Will stopping immigration cause labor shortages?

Will stopping immigration cause shortages? I'll pull the latest research on labor gaps and sector impacts.

Yes, most economic research concludes that stopping immigration would worsen — and over the longer term cause — labor shortages in the United States and other advanced economies, though the effect is uneven across sectors, regions and time horizons.

1. The demographic baseline

Advanced economies already face shrinking native-born workforces due to aging and low fertility.

•The Congressional Budget Office projects slower U.S. population growth over the next 30 years and notes: "Without immigration, the U.S. population would begin to shrink in 2033."

•The same dynamic applies to the labor force: "Without immigration, the U.S. population would begin to shrink in 2033, in part because fertility rates are projected to remain too low for a generation to replace itself."

•Federal Reserve Bank of San Francisco research projects that "without immigration, prime-age labor force growth will likely continue to slow and turn negative around 2042."

•Without the immigration surge of 2022 to 2024, "the US working-age population would have been shrinking" and "The prime-age labor force grew in large part because of immigration"

One estimate cited in recent analysis is that reduced immigration will shrink the labor force by 15 million jobs by 2035, further straining economic resilience.

In Europe the pattern is similar. Research notes "Immigration can ease labor shortages, expand the tax base, and help offset demographic decline." The European Commission explicitly identifies legal migration as one way to address labor shortages and support growth.

Historically, sharp restrictions have produced shortages. The Immigration Act of 1924 "led to a labor shortage in certain sectors, particularly in industries that relied on immigrant workers."

2. Why stopping immigration creates shortages

A. Immigrants fill complementary, not just substitutable, jobs

Research summarizes that immigrants "fill both low-skilled jobs that complement native-born U.S. workers and high-skilled jobs where domestic supply falls short of demand". A common economic conclusion is:

> "Though much of the rhetoric surrounding the immigration issue focuses on jobs for American workers, most economists agree that lower migration levels do not ultimately lead to additional employment for U.S.-born workers... As a result, the main effect of reduced immigration is simply a smaller economy."

B. Heavy sectoral concentration

Shortages would be most acute where immigrant share is high:

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

Other estimates break down sector dependence similarly, and note that the U.S. labor market "faces a growing crisis as restrictive immigration policies exacerbate shortages in sectors reliant on immigrant workers—construction, agriculture, and healthcare."

Industries identified as most dependent include "agriculture, construction, hospitality (hotels and restaurants), and healthcare support (such as elder care)."

•Agriculture: 47% of workforce lacks work authorization, harvest delays are already reported

•Construction: 40% of workers in Texas and California are foreign-born; labor shortages have delayed projects

•Healthcare: 15% of nurses and 27% of aides are immigrants; loss of workers has worsened staffing crises

3. Short-term vs. long-term effects

•Short-term abrupt stop: "Reduced immigration contributes to labor shortages, driving inflationary pressures as the supply of immigrant-dependent goods and services shrinks." A sudden plunge "reduces the labor force available to fill jobs that businesses expect to fill".

•Evidence from removals: The "bracero exclusion" in 1964, which removed nearly half-a-million Mexican agricultural workers, "did not result in the promised boost to native-born farm wages and employment. Instead, jobs that had been previously filled by seasonal immigrant workers were either replaced by machines or eliminated entirely". More recent enforcement surges between 2008 and 2014 were found to "reduce the employment share of native-born workers, with harms concentrated among workers in sectors that relied on immigrant labor."

•Long-term structural effect: Because deaths are projected to outpace births by around 2033, immigration would become "the sole driver of population growth from that point forward". Without it, the labor force not only tightens but shrinks.

4. Counterarguments and Nuance

Not all economists agree a nationwide shortage is inevitable:

•"Not all economists believe that demographic aging is likely to cause a nationwide labor shortage. The ranks of people in their prime working years were stagnant for years before the pandemic, but labor was often plentiful"

•Some analysts argue "they don’t anticipate widespread economic reverberations including labor shortages... This is out of a labor force of nearly 170 million people", suggesting the aggregate effect may be modest if the cut is small relative to the total workforce, and that reductions in labor supply are partly offset by reductions in consumer demand.

Potential mitigations often cited:

•Higher wages and domestic labor mobilization — tapping underemployed groups, older workers, or increasing labor force participation.

•Automation and AI — construction automation, autonomous tractors, and AI diagnostics are being adopted to offset gaps.

•But limits are recognized: "Restrictive immigration policies can limit the supply of foreign workers, exacerbating labor shortages in sectors that rely heavily on immigrant labor, such as agriculture, construction, and healthcare." Many heavy-labor jobs "remain unfilled. This shortage limits economic productivity, output, and, in turn, GDP growth."

The consensus view from the National Academies and reviews cited by the Washington Center for Equitable Growth is that "more immigration increases the U.S. labor force, enhances productivity, and grows the economy, while deportations... are contractionary for the broader economy."

Bottom Line

•Stopping immigration entirely would almost certainly cause labor shortages over the next 10-30 years at the national level due to an aging, below-replacement-fertility native population, and would cause immediate acute shortages in agriculture, construction, hospitality, and healthcare.

•Reducing immigration moderately would still tightening labor markets in those sectors and accelerate the date at which the workforce begins to shrink, but economy-wide effects depend on scale, pace, and whether automation, wage increases, or productivity gains offset the loss.

•Historically and in recent natural experiments, cutting immigrant labor has not produced the expected gains in native employment or wages, but rather led to smaller output, delayed projects, and in some cases lower native employment in complementary jobs.

Citations (3)

1reuters.comNews and mediaquality 1.00
CBO sees US deficits rising over 30 years, economic growth slowing
Backs: “The demographic baseline. Advanced economies already face shrinking native-born workforces due to aging and low fertility. The Congressional Budget Office projects slower U.S. population growth over the next 30 years and notes: "Without immigration, the U.S.”
2equitablegrowth.orgNonprofits and think tanks
Economic research shows immigration is good for U.S. workers, the economy, and affordability
Backs: “Why stopping immigration creates shortages. A. Immigrants fill complementary, not just substitutable, jobs. Research summarizes that immigrants "fill both low-skilled jobs that complement native-born U.S.”
3ainvest.comNot yet classified
Immigration Policy and Labor Shortages: Navigating Sector Vulnerabilities and Tech-Driven Opportunities
Backs: “As a result, the main effect of reduced immigration is simply a smaller economy.". B. Heavy sectoral concentration. Shortages would be most acute where immigrant share is high: "With immigrant workers comprising 25% of construction labor, 66% of agriculture workers, and 15–28% of healthcare staff"”