The economic chilling effect of Trump's immigration crackdown

It's more evidence that the labor market isn't really a zero-sum contest, where immigrants and native workers battle over a fixed number of jobs in a kind of labor market Hunger Games, and the newcomers take the jobs of or undercut the people already here. Instead, it adds to a large and growing body of evidence that, actually, immigration helps grow core industries and the overall economy, which creates jobs and has other benefits for native workers. Less of a Hunger Games, and more like… what's the opposite of a Hunger Games… a potluck?

NEW YORK, NEW YORK - MARCH 24: Immigration and Customs Enforcement (ICE) agents patrol Terminal C at LaGuardia Airport on March 24, 2026 in New York, New York. Michael M. Santiago/Getty Images/Getty Images North America

Michael M. Santiago/Getty Images/Getty Images North America

How Trump 2.0 transformed immigration enforcement

One of the crucial datasets East relies on in her paper — national immigration enforcement under the second Trump administration — is accessible because of the work of a nonprofit called the Deportation Data Project.

The Deportation Data Project, which was founded by a political scientist and two lawyers, has successfully obtained immigration enforcement data through the Freedom of Information Act, enabling researchers like East to crunch it.

Before we get into the economic impact, it's worth getting into the data on immigration enforcement itself. The Deportation Data Project recently published an analysis of the data they've obtained, to see what happened during the first year of the second Trump administration.

They found that, after President Trump took office in January 2025, arrests by Immigration and Customs Enforcement (ICE) more than quadrupled.

But the Trump administration did more than just increase the total number of arrests. It also transformed how these arrests are carried out. Federal authorities began enforcing immigration laws much deeper in the interior of the nation, as opposed to its more traditional zone near the border. And, the authors write, they dramatically increased the number of "street arrests," or community arrests, in neighborhoods, worksites, immigration courts, and check-in appointments at ICE offices.

"Before 2025, ICE arrests were mostly not arrests in the usual sense of the word," the authors of the Deportation Data Project report write. "Instead, they were transfers of custody from jails or prisons. In such transfers, noncitizens who were initially arrested on criminal charges (typically unrelated to immigration law), are moved by ICE to immigration detention facilities, where they are held for civil violations of immigration law." The Obama administration, for instance, relied heavily on these types of arrests, where undocumented immigrants are transferred from jails and prisons to ICE custody and then deported.

In 2025 and early 2026, the Trump administration doubled those traditional types of ICE arrests (aka transfers of custody). More dramatically, however, the Trump administration increased community (or "street") arrests by more than elevenfold, which, the authors point out, "explains why ICE street arrests seem like a new phenomenon."

With a large increase in community arrests, the Trump administration also ramped up arresting noncitizens without criminal records. The authors find there was an "eightfold" increase in arrests of noncitizens without a criminal conviction.

" ICE activity in the second Trump administration is the most indiscriminate it's been in the modern era," East says. "To immigrants living in our country, it has felt like leaving your house for any reason could cause an interaction with ICE, and could cause you to get arrested and potentially deported."

And that has real economic consequences. Because it's not just the physical removal of immigrants from communities that affects the economy. In fact, East says, the larger economic effect comes from the fact that the undocumented immigrants who remain here have been scared to go about business as usual.

East has found this "chilling effect" during mass deportation efforts in the past, including under the Obama administration. But, she says, it's loomed larger during the Trump administration, and it has been the driver of the negative economic outcomes that she and her co-author find in their new study.

The economic fallout

In her new study, East, together with University of Colorado Boulder economist Elizabeth Cox, takes this immigration enforcement data from the Deportation Data Project and combines it with economic data from the U.S. Census Bureau and Bureau of Labor Statistics to provide what they call "the first national, causal empirical evidence on the labor market impacts of immigration enforcement in the second Trump administration."

Their methodology is pretty simple. To isolate the effect of immigration enforcement on the labor market — from the gazillion other things affecting it — the economists take advantage of the fact that the Trump administration didn't enforce immigration laws everywhere equally. In what's known as a "difference-in-differences" approach, the economists basically compare places where the Trump administration vigorously enforced immigration laws to places where they didn't, and then see how workers in these areas fared over time (specifically, the first nine months of the administration).

The economists focus on two groups of workers, both aged 20 to 64. The first is workers born in the United States. The second is workers who they classify as "likely undocumented," namely "foreign-born individuals with at most a high school degree or equivalent who work in sectors where undocumented workers are over-represented." They further break down these groups by sex and educational attainment.

