More answers like this
Muse Spark 1.2Oct 31, 2026meta/muse-spark-1.2-20260805

Will stopping immigration cause labor shortages?

Your question touches on jobs, demographics, and shortages — I'll gather current evidence on how immigration affects labor supply.

Stopping or sharply reducing immigration is very likely to cause or worsen labor shortages in most advanced economies, but not evenly across all industries - evidence points to concentrated, structural shortages rather than a uniform shortage.

1. Why economists expect shortages without immigration

a) Demographics - shrinking native workforce

Most Western countries have birth rates well below the replacement level of 2.1, resulting in aging populations and shrinking workforces. Without immigration, populations would decline.

In the U.S. specifically:

•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.
•Brookings estimates the population declines by 7 million by 2040 without immigration.

Across the developed world, labor shortages have reached critical levels in 2026. Declining birth rates, aging populations, youth emigration, and shifting career preferences have created structural gaps that threaten economic growth, supply chains, and essential services.

Examples in 2026:

•Japan faces over 100,000 unfilled positions in restaurants, construction, caregiving, and manufacturing
•Germany is grappling with over 100,000 vacant truck driver positions alone, plus major gaps in engineering, healthcare, IT, and skilled trades
•Italy faces more than 2 million vacant positions, particularly in agriculture, tourism, healthcare, and manufacturing

b) Immigration has been the engine of labor force growth

Research from the Federal Reserve System documents:

•During 2019-2024, all employment growth in the U.S. stemmed from increased employment of foreign-born workers, while employment among native-born individuals remained at prepandemic levels.
•Immigrants accounted for all net growth in the trades workforce between its post-recession low in 2013 and 2024.

Federal Reserve research finds that during the high-immigration period of 2021-2024, immigration alleviates these shortages by helping fill vacancies and dampening wage growth. In the authors' model, a surge in immigration alleviates these shortages by expanding the pool of low-skill labor, which reduces the value of a job and the equilibrium tightness.

Conversely: Lower immigration leads to higher wages for low-skilled workers and higher consumer prices.

2. Which sectors are most vulnerable

Sectors with chronic labor shortages and limited domestic supply pipelines rely heavily on foreign-born workers.

U.S. estimates:

•With immigrant workers comprising 25% of construction labor, 66% of agriculture workers, and 15–28% of healthcare staff.
•In construction and extraction occupations, the foreign-born share of employment rose from about 22% in 2003 to almost 36% in 2024.

Analysis of the current U.S. crackdown estimates policies have reduced the labor force by an estimated 6.8 million workers by 2028, with 4 million attributed to crackdowns on undocumented immigration and 2.8 million linked to changes in legal immigration. Between 2024 and 2025, net migration dropped 77 percent because of policy changes.

3. Does removing immigrants create jobs for native-born workers?

Recent U.S. natural experiments suggest no:

•One year into President Donald Trump’s immigration crackdown, there’s little evidence that closed borders are boosting employment for US-born workers. Net migration into the US may have been negative in 2025 for the first time in at least 50 years, yet that squeeze coincided with a rise in joblessness among the native-born.
•Heightened immigration enforcement during the second Trump administration has not expanded job opportunities for U.S.-born workers and is associated with a reduction of employment for U.S.-born men with no more than a high school degree.
•Employment among remaining immigrants declines 4% on average after an Immigration and Customs Enforcement surge, likely due to a "chilling effect".
•Across the cities with the sharpest rise in ICE arrests, employment fell 0.73% below what they would have seen absent the surge, and 1.48% in the 51 cities observed at least six months out. The enforcement surge cost 668,000 jobs. The deepest direct hits fell on construction and on accommodation and food services.

Economists explain this as a structural mismatch: In many labor-intensive roles that rely heavily on immigrants, employers can’t easily replace them with American workers.

•The idea that tighter immigration policy would automatically translate into more jobs for native-born workers is not showing up in the data.
•A smaller immigrant labor pool does not automatically leave a usable set of jobs waiting for native-born workers.

One Oxford Economics analysis found the crackdown has the potential to tighten labor market conditions, but analysis shows this has yet to unfold. Job openings and unemployment rates in high-exposure industries and geographies show little divergence from their counterparts. Lags between migration and joining the labor market mean the impact of slowing migration is delayed but not postponed indefinitely.

4. When would shortages not happen?

Stopping immigration would not necessarily cause widespread shortages if:

1.The native population is young and growing fast enough to replace retirees - rare in OECD countries today.
2.Wages and working conditions rise enough to draw inactive native workers back into the labor force. Some researchers argue in the long run, a decline in the immigrant population could lead to higher wages and more flexible working conditions, drawing more people into the labor force who are not currently working, but note that men in their 20s and 30s without college degrees who are not now working could benefit in particular but may have to overcome health challenges, criminal records or other issues.
3.Automation, offshoring, or reduced demand offsets the need for workers. During economic slowdowns, shortages are masked - job openings tumbled in December to the lowest level since 2020.

However, economists describe the shrinking pool of available labor as a potential "speed limit" for the economy. If labor demand picks up, "you could see that labor demand picks up a bit, and then some of those shortages could be revealed".

Bottom line

•Short answer: Yes, in countries with aging populations and low birth rates like the U.S., Canada, Germany, Japan, Italy and South Korea, stopping immigration would very likely deepen labor shortages, especially in agriculture, construction, hospitality, caregiving and healthcare, and logistics.
•It would also reduce overall economic growth by shrinking the labor force, even if it modestly raises wages for some low-skill native workers and raises consumer prices.
•The shortages are not immediate in a weak economy, and not every occupation would be affected - high-skill professional jobs with large native supply are less exposed than manual, seasonal, and care work.

If a government wants to reduce immigration without creating shortages, evidence suggests it would need parallel policies: higher native labor-force participation, expanded vocational training, higher wages/conditions, and automation - none of which fill gaps quickly.

Citations (3)

  1. 1visasupdate.comNot yet classified
    Global Labor Shortages 2026: Why Japan, Germany, Spain, Greece, South Korea, Italy and More Are Turning to Immigration and Regularization to Fill Millions of Vacant Jobs

    Backs: “Brookings estimates the population declines by 7 million by 2040 without immigration. Across the developed world, labor shortages have reached critical levels in 2026. Declining birth rates, aging populations, youth emigration, and shifting career preferences have created structural gaps that threaten economic growth,…”

  2. 2ox.ac.ukAcademic
    Immigration, Labor Shortages, and Labor Market Dynamics

    Backs: “Italy faces more than 2 million vacant positions, particularly in agriculture, tourism, healthcare, and manufacturing. b) Immigration has been the engine of labor force growth. Research from the Federal Reserve System documents: During 2019-2024, all employment growth in the U.S. stemmed from increased employment of…”

  3. 3bloombergtax.comNews and media
    Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

    Backs: “estimates: With immigrant workers comprising 25% of construction labor, 66% of agriculture workers, and 15–28% of healthcare staff. In construction and extraction occupations, the foreign-born share of employment rose from about 22% in 2003 to almost 36% in 2024.”