Shortly after President Trump’s 2025 inauguration, neighborhoods like Chicago’s Little Village grew unusually quiet as word spread of large-scale ICE enforcement. That fear — more than just the physical removal of workers — is central to new evidence that the administration’s immigration crackdown hurt local labor markets.
Data and method
Researchers Chloe East and Elizabeth Cox used newly available enforcement records from the Deportation Data Project (obtained via FOIA) combined with Census Bureau and BLS data to estimate the labor-market effects of the second Trump administration’s ramped-up enforcement. Their working paper, Labor Market Impacts of ICE Activity in Trump 2.0, uses a difference-in-differences design: they compare places with heavy ICE activity to places with less enforcement over the first nine months of the administration to isolate the causal impact of intensified immigration enforcement.
What changed in enforcement
After January 2025, ICE arrests more than quadrupled, but the shift was not just in numbers. The agency dramatically expanded “community” or “street” arrests — in neighborhoods, worksites, courts, and ICE offices — increasing them by more than elevenfold. Transfers of custody from jails (the more traditional practice) also doubled, and arrests of noncitizens without criminal records rose roughly eightfold. The enforcement therefore became both deeper inside the country and broader in who it targeted.
The chilling effect
East and Cox find the largest immediate impact came from what they call a “chilling effect.” Undocumented workers who remained in place reduced their labor supply: likely-undocumented workers (defined as foreign-born people with at most a high-school diploma working in sectors where undocumented labor is concentrated) cut employment by about 4%, a decline driven almost entirely by men. Fear of arrest at work, on the way to work, or while shopping or checking in with ICE kept people from participating fully in the economy.
Effects on U.S.-born workers
Contrary to the idea that mass deportations free up jobs for native-born workers, the study finds no overall employment or wage gains for U.S.-born workers. In fact, in industries that heavily rely on undocumented labor — construction, food service, agriculture, childcare, and similar sