San Francisco Fed Study Links Immigration Curbs to Slower Labor Force Growth, GDP Drag

A Federal Reserve Bank of San Francisco research paper concludes that unauthorized immigration under the Biden administration boosted U.S. employment in labor-shortage sectors, while enforcement crackdowns risk slowing residential construction and AI infrastructure development. The study found that a 1% increase in the unauthorized local workforce raises local employment by 0.92%, demonstrating a near one-for-one relationship between immigrant labor supply and job creation in manufacturing, construction, and hospitality. Researchers Daniel Wilson and Xiaoquing Zhao analyzed data from 3,100 U.S. counties, comparing high-immigration periods against enforcement eras. The Congressional Budget Office now projects labor force growth will slow to 0.4% annually from 2026 to 2034, down from 1.6% during the Biden years, resulting in 2.4 million fewer workers over the next decade. The CBO forecasts GDP growth of 1.8% annually through 2036, below the 2.3% pace from 2010 to 2019, citing reduced net migration as a primary constraint on economic expansion.