For likely undocumented workers who remained in the U.S., the economists find "a meaningful chilling effect" in which they reduce their employment by "a significant 4%." They find this effect is driven by men, "who make up over 90% of those arrested by ICE in our time period."

The economists then turn to U.S.-born workers. "And we find that for U.S.-born workers, overall there are no positive effects on employment or wages, and that actually for U.S.-born workers who are in the sectors that are most heavily reliant on undocumented workers — that they are harmed as a result of increased ICE activity," East says.

The U.S.-born workers most negatively affected, the economists find, seem to be men with "at most a high-school education" who work in sectors that rely on undocumented labor and were hit the hardest by ICE arrests and deportations.

" We find that for every six fewer undocumented workers working in a local labor market, that there is one fewer U.S.-born worker working in that labor market," East says.

There's a classic argument against immigration: that immigrants take jobs from U.S.-born workers or drive down wages. But this study — like many before it — suggests the labor market isn't that simple. It suggests that immigrants and native-born workers often don't compete against each other for the exact same jobs.

"Especially undocumented immigrants, they typically  take lower-paid, more dangerous, more dirty, more seasonal, less reliable jobs," East says. And, research suggests, "employers are not able or willing to raise wages in order to attract U.S.-born workers to take those jobs."

Meanwhile, immigrant labor helps core industries operate and grow. And when immigrant workers disappear from those industries, East says, employment prospects can worsen for native-born workers too.

East gave an example from the construction sector. " If a construction company is having a really hard time finding construction site laborers because of ICE activity, they're gonna build fewer homes, they're gonna build fewer buildings in general, and they're gonna hire less in general, including hiring less U.S.-born workers," East says.

To use econ jargon, this study, like many before it, suggests that immigrants tend to complement rather than substitute for native-born workers. Again, the labor market seems to be less of a Hunger Games, and more like a potluck.

It's conceivable, however, that there are some sectors that are more zero-sum, and immigrants do displace or undercut native workers. For example, we did a two-part newsletter series on the Chinese Exclusion Acts, which was the first major immigration crackdown in U.S. history. We spoke to Nancy Qian, who co-authored a study on the effects of that crackdown on the economy. And she found that white miners, who competed with miners from China, seemed to benefit economically from exclusion. But even in Qian's study, basically everyone else suffered economically from that 19th-century immigration crackdown.

East's study focuses on the labor market, but that's only one part of the broader economic picture. Undocumented immigrants are also consumers, injecting money into the economy, and taxpayers who, according to the nonpartisan Congressional Budget Office, boost government revenue. And their labor could also help lower the price of goods and services. East says she's currently working on a study that looks at this. Undocumented immigrants make up a significant share of the labor force in industries like food service, agriculture, childcare, and construction.

One final note on this new study is it's a working paper, which means it hasn't gone through a peer-review process. That said, its findings support a much larger body of research on the effects of mass deportations.

"Whether you're studying mass deportations today, whether you're studying mass deportations in the first Obama administration, as I did before, or whether you're studying mass deportations in the 1930s, as some of my friends in economics have done, you see the same pattern of results: which is that mass deportations are not only harmful for immigrant workers themselves, but they're harmful for U.S.-born workers and the labor market more broadly," East says.

We reached out to the U.S. Department of Homeland Security, which oversees immigration enforcement, to get their response to this study, which suggests that the Trump administration's immigration crackdown has had negative economic impacts. A spokesperson said: "Let's be clear, if there was any correlation between rampant illegal immigration and a good economy, Biden would have had a booming economy. Removing these criminals from the streets makes communities safer for business owners and customers."

A change of tactics

After the killings of Renee Good and Alex Pretti in Minneapolis, the Trump administration appeared to shift its immigration enforcement strategy — not just in Minneapolis, but nationwide.

In their analysis of ICE activity published last month, the Deportation Data Project found that enforcement nationwide fell meaningfully, "with street arrests declining to roughly their September 2025 levels." But, they wrote, "it is unclear whether this decline in enforcement will persist; appropriations from the 'One Big Beautiful Bill' will allow ICE to continue to hire more officers and expand detention capacity."

East's new study looks at the first nine months of the Trump administration. And, she says, she's now crunching the numbers on what's happened since then. On the one hand, she says, " the number of these arrests that might have the biggest chilling effects is falling."

But, on the other hand, " given the spectacle that we saw in 2025, it may be hard to sort of reverse that effect, or at least reverse that effect in any quick way," East says. "I think we'll need to investigate that in the data itself."

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