Will stopping immigration cause labor shortages?

Will halting immigration trigger labor shortages? I'll pull the latest data and research on impacts.

Yes, according to most economists, Federal Reserve research, and Congressional Budget Office projections - stopping immigration would cause and worsen labor shortages, particularly over the long term.

1. Short Answer: Yes - Broad Consensus

> Stopping all immigration to the United States would likely result in labor shortages

Analysts have noted that immigration has plummeted by more than 90% compared to previous levels, resulting in a substantial supply shock

> Recent immigration policies have led to a notable reduction in the number of immigrants entering the U.S. ... The decrease in the immigrant population means fewer workers are available to fill jobs, leading to labor shortages in various sectors

2. Why Demographics Make Immigration Critical

The United States is aging and has low fertility, so natural population growth is stalling.

Similar wording from Indeed Hiring Lab:

> "The labor market implications of this are inseparable from a longer-term demographic reality: the United States is aging, and immigrants, on average, are more likely to be of prime working age than native-born Americans," ... "Put simply, immigration will soon become the primary mechanism keeping the population and the labor force growing. Without it, the U.S. will not just be facing a tighter labor market, but a shrinking one."

Historical counterfactual:

> 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

3. CBO Long-Term Projections

According to the latest estimates from the Congressional Budget Office (CBO), there is no end to this trend in sight... In the CBO's projections, without immigration flows, the population will begin to shrink by 2034—just a decade from now

Other CBO summaries:

> Without immigration, the U.S. population would begin to shrink in 2033

> Without immigration, the population would shrink beginning in 2033, in part because fertility rates are projected to remain too low for a generation to replace itself

Even with immigration at pre-pandemic average levels, working-age population growth would hit historically low levels due to aging:

> Even with immigration levels matching the 2010–2019 decade, working-age population growth would hit a historically low 550,000 annually due to aging demographics and flat birth rates from 20 years ago

And:

> A 2021–2023 immigration surge temporarily boosted growth, but sharp immigration curtailment in 2024–2025 plus continued retirements drive working-age population growth to near-1970 lows, risking future labor shortages

Projections of scale:

> The CBO projects that reduced immigration will shrink the labor force by 15 million jobs by 2035 according to analysis

One researcher projects:

> Her research projects the U.S. labor force could shrink by about 5.9 million workers, or 3.7%, between 2025 and 2032, with Baby Boomer retirements and lower immigration driving much of the decline

4. Recent Evidence: Immigration Eased Shortages, Its Reversal Created Them

Federal Reserve Bank of Kansas City analysis of 2022-2023 found:

> Overall, this analysis underscores how the recent increase in immigration has helped stabilize the labor market ... In industries and states that have struggled to fill positions, the arrival of immigrant workers has eased labor shortages

Specifically:

> The left panel of Chart 3 shows that 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

Reversing that surge has opposite effects:

> A sudden plunge in immigration reduces the labor force available to fill jobs that businesses expect to fill, which Brookings models say will dampen employment, GDP, and consumer spending and push sustainable monthly job growth well below historical norms—perhaps to 20,000–50,000 or even negative territory in 2026

Recent Brookings estimate of crackdown:

> "Of the 668,000 jobs lost, an estimated 51,000-297,000 would have been held by American-born workers," ... "Losses [were] concentrated in immigrant-intensive sectors but spread well beyond them. The deepest direct hits fell on construction and on accommodation and food services, but industries with very few immigrant workers—such as arts and entertainment—also contracted sharply."

5. Most Affected Sectors

Immigrant workers are overrepresented in industries with chronic shortages and limited domestic supply pipelines

> The survey also found 12% reported workers leaving or failing to appear because of actual or rumored immigration enforcement, while 16% reported subcontractors losing workers

> The agriculture, construction, healthcare, and food processing industries that depend heavily on immigrants will feel the impact for years

6. Can Shortages Be Avoided Without Immigration?

Economists discuss four routes to sustain labor supply if population stalls: immigration, higher labor force participation, more hours per worker, and productivity growth

However, participation has limits:

Productivity/AI could offset some need, but demographics could have a larger effect on the labor market than AI.

In immigration-as-zero-sum terms: "in terms of the number of people engaged in global labor market activity, immigration is a zero-sum proposition: a labor-supply gain for one country is a labor-supply loss for another" - but for the U.S. specifically, stopping it means shrinking.

Bottom line: While stopping immigration might reduce competition for some specific low-skill jobs in the very short run, multiple federal and academic models conclude it would reduce total employment, GDP, and worsen labor shortages economy-wide - especially after 2030 when without immigration the population is projected to shrink - with the most acute shortages in construction, agriculture, hospitality and long-term care.