Will stopping immigration cause labor shortages?
The CIS report argues there is no true labor shortage and that employers can raise wages, while most other cited sources say reduced immigration worsens shortages.
Yes, stopping immigration (or sharply reducing it to near-zero net levels) would very likely cause or worsen labor shortages in the short-to-medium term in many developed economies, particularly the US, though markets would eventually adjust in various ways—with costs to output, growth, and certain sectors. This is driven by demographics, the current composition of the workforce, sector-specific reliance on immigrants, and empirical evidence from sudden stops and recent policy shifts.[1]
Demographic Reality
Native-born working-age populations in the US, Europe, and similar countries are stagnating or shrinking due to fertility rates well below replacement (often ~1.6 or lower) and aging. In the US, the native-born population aged 18–65 has already begun shrinking in recent years, especially among non-college-educated workers. Without immigration, the working-age population would have started contracting over a decade ago. Immigrants have driven the large majority of recent US labor force growth (e.g., estimates around 85% in some recent multi-year periods). Net immigration falling sharply (as seen in recent US data, potentially to near-zero or negative) reduces potential payroll growth dramatically—from over 100,000/month toward tens of thousands or lower—and slows potential GDP growth.[2][3]
CBO and other projections incorporate lower immigration under restrictive policies and show slower labor force and population growth, with immigration accounting for the bulk of future population gains once deaths exceed births. Similar dynamics apply in Europe and East Asia (e.g., South Korea, Germany).[4]
Sectoral Reliance
Immigrants (foreign-born, including naturalized citizens) comprise roughly 18–19% of the US workforce overall, but far higher shares in key industries:
Sudden reductions hit these sectors hard via vacancies, project delays, higher costs, reduced production, or firm exits. Recent US enforcement and border slowdowns have already been linked by industry groups and reports to worsened shortages in construction, trades, agriculture, and hospitality, with employers noting that native applicants often lack qualifications, willingness for physical work, or geographic mobility.[8][9]
Empirical Evidence from Stops and Reductions
Broader studies find immigration often alleviates shortages by filling vacancies, with complementarities (immigrants and natives in different tasks/roles), job creation via demand/entrepreneurship, and modest or positive average effects on native wages/employment (especially over time; small negative effects possible for closest substitutes among low-skilled). Sudden stops reverse this.[13][14]
Nuances, Adjustments, and Counterarguments
Markets are not static. Higher wages could draw in some underemployed natives, raise labor force participation (including among women, older workers, or discouraged groups), spur automation/capital investment, or shift production (offshoring, less labor-intensive methods). Reduced immigration can lower housing/infrastructure pressure in some areas. Critics (e.g., some restrictionist analyses) argue “shortages” are often just employers unwilling to pay market-clearing wages or improve conditions, noting millions of working-age natives not employed and that true permanent shortages are rare as prices adjust.[15]
However, substitution is imperfect: many jobs involve physical demands, irregular hours, location (rural farms, construction sites), or skills that natives (especially with better options or lower mobility) avoid even at higher wages. Training takes time; automation has limits in care, services, and trades. Output and growth suffer in the interim—fewer workers mean less production of goods/services, higher prices in affected sectors (e.g., food, housing construction), and slower overall GDP. High-skilled immigration cuts also hit innovation and complementary native jobs. Long-term, sustained near-zero immigration amid low fertility implies a smaller, older workforce, pressuring entitlements and potential growth unless offset by major productivity gains (e.g., AI) or higher native participation/births.[16]
In short, stopping immigration does not create a fixed “lump of jobs” for natives to seamlessly fill. It shrinks labor supply relative to demand in an aging society, producing genuine frictions and shortages (especially sectoral and short/medium-term) that raise costs and constrain growth, even as some wage gains or adjustments occur for remaining workers. Targeted legal pathways responsive to labor needs, combined with training and participation policies, are the more common economic recommendation than abrupt stops. Effects vary by skill level, legal status, and exact policy (e.g., guest workers vs. permanent).
Citations (16)
- https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/
Backs: “This is driven by demographics, the current composition of the workforce, sector-specific reliance on immigrants, and empirical evidence from sudden stops and recent policy shifts.”
evidence, article, points to yes. Claim: Halting migration would sharply cut potential US job growth and payroll growth, supporting the claim that stopping immigration worsens labor shortages.
- 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: “Net immigration falling sharply (as seen in recent US data, potentially to near-zero or negative) reduces potential payroll growth dramatically—from over 100,000/month toward tens of thousands or lower—and slows potential GDP growth.”
statistic, article, points to yes. Claim: Falling net immigration may shrink the US labor force and sharply reduce potential payroll growth.
- https://fortune.com/2025/10/21/trump-immigration-policy-jobs-workforce-american-workers-gdp-growth/
Backs: “Net immigration falling sharply (as seen in recent US data, potentially to near-zero or negative) reduces potential payroll growth dramatically—from over 100,000/month toward tens of thousands or lower—and slows potential GDP growth.”
evidence, article, points to yes. Claim: Reduced immigration under current policy slows workforce and GDP growth, since immigrants drove most recent labor force growth.
- https://www.cbo.gov/publication/61735
Backs: “Similar dynamics apply in Europe and East Asia (e.g., South Korea, Germany).”
evidence, official document, points to yes. Claim: CBO projections show lower immigration slows labor force and population growth, with immigration accounting for the bulk of future gains.
