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

Maggie Isaacson, Cassandra Marks, Lowell Ricketts and Hannah Rubinton

No 2024-003, Working Papers from Federal Reserve Bank of St. Louis

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: immigration; labor market tightness; COVID-19; wages (search for similar items in EconPapers)
JEL-codes: J20 J40 J61 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2024-01, Revised 2024-11-20
New Economics Papers: this item is included in nep-mig and nep-ure
Note: Publisher DOI: https://doi.org/10.20955/r.2024.11
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Published in Federal Reserve Bank of St. Louis Review

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DOI: 10.20955/wp.2024.003

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