Will stopping immigration cause labor shortages?

Yes, evidence strongly suggests that significantly reducing immigration tends to create labor shortages, particularly in certain sectors and in countries with aging populations — though the effects aren't uniform across all parts of the economy.

Real-world evidence from current U.S. policy

Recent experience in the United States provides a live case study. Agriculture: foreign-born workers account for roughly two-thirds of the hired crop labor force, with undocumented workers comprising a substantial share. Farms have reported real consequences — foreign-born workers comprise approximately 70% of the farm workforce nationwide, and many farms report difficulty finding enough workers during critical harvest periods, a challenge that has intensified in the first half of 2025 due to increased interior immigration enforcement.

Construction: economists' concern that the Trump administration's immigration crackdown has led to fewer jobs in critical industries, particularly construction, reifying fears of labor shortages, delays, and ultimately passed-down costs has been confirmed by data, with one industry group noting the U.S. must hire 349,000 more construction workers in 2026 in order to meet demand.

Broader labor market: Official data show measurable effects — the Bureau of Labor Statistics household survey for February 2026 shows a decline of 596,000 foreign-born workers since January 2026, and a drop of 1,008,000 since a peak in March 2025. Looking forward, one policy analysis projects that the Trump administration's policies on illegal and legal immigration would reduce the projected number of workers in the United States by 6.8 million by 2028 and by 15.7 million by 2035 and lower the annual rate of economic growth by almost one-third.

Why this happens: demographic math

The deeper structural reason is demographic. Research from the San Francisco Fed shows that without new immigration, the U.S. working-age population ages 16 to 64 would have started to decline in 2012. The Fed also found that net international migration fell sharply in 2025 to 515,000 people, which is below the level of net migration necessary to sustain positive growth in the working-age population this year, and projects that without immigration, working-age population growth is likely to be negative through at least 2040, given recent and current birth rates, population aging, and current age-specific mortality rates.

This matters because immigrants have historically filled the gap left by an aging native-born workforce: historically, immigration has offset older workers leaving the labor force — foreign-born workers have consistently accounted for half of labor force growth each year, an outsized contribution given their much smaller share of 19 percent of the population.

Sectors most exposed

The sectors most vulnerable to shortages tend to be those with heavy reliance on foreign-born labor: unfilled job vacancies and labor shortages have been growing over the last 10 years, especially in sectors like agriculture, construction, leisure and hospitality, and personal services, which employ a large share of non-college educated workers. Healthcare is another flagged area — employers worry about a labor shortage in industries like construction and healthcare that lean heavily on foreign-born workers, and more specifically in eldercare, immigrants comprise 28% of all physicians, 24% of all dentists, and 38% of all home health care aides in the U.S., and there are already significant shortages likely to be exacerbated with the growth of an aging population.

Counterarguments and nuance

Not all economists agree immigration cuts are purely harmful, and some caveats matter:

Bottom line

Based on current evidence, stopping or sharply curtailing immigration does appear to cause labor shortages — especially in agriculture, construction, hospitality, and caregiving/healthcare, where immigrants make up an outsized share of workers, and especially in countries with aging populations where native-born labor force growth is already slowing. However, the shortages tend to be uneven across sectors and skill levels, don't automatically translate into wage gains for native workers, and immigration alone isn't a complete fix for long-term demographic pressures like population aging.