Do Immigration Restrictions Affect Job Vacancies? Evidence from Online Job Postings

Abstract

Elior Cohen is an economist at the Federal Reserve Bank of Kansas City. Samantha Shampine is a former research associate at the bank. This article is on the bank’s website at www.KansasCityFed.org The U.S. workforce relies heavily on immigration, with one out of every six workers originating from outside the country’s borders in 2021. However, the supply of new immigrant labor has varied widely over the past decade. Although an average of 1 million immigrants entered the country annually from 2000 to 2016, a series of policy changes and the COVID-19 pandemic led to a rare decline in immigrant arrivals from 2016 to 2021. This period of reduced immigration coincided with and exacerbated already severe labor shortages in the U.S. labor market, leading employers and firms to look for new sources of labor. In recent years, online job postings have become more prevalent as a method of searching for labor. In addition to providing information on the overall demand for labor in the economy, online postings contain rich data on a job’s characteristics, location, industry, offered wages, and skill requirements. These data could help reveal how different dimensions of labor demand change in response to declining immigration. However, little is known about the link between immigration and online job postings. In this article, we examine how declining immigration flows influence online job vacancies in labor markets with different levels of reliance on immigrant labor. We find that the growth rate of online job postings