Will stopping immigration cause labor shortages?

Stopping immigration and labor shortages — I'll gather the research to assess the link.

Yes, according to most labor economists and demographic research - stopping immigration would worsen labor shortages, though effects vary by sector, region and time horizon.

1. Demographics already point to shortage without immigration

The U.S. and other advanced economies face aging populations and falling birth rates. Immigration has been the main offset:

•The Federal Reserve Bank of San Francisco found that without immigration, the U.S. working-age population would have started shrinking in 2012, not 2025

•Pew Research projected that without immigration, the U.S. workforce would decline from 173 million in 2015 to just 166 million in 2035, while with immigration it would grow to 183 million

•Chief economist at Indeed said: "Demographic shifts and aging populations mean countries like the U.S. will experience an ongoing shortage of workers and hiring will remain challenging for years," and "Without sustained immigration or a focus on attracting workers on the sidelines of the labor force, these countries simply won't have enough workers to fill long-term demand for years to come."

•The World Bank analysis cited by Indeed projects the number of people of working age (15-65) will decline in the U.S. by over 3 percent over the next decade

Immigrants have driven most recent labor force growth:

•Immigrants accounted for 84.7% of labor force growth since 2019

•Between 2010 and 2018, immigrants and their U.S.-born children accounted for more than four-fifths of labor force growth, in other reporting.

Models of tighter immigration show large workforce reductions:

•The CBO projects reduced immigration will shrink the labor force by 15 million jobs by 2035

•National Foundation for American Policy forecasts a 6.8 million reduction in the U.S. workforce by 2028 and 15.7 million by 2035 driven by tightened legal and illegal immigration policies

2. Evidence that immigration has eased shortages, and restrictions create them

•Tightened immigration controls are directly linked to growing labor shortages in key sectors of the U.S. economy

•Labor shortages are growing in sectors that rely heavily on immigrant workers, including agriculture, construction, food service, healthcare, and transportation

Immigrant share by sector is high:

> With immigrant workers comprising 25% of construction labor, 66% of agriculture workers, and 15–28% of healthcare staff

Federal Reserve Bank of Kansas City research on the 2022-2023 immigration surge found:

> This flow of immigrant workers has acted as a powerful catalyst in cooling overheated labor markets and tempering wage growth

> In industries and states that have struggled to fill positions, the arrival of immigrant workers has eased labor shortages

Specifically: "from December 2021 to December 2023, every 1.0 percentage point increase in employment growth coming from immigrant workers in an industry corresponded to a nearly 0.5 percentage point decline in job vacancy rates" - e.g. leisure and hospitality saw immigrant employment up >5.5 points while vacancy rate fell 4.4 points.

Conversely:

•Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks

•Brookings models say a sudden plunge in immigration reduces the labor force available to fill jobs businesses expect to fill, dampening employment, GDP and consumer spending

3. Why "stopping" doesn't simply free jobs for native workers

Research consensus is that immigrants largely complement rather than substitute for U.S.-born workers:

> Immigrants and U.S.-born workers usually do not compete for the same jobs, and immigrants are not the cause of any significant decline in wages or employment for U.S.-born citizens. Rather, immigrants "complement the work of U.S. employees and increase their productivity," according to a review of research on the topic by The Brookings Institution

•18.6% of the U.S. civilian labor force were immigrants in 2023, filling critical roles in industries with unmet demands

•Immigrants tend to work in professions with the most unmet demand and are more likely to be active in the labor market

If labor supply dries up, research finds businesses typically scale back operations rather than raise wages enough to attract native workers to physically demanding, low-pay jobs like farm field work or fish gutting.

4. Nuance / counter-arguments

•Short-term vs long-term: A sudden stop would have immediate shock - softer spending, hit to employment growth, perhaps pushing sustainable monthly job growth to 20,000–50,000 or negative in 2026 - but long-term effects are even larger due to aging.

•Automation and other offsets: Some argue automation, AI, offshoring or drawing discouraged workers, women, older workers, disabled workers or formerly incarcerated people back into labor force could partly offset shortages. Economists note flexibility and remote work can help, and that higher-skilled immigration restrictions keep employers from filling critical gaps and fulfilling full economic potential, but technology alone has not replaced the need in labor-intensive sectors like agriculture, construction, elder care, hospitality.

•Wages and inflation: More immigrant labor eased pressure on companies to sharply raise wages and pass on higher labor costs via higher prices, while tighter supply tends to reduce competition and bidding for workers, easing wage pressures - meaning stopping immigration could mean higher wages in some shortage occupations but also higher consumer prices and slower GDP growth.

In sum: Stopping immigration entirely is projected by major forecasts to shrink the total workforce and intensify shortages already driven by demographics, especially in agriculture, construction, hospitality, health/aged care and some high-skill tech roles. Politically contested views exist about whether higher wages would attract native workers or whether automation could substitute, but the weight of demographic and Federal Reserve, Census, and labor-market data indicates immigration has been preventing a decline in working-age population and easing vacancy rates.

3.[Rising Immigration Has Helped Cool an Overheated Labor Market](https://www.kansascityfed.org/Economic Bulletin/documents/10190/EconomicBulletin24Cohen0522.pdf)

Citations (3)

1fastcompany.comNews and mediaquality 0.80
Immigrants will play primary role in future growth of working-age population
Backs: “The Federal Reserve Bank of San Francisco found that without immigration, the U.S. working-age population would have started shrinking in 2012, not 2025. Pew Research projected that without immigration, the U.S. workforce would decline from 173 million in 2015 to just 166 million in 2035, while with immigration it…”
2shrm.orgNonprofits and think tanks
Labor Shortages Forecast to Persist for Years
Backs: “workforce would decline from 173 million in 2015 to just 166 million in 2035, while with immigration it would grow to 183 million. Chief economist at Indeed said: "Demographic shifts and aging populations mean countries like the U.S. will experience an ongoing shortage of workers and hiring will remain challenging for…”
3kansascityfed.orgGovernment
Rising Immigration Has Helped Cool an Overheated Labor Market
Backs: “Federal Reserve Bank of Kansas City research on the 2022-2023 immigration surge found: This flow of immigrant workers has acted as a powerful catalyst in cooling overheated labor markets and tempering wage growth”