KEY POINTS
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Construction employment growth has been slow over the past two years, with immigration enforcement as a contributing factor.
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The construction sector is exposed to heightened immigration enforcement as foreign-born workers make up a notable share of the workforce.
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A National Bureau of Economic Research paper looked to quantify this effect, finding heightened enforcement has reduced immigrant worker participation in construction.
The construction industry has struggled to add jobs for some time, with employment growing by less than 2% between May 2024 and May 2026, according to the U.S. Bureau of Labor Statistics. A range of factors has weighed on construction hiring, including heightened immigration enforcement over the past year-and-a-half.
The impact of that enforcement was examined in a recent National Bureau of Economic Research (NBER) paper, which offers additional insight into the labor pressures now facing the industry.
How Construction and Immigration Enforcement are Related
The construction industry has been especially exposed to heightened immigration enforcement under the current administration because of its heavy reliance on foreign-born labor.
More than 28% of construction workers are foreign-born, according to the Bureau of Labor Statistics. Not all of those workers are unauthorized, but it is possible a meaningful share is.
The industry is also uniquely vulnerable because construction labor cannot be offshored. The work must be done on-site, which leaves contractors with limited ability to replace lost U.S. labor the way manufacturers or business-services firms can by shifting work overseas.
Construction Sees Increased Enforcement
The position on industry vulnerability helps frame one of the central findings of the paper “Labor Market Impacts of ICE Activity in Trump 2.0” by NBER, which attempts to quantify how increased immigration enforcement affects employment.
The authors find that heightened Immigration and Customs Enforcement activity reduced the employment rate of likely undocumented immigrants in high-impact sectors by 1.8 percentage points.
Those sectors include construction, manufacturing and other industries in which undocumented workers account for more than 5% of the workforce. The effect was even more pronounced for men in those sectors, whose employment rate fell by 3.5 percentage points.
The paper also found that the chilling effect— when workers stop showing up out of fear, not because they were arrested—of immigration enforcement has intensified under the current administration.
During the first Obama administration, earlier research found that each detention was associated with 2.3 likely undocumented workers leaving employment because of chilling effects. This latest NBER paper estimates that figure has now climbed to more than 7.
What it Means for Construction
Construction has struggled to expand its workforce, and heightened immigration enforcement has made that challenge more acute. The sector is especially exposed because a significant share of its workers are foreign-born, while construction labor, unlike work in some other industries, cannot be offshored.
The labor pool is not expanding at the pace the industry needs, and the outlook points to continued pressure. To mitigate these risks, firms will need to focus on retaining existing workers while building recruitment pipelines among demographic groups which may have been overlooked.
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