Will stopping immigration cause labor shortages?

Stopping immigration — especially abruptly or sharply — tends to produce labor shortages in specific sectors, though the overall economic picture is more nuanced than a simple yes/no.

Where shortages are most likely

Immigrant workers are concentrated in a handful of industries that native-born workers are often reluctant to enter, making these sectors especially vulnerable to supply shocks:

Agriculture: A substantial portion of farm jobs are filled by undocumented workers — for example, 42 percent of crop workers are undocumented because of limits on the H2A temporary visa program and the lack of interest by U.S.-born workers. Enforcement actions and reduced inflows have led to slower hiring, higher reliance on the H-2A temporary visa program, and reports of crops left unharvested or fields idled in some regions.

Construction: Immigrants represent approximately 30 to 36 percent of the construction workforce in recent years. Homebuilders and contractors report longer vacancy durations and project delays, exacerbating housing supply constraints.

Hospitality and food service: Without a steady supply of immigrant workers, hotels and restaurants have struggled to maintain service levels, resulting in reduced capacity and higher operating costs, with staffing shortages playing a significant role.

Healthcare: The Bureau of Labor Statistics predicts a shortage of about 135,000 health-care workers by 2036, with immigrants currently filling 15.6 percent of nursing positions.

Historical evidence

The COVID-19 pandemic offers a real-world test case. In the two years after the COVID-19 shock, immigration disruption led to a shortfall of 1.65 million in the working-age immigrant population, a gap that was not filled by increasing employment of native-born workers. More recently, a Brookings Institution report found that fewer people are coming to the United States while others are being deported or leaving on their own, meaning fewer workers, less consumer spending, and slower economic growth.

The counterargument

Not all research supports a direct causal link. A St. Louis Fed study examining the post-pandemic period found no evidence that immigration shortfalls caused the tight labor market: researchers found no evidence to support the hypothesis that immigration shortfalls caused the tight labor market, partly because the immigration deficit had largely recovered by February 2022 just as labor market tightness was increasing, and states, cities, or industries most impacted by immigration restrictions did not experience larger increases in labor market tightness.

Similarly, on wages, comprehensive reviews, including a 2017 National Academies report, conclude that the long-term impact of immigration on wages and employment of native-born workers overall is very small, with negative effects concentrated among prior immigrants or native-born high school dropouts while the broader workforce sees neutral to slightly positive effects.

Likely consequences if restricted sharply

Economists generally expect several knock-on effects rather than workers simply being replaced one-for-one:

Bottom line

The evidence suggests stopping immigration is more likely to create or worsen shortages in specific labor-intensive sectors (agriculture, construction, hospitality, eldercare) where native-born workers have historically been unwilling to fill the gap, rather than triggering an economy-wide shortage. The effects are likely to show up more as higher prices, slower growth, and operational strain on small businesses than as a uniform national labor crisis — and some economists dispute that past immigration slowdowns were even the primary driver of recent labor-market tightness. The impact also depends heavily on how abrupt the change is and whether domestic wage increases or automation can realistically substitute for the lost workers in the short term.