- https://usafacts.org/articles/which-industries-employ-the-most-immigrant-workers/
Backs: “Construction: ~30% (or higher in trades like roofing, drywall, painting—often 50%+); immigrants drove much of the post-Great Recession recovery in the trades.”
statistic, article, points to yes. Claim: Immigrants hold high shares of jobs in industries such as construction, about 30%.
- https://www.engimarket.com/blog/immigrant-workers-in-construction-statistics/
Backs: “Construction: ~30% (or higher in trades like roofing, drywall, painting—often 50%+); immigrants drove much of the post-Great Recession recovery in the trades.”
statistic, article, points to yes. Claim: Immigrants make up a large share of construction workers, and even higher in trades like roofing and drywall.
- https://www.epi.org/chart/immigration-faq-2025-table-2-immigrants-comprise-a-significant-share-of-workers-in-both-high-and-low-paying-major-occupations-top-10-occupations-for-immigrants-by-share-of-employment-in-the-o/
Backs: “Also significant in healthcare support, manufacturing, and high-skilled areas like tech/STEM.”
statistic, data page, points to yes. Claim: Immigrants comprise significant shares of workers in many high- and low-paying occupations, including tech and healthcare support.
- https://www.usbordernews.com/p/immigration-crackdown-depletes-skilled-us-workforce
Backs: “Recent US enforcement and border slowdowns have already been linked by industry groups and reports to worsened shortages in construction, trades, agriculture, and hospitality, with employers noting that native applicants often lack qualifications, willingness for physical work, or geographic mobility.”
evidence, article, points to yes. Claim: Immigration enforcement has worsened shortages in construction, trades, agriculture and hospitality.
- https://news.bloomberglaw.com/immigration/immigration-crackdown-fails-to-deliver-jobs-for-us-born-workers
Backs: “Recent US enforcement and border slowdowns have already been linked by industry groups and reports to worsened shortages in construction, trades, agriculture, and hospitality, with employers noting that native applicants often lack qualifications, willingness for physical work, or geographic mobility.”
evidence, article, points to yes. Claim: Crackdowns have not delivered jobs for US-born workers, with little substitution and persistent structural mismatches.
- https://www.nber.org/digest/202606/what-happens-when-flow-immigrant-workers-suddenly-stops
Backs: “Native wages sometimes fell due to task reassignment (complementarity rather than pure substitution).”
evidence, article, points to yes. Claim: South Korea's guest-worker drop led to firm closures, lost output, and no significant rise in native hiring.
- https://www.forbes.com/sites/stuartanderson/2026/02/22/new-research-finds-reducing-immigration-does-not-help-us-workers/
Backs: “Economists at places like Barclays, Fed banks, and others project much slower sustainable payroll growth.”
evidence, article, points to yes. Claim: New research finds reducing immigration does not help US workers.
- https://www.library.hbs.edu/working-knowledge/what-the-world-could-learn-from-americas-immigration-backlash-years-ago
Backs: “Historical US examples (e.g., Chinese Exclusion, 1920s quotas) show mixed adjustments: some native/immigrant replacement or internal migration, but also slower growth in affected areas, incomplete substitution in low-skilled roles, and recruitment of alternative immigrant sources. Wartime shortages prompted…”
evidence, article, neutral. Claim: Historical US restrictions like Chinese Exclusion and 1920s quotas produced mixed adjustments, with slower growth and incomplete substitution.
- https://www.lse.ac.uk/CFM/assets/pdf/CFM-Discussion-Papers-2026/CFMDP2026-04-Paper.pdf
Backs: “Broader studies find immigration often alleviates shortages by filling vacancies, with complementarities (immigrants and natives in different tasks/roles), job creation via demand/entrepreneurship, and modest or positive average effects on native wages/employment (especially over time; small negative effects possible…”
evidence, official document, points to yes. Claim: Studies find immigration alleviates shortages through complementarities and job creation, with modest effects on native wages.
- https://doi.org/10.3386/w32389
Backs: “Broader studies find immigration often alleviates shortages by filling vacancies, with complementarities (immigrants and natives in different tasks/roles), job creation via demand/entrepreneurship, and modest or positive average effects on native wages/employment (especially over time; small negative effects possible…”
evidence, official document, points to yes. Claim: Broader research finds immigration fills vacancies and has modest or positive average effects on native wages and employment.
- https://cis.org/Report/There-No-Labor-Shortage
Backs: “Critics (e.g., some restrictionist analyses) argue “shortages” are often just employers unwilling to pay market-clearing wages or improve conditions, noting millions of working-age natives not employed and that true permanent shortages are rare as prices adjust.”
attribution, official document, points to no. Claim: Restrictionist analysts argue shortages are often employers unwilling to pay market wages, and true permanent shortages are rare.
- https://www.cgdev.org/blog/border-situation-us-symptom-not-illness-labor-shortages-most-developed-countries-will-continue
Backs: “Long-term, sustained near-zero immigration amid low fertility implies a smaller, older workforce, pressuring entitlements and potential growth unless offset by major productivity gains (e.g., AI) or higher native participation/births.”
evidence, article, points to yes. Claim: Most developed countries face continuing labor shortages from aging, so near-zero immigration implies a smaller, older workforce.