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The Effect of COVID Immigration Restrictions on Post-Pandemic Labor Market Tightness

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Abstract

During the COVID-19 pandemic, there were unprecedented shortfalls in immigration. Concurrently, as the economy recovered, the labor market became tight, with the number of vacancies per unemployed worker reaching two, more than twice its pre-pandemic average. In this article, we investigate whether these two trends are connected. We find no evidence to support the hypothesis that the immigration shortfalls caused the tight labor market, for two main reasons. First, while the immigration deficit peaked at about two million workers, this number had largely recovered by February 2022, just as labor market tightness was increasing. Second, we do not find that states, cities, or industries most impacted by immigration restrictions also experienced larger increases in labor market tightness.

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  • Maggie Isaacson & Cassandra Marks & Lowell R. Ricketts & Hannah Rubinton, 2024. "The Effect of COVID Immigration Restrictions on Post-Pandemic Labor Market Tightness," Working Papers 2024-003, Federal Reserve Bank of St. Louis, revised 20 Nov 2024.
    • Handle: RePEc:fip:fedlwp:97626
    DOI: 10.20955/wp.2024.003
    Note: Publisher DOI: https://doi.org/10.20955/r.2024.11
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    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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