has been a major (sometimes primary) driver of labor force and employment growth. Zero or negative net immigration would sharply reduce sustainable monthly job gains (estimates in the low tens of thousands or near zero, vs. historical averages well over 100k), constraining potential GDP growth.[10] Long-run effects include slower business formation/productivity (immigrants and their descendants are entrepreneurial) and exacerbated aging-related fiscal pressures.[11]
Adjustments and Caveats
Labor markets clear: Wages for remaining/scarce workers rise (benefiting some low-skilled natives), prices of immigrant-intensive goods/services rise (hurting consumers, especially lower-income), firms automate, change product mixes, relocate, or shrink, and some natives enter or increase hours. Historical episodes show these channels operate, so permanent “shortages” (unfilled jobs at any wage) are not inevitable—quantity and quality of output adjust downward. High-skill immigration has different dynamics (innovation, complementarity with natives). Aggregate native employment/wages show little long-run harm from immigration in most careful studies (effects often near zero or mildly positive via demand/complementarity); competition is stronger among prior immigrants.[12]
Bottom line: Abruptly stopping immigration would cause or worsen labor shortages (unfilled vacancies, production shortfalls) especially in agriculture, construction, hospitality, food, and care sectors in the short-to-medium run, because full native substitution is limited. It would also slow overall labor force and economic growth amid demographic headwinds. Over time, wages, prices, technology, and output composition adjust, with winners (some native workers via higher wages) and losers (consumers via higher prices, firms/sectors that shrink, broader growth). Policy design (skill mix, temporary vs. permanent, legal pathways, enforcement pace) matters greatly for the net effects. Empirical consensus from labor economists emphasizes complementarity, demand effects, and limited displacement of natives rather than a simple “immigrants take jobs” model.
Citations (12)
- https://usafacts.org/answers/what-percent-of-the-workforce-in-the-us-are-immigrants/country/united-states/
Backs: “Immigrants (foreign-born) comprise roughly 18–20% of the U.S. workforce (around 30+ million workers recently).”
- https://www.epi.org/chart/immigration-faq-2025-table-2-immigrants-comprise-a-significant-share-of-workers-in-both-high-and-low-paying-major-occupations-top-10-occupations-for-immigrants-by-share-of-employment-in-the-o/
Backs: “Also significant in leisure/hospitality, personal care, and some high-skill areas like computer/math (~27%).”
- https://www.kff.org/page/14/?p=0
Backs: “Sudden or large reductions create acute staffing difficulties there.”
- http://dx.doi.org/10.29338/wp2024-01
Backs: “A subsequent immigration surge helped alleviate vacancies and cool wage pressures.”
- https://cepr.org/voxeu/columns/economic-consequences-low-skilled-immigration-sudden-stop-evidence-koreas-guest
Backs: “They did not substantially hire more natives; some closed. Migrants filled complementary production tasks.”
- https://www.nber.org/system/files/working_papers/w23125/w23125.pdf
Backs: “Instead, farms adopted labor-saving technology (e.g., mechanical tomato harvesters) and shifted crop mixes; some output fell where mechanization was limited. Workers were not largely replaced by natives.”
- https://www.nber.org/system/files/working_papers/w30589/w30589.pdf?amp%3Butm_source=PANTHEON_STRIPPED&%3Butm_medium=PANTHEON_STRIPPED
Backs: “Effects on native employment are zero or positive overall (and positive in rural areas), consistent with low substitutability and scale/complementarity effects (immigrants help firms grow, creating native jobs). Restrictions cause contraction.”
- https://www.kansascityfed.org/research/economic-bulletin/immigration-shortfall-may-be-a-headwind-for-labor-supply/
Backs: “Ongoing sharp reductions/deportations have been associated with staffing challenges, slower job growth in affected sectors, and some price pressures (e.g., food, care, landscaping).”
- https://www.thesilo.ca/tag/c-d-howe-institute/
Backs: “A Canadian analysis of high immigration found that demand effects may offset or exceed supply effects economy-wide, so aggregate shortages need not fall.”
- https://www.livemint.com/global/how-a-historic-immigration-drop-is-changing-the-job-market-11756089136179.html
Backs: “Zero or negative net immigration would sharply reduce sustainable monthly job gains (estimates in the low tens of thousands or near zero, vs. historical averages well over 100k), constraining potential GDP growth.”
- https://budgetlab.yale.edu/sites/default/files/page_to_pdf/1522/publication_1522.pdf
Backs: “Zero or negative net immigration would sharply reduce sustainable monthly job gains (estimates in the low tens of thousands or near zero, vs. historical averages well over 100k), constraining potential GDP growth.Long-run effects include slower business formation/productivity (immigrants and their descendants are…”
- https://www.americanimmigrationcouncil.org/blog/immigrants-do-not-take-americans-jobs-wages/
Backs: “Aggregate native employment/wages show little long-run harm from immigration in most careful studies (effects often near zero or mildly positive via demand/complementarity); competition is stronger among prior immigrants.”