Will stopping immigration cause labor shortages?
Yes, stopping (or sharply reducing) immigration is likely to cause or worsen labor shortages in specific sectors and constrain overall labor force growth, particularly in countries like the US with aging populations and low fertility rates—though labor markets adjust over time via wages, prices, automation, capital investment, and shifts in output.[1]
Immigrants have driven a large share of recent labor force growth in the US and other developed economies. Native-born working-age populations have stagnated or begun shrinking due to low birth rates and baby-boomer retirements. Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.[2][3] Foreign-born workers accounted for the bulk (e.g., ~85% in some recent periods) of US labor force growth and make up nearly 20% of the workforce.[4]
Sector-Specific and Recent Evidence
Certain industries depend heavily on immigrant labor (including unauthorized workers) for roles that natives often avoid due to physical demands, location, seasonality, pay, or conditions:
Recent sharp slowdowns or near-halts in net migration (including under enforcement crackdowns around 2025, with estimates of near-zero or negative net migration in some years—the first in decades) have coincided with:
Federal Reserve analyses (e.g., San Francisco, others) and private economists (Barclays, Morgan Stanley, AEI/Brookings) link reduced net international migration to slower labor force expansion, lower payroll growth, and risks of shortages if demand rebounds. Immigration inflows have historically helped ease vacancy rates and moderate wage pressures in tight markets.[10][11]
Adjustments and Counterarguments
Markets do not remain static:
Not all studies find large shortage effects from past immigration dips (e.g., some COVID-era analyses), and demand-side factors (business cycles, policy) matter. Long-term, stopping immigration does not create a fixed “lump of labor”; it slows expansion of both supply and demand. Developed economies face similar demographic pressures, making immigration one tool (alongside higher participation, automation, and fertility policies) against shortages.[15][16]
In summary, a full stop would almost certainly produce shortages relative to current demand patterns—especially short- to medium-term in immigrant-reliant manual and service sectors—and slow potential economic growth, based on demographics and recent/ empirical evidence. Adjustments mitigate but do not eliminate costs, and natives do not seamlessly fill every vacated role. Outcomes depend on the scale/speed of the stop, accompanying policies (training, visas for high-need areas, automation incentives), and economic conditions.
Citations (16)
- https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/
Backs: “Yes, stopping (or sharply reducing) immigration is likely to cause or worsen labor shortages in specific sectors and constrain overall labor force growth, particularly in countries like the US with aging populations and low fertility rates—though labor markets adjust over time via wages, prices, automation, capital…”
- https://www.business-standard.com/amp/immigration/immigration-fall-from-2-million-to-515-000-may-shrink-us-labour-force-fed-125112000258_1.html
Backs: “Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.”
- https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/11/immigration-and-changes-in-labor-force-demographics/
Backs: “Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.”
- https://fortune.com/2025/10/21/trump-immigration-policy-jobs-workforce-american-workers-gdp-growth/
Backs: “Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.Foreign-born workers accounted for the bulk (e.g., ~85% in some recent periods) of US labor force growth and make up nearly 20% of…”
- https://news.bloomberglaw.com/immigration/immigration-crackdown-fails-to-deliver-jobs-for-us-born-workers
Backs: “Hospitality, food processing/preparation, personal services, and some skilled trades/healthcare support.”
- https://econofact.org/?p=10788
Backs: “Hospitality, food processing/preparation, personal services, and some skilled trades/healthcare support.”
- https://www.usbordernews.com/p/immigration-crackdown-depletes-skilled-us-workforce
Backs: “Businesses note that higher wages alone often fail to attract enough qualified natives for temporary/manual roles.”
- https://www.livemint.com/global/how-a-historic-immigration-drop-is-changing-the-job-market-11756089136179.html
Backs: “Estimates dropped from 100,000–170,000+ toward tens of thousands, near zero, or even negative in projections, weighing on GDP growth potential (e.g., to 1.4–1.6% range in some forecasts).”
- https://www.forbes.com/sites/stuartanderson/2026/02/22/new-research-finds-reducing-immigration-does-not-help-us-workers/
Backs: “Immigrants often complement natives (filling roles that enable higher-skilled or managerial work) and generate demand via spending and entrepreneurship.”
- https://www.frbsf.org/research-and-insights/publications/economic-letter/2023/02/role-of-immigration-in-us-labor-market-tightness/
Backs: “Immigration inflows have historically helped ease vacancy rates and moderate wage pressures in tight markets.”
- https://www.kansascityfed.org/research/economic-bulletin/rising-immigration-has-helped-cool-an-overheated-labor-market
Backs: “Immigration inflows have historically helped ease vacancy rates and moderate wage pressures in tight markets.”
- https://www.econlib.org/library/Enc/Immigration.html
Backs: “Other research emphasizes complementarities and small average effects.”
- https://www.nber.org/papers/w23125.pdf
Backs: “Instead, mechanization accelerated (e.g., tomato harvesters), and production adjusted.”
- https://www.politico.com/magazine/story/2017/02/mexico-immigrant-workers-jobs-americans-braceros-history-immigration-214784
Backs: “Instead, mechanization accelerated (e.g., tomato harvesters), and production adjusted.”
- https://www.cgdev.org/blog/border-situation-us-symptom-not-illness-labor-shortages-most-developed-countries-will-continue
Backs: “Developed economies face similar demographic pressures, making immigration one tool (alongside higher participation, automation, and fertility policies) against shortages.”
- https://www.yahoo.com/news/articles/rich-western-countries-face-stark-160857156.html
Backs: “Developed economies face similar demographic pressures, making immigration one tool (alongside higher participation, automation, and fertility policies) against shortages.”