The Effect of COVID-19 Immigration Restrictions on Post-Pandemic Labor Market Tightness

Isaacson, Maggie; Marks, Cassandra; Ricketts, Lowell R.; Rubinton, Hannah

Journal Article

The Effect of COVID-19 Immigration Restrictions on Post-Pandemic Labor Market Tightness

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.

Keywords: COVID-19; immigration; labor markets; labor market tightness;

JEL Classification: J61; J20; J40;