If 3,000 unauthorized immigrants are deported every day, the labor force will decline by roughly 1 million people in 2025.
Lowering the labor force by 1 million will reduce the participation rate by 0.4 percentage points, which will lower the unemployment rate, lower job growth, and increase wage inflation, particularly in the sectors where unauthorized immigrants work—namely construction, agriculture, and leisure & hospitality.
In short, deportations are a stagflationary impulse to the economy, resulting in lower employment growth and higher wage inflation.
For more discussion and quantification, see this new working paper by Edelberg, Veuger, and Watson.
Sources: ICE, Haver Analytics, Apollo Chief Economist
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