Will stopping immigration cause labor shortages?
Yes, substantially reducing or stopping immigration is very likely to cause or worsen labor shortages in many sectors and constrain overall labor force growth, based on economic data, recent policy effects, demographic trends, and historical/comparative evidence. This does not mean every job goes unfilled forever—markets adjust via higher wages, prices, automation, reduced output, or shifts in native participation—but the process is often slow, incomplete, and costly, particularly for roles that natives are less willing or able to fill.[1]
Demographic and Labor Force Context
The U.S. (and many developed countries) faces slowing native-born working-age population growth due to low fertility rates (below replacement for decades) and aging/retirement of the baby boom generation. Immigration has been a primary driver of labor force expansion for years.[1]
Immigrants also add to demand (as consumers and entrepreneurs), supporting job creation overall. Studies often find complementarities: immigrants take certain tasks, allowing natives to specialize/upgrade, with limited or positive net effects on native employment and wages in many cases (though debate exists on low-skilled native wages).[5]
Recent Evidence from Policy Changes
Sharp reductions in illegal crossings, increased deportations/removals, restrictions on legal pathways (e.g., TPS endings, higher visa fees), and net migration drops (some estimates negative for the first time in decades) have already produced reports of shortages:
A key NBER study of South Korea’s sudden COVID-era halt in its low-skilled guest worker program (EPS) found firms with high prior dependence more likely to close, report revenue/production losses, and demand more guest workers—without significantly ramping up new native hiring (some retention of incumbents occurred). This mirrors U.S. sector dynamics.[8]
Historical and Comparative Patterns
Caveats and Adjustments
In summary, immigrants fill critical supply gaps that demographics and native preferences leave open. Abruptly stopping or heavily restricting inflows—especially without alternatives—reliably produces shortages in dependent sectors, tighter overall labor markets, slower growth, and higher costs, as current data and studies confirm. Sustainable policy often involves legal channels matched to labor needs alongside enforcement and integration measures.
Citations (12)
- https://econofact.org/immigration-and-waning-us-labor-force-growth
Backs: “This does not mean every job goes unfilled forever—markets adjust via higher wages, prices, automation, reduced output, or shifts in native participation—but the process is often slow, incomplete, and costly, particularly for roles that natives are less willing or able to fill.”
- https://econofact.org/?p=10788
Backs: “They are disproportionately represented in construction (~30-40%, higher in some regions), agriculture/farm labor (often 40-70% depending on the measure, with many undocumented), food processing, leisure/hospitality, personal services, and some manufacturing/health care support roles.”
- https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/
Backs: “This lowers potential GDP growth (estimates of 0.3–0.4+ percentage points or more, with longer-term projections of substantial cumulative losses).”
- https://news.bloomberglaw.com/immigration/immigration-crackdown-fails-to-deliver-jobs-for-us-born-workers
Backs: “Labor force participation among natives has not surged to fill gaps; in some recent data amid enforcement, native unemployment has risen or participation stagnated while businesses report shortages.”
- https://cepr.org/publications/dp21756
Backs: “Studies often find complementarities: immigrants take certain tasks, allowing natives to specialize/upgrade, with limited or positive net effects on native employment and wages in many cases (though debate exists on low-skilled native wages).”
- https://english.elpais.com/economy-and-business/2026-09-21/trumps-immigration-policy-is-choking-business-theres-nobody-to-work.html
Backs: “Immigrant shares make these vulnerable (e.g., ~40% construction labor immigrant; high in ag).”
- https://finance.yahoo.com/economy/articles/barclays-sees-lasting-labor-market-212235263.html
Backs: “Broader effects: slower payroll growth, persistent tightness, wage pressures in affected areas, and risks of higher inflation from supply constraints alongside slower growth.”
- https://www.nber.org/digest/202606/what-happens-when-flow-immigrant-workers-suddenly-stops
Backs: “A key NBER study of South Korea’s sudden COVID-era halt in its low-skilled guest worker program (EPS) found firms with high prior dependence more likely to close, report revenue/production losses, and demand more guest workers—without significantly ramping up new native hiring (some retention of incumbents occurred).…”
- https://www.pewresearch.org/short-reads/2015/09/30/how-u-s-immigration-laws-and-rules-have-changed-through-history/
Backs: “Quotas reduced European inflows but did not eliminate demand; employers sought alternatives.”
- https://mmr2025.mixedmigration.org/mmr/2025/labour-shortages-and-anti-immigration-stances/
Backs: “Global talent/labor shortfalls are projected in the tens of millions.”
- https://www.aei.org/research-products/report/how-did-the-post-pandemic-migration-surgeaffect-labor-and-housing-markets/
Backs: “Post-pandemic U.S. immigration surges helped ease shortages, boost employment/GDP, and provide some disinflationary supply-side pressure (while also raising housing demand in places).”
- https://www.forbes.com/sites/stuartanderson/2026/02/22/new-research-finds-reducing-immigration-does-not-help-us-workers/
Backs: “Restricting supply can raise wages in immigrant-heavy occupations (a goal of some policies), but evidence is mixed on broad native gains, and it can reduce overall employment/output if firms shrink or raise prices. Immigrants create jobs too.”