Will stopping immigration cause labor shortages?
Yes, abruptly stopping or severely restricting immigration would likely cause or worsen labor shortages in many sectors, at least in the short-to-medium term, and slow overall labor force and economic growth—particularly in countries with aging populations and low fertility like the US and much of Europe. Markets can partially adjust (via higher wages, automation, internal migration, or capital substitution), but evidence shows these adjustments are incomplete, costly, and often fail to fully replace immigrant workers, especially in physically demanding or low-wage roles that natives are less willing or able to fill at scale.[1][2]
Demographic Context
Native-born working-age populations (roughly 18-65) in the US have been stagnating or shrinking due to aging (Baby Boomers retiring), lower fertility (below replacement), and other factors. Immigration has been the primary driver of labor force growth for decades, contributing substantially to both high- and low-skilled workers.[1][3]
Labor force participation among natives has not risen enough to offset this, and geographic mobility has declined, limiting how quickly natives fill gaps.[1]
Sectoral Dependence and Shortages
Immigrants (foreign-born) make up ~19% of the overall US workforce but far higher shares in key areas:
Recent immigration reductions/deportations have been linked to depleted skilled trades pipelines, construction delays, hiring difficulties in ag/hospitality/manufacturing, and no clear boost (or even rises) in native-born unemployment/participation issues in affected areas. Businesses report candidates are often unqualified, and "there are no American kids willing to install roofs" in some regions.[7][12][2]
Studies of the 2021–2024 immigration surge found it alleviated post-pandemic shortages by filling vacancies and moderating wage pressures (immigrants and natives often act as complements under certain production technologies). Prior slowdowns (e.g., post-2007 low-skilled immigration decline) correlated with low-skilled service shortages and other imbalances.[13][14]
Economic Mechanisms and Evidence
Nuances and Caveats
In short, immigration is not the sole solution to labor issues, but demographic realities make sharp stoppages highly disruptive to labor supply in immigrant-reliant sectors and the broader economy. Data from recent reductions and historical episodes consistently point to shortages and slower growth rather than seamless native replacement or broad native gains.
Citations (18)
- https://econofact.org/immigration-and-waning-us-labor-force-growth
Backs: “Markets can partially adjust (via higher wages, automation, internal migration, or capital substitution), but evidence shows these adjustments are incomplete, costly, and often fail to fully replace immigrant workers, especially in physically demanding or low-wage roles that natives are less willing or able to fill at…”
- https://news.bloomberglaw.com/immigration/immigration-crackdown-fails-to-deliver-jobs-for-us-born-workers
Backs: “Markets can partially adjust (via higher wages, automation, internal migration, or capital substitution), but evidence shows these adjustments are incomplete, costly, and often fail to fully replace immigrant workers, especially in physically demanding or low-wage roles that natives are less willing or able to fill at…”
- 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: “Immigration has been the primary driver of labor force growth for decades, contributing substantially to both high- and low-skilled workers.”
- https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/
Backs: “Economists (e.g., Barclays) have estimated that a near-halt in migrant inflows, combined with aging, could drop "potential" private payroll growth to under 10,000–60,000 per month (from over 100,000), constraining GDP growth.”
- https://mmr2025.mixedmigration.org/mmr/2025/labour-shortages-and-anti-immigration-stances/
Backs: “Similar dynamics exist in Europe, where aging workforces and shortages (reported by ~4/5 of SMEs) clash with anti-immigration policies; non-EU workers filled a large share of recent job creation.”
- https://amp.dw.com/en/wealthy-nations-curb-labor-migration-as-demand-surges/a-74978505
Backs: “Similar dynamics exist in Europe, where aging workforces and shortages (reported by ~4/5 of SMEs) clash with anti-immigration policies; non-EU workers filled a large share of recent job creation.”
- https://www.firstpost.com/world/united-states/us-needs-1-7-million-skilled-workers-a-year-but-trumps-immigration-crackdown-adds-to-labour-woes-14052891.html
Backs: “Shortages already cause project delays; crackdowns exacerbate them.”
- https://www.engimarket.com/blog/immigrant-workers-in-construction-statistics/
Backs: “Shortages already cause project delays; crackdowns exacerbate them.”
- https://www.jchs.harvard.edu/blog/declining-immigration-threatens-labor-supply-construction-trades
Backs: “Shortages already cause project delays; crackdowns exacerbate them.”
- 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 STEM/computer/math (~27%) and life sciences.”
- https://usafacts.org/articles/which-industries-employ-the-most-immigrant-workers/
Backs: “Also significant in STEM/computer/math (~27%) and life sciences.”
- https://www.usbordernews.com/p/immigration-crackdown-depletes-skilled-us-workforce
Backs: “Businesses report candidates are often unqualified, and "there are no American kids willing to install roofs" in some regions.”
- https://www.lse.ac.uk/CFM/assets/pdf/CFM-Discussion-Papers-2026/CFMDP2026-04-Paper.pdf
Backs: “Prior slowdowns (e.g., post-2007 low-skilled immigration decline) correlated with low-skilled service shortages and other imbalances.”
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4893438
Backs: “Prior slowdowns (e.g., post-2007 low-skilled immigration decline) correlated with low-skilled service shortages and other imbalances.”
- https://www.forbes.com/sites/stuartanderson/2026/02/22/new-research-finds-reducing-immigration-does-not-help-us-workers/
Backs: “Reductions tighten markets, raise wages for remaining (often low-skilled) workers, but also raise prices for goods/services, slow firm growth/formation, and can reduce overall employment growth (immigrants create demand via spending and entrepreneurship; jobs are not fixed).”
- https://www.frbsf.org/research-and-insights/publications/working-papers/2026/10/impacts-unauthorized-immigration-us-labor-housing-markets-new-evidence-administrative-microdata/
Backs: “Reductions tighten markets, raise wages for remaining (often low-skilled) workers, but also raise prices for goods/services, slow firm growth/formation, and can reduce overall employment growth (immigrants create demand via spending and entrepreneurship; jobs are not fixed).”
- https://www.library.hbs.edu/working-knowledge/history-check-how-barring-immigrants-backfired-in-1880s-america
Backs: “WWII required guest worker programs (Bracero) for agricultural shortages.”
- https://www.nber.org/papers/w26536.pdf
Backs: “WWII required guest worker programs (Bracero) for agricultural shortages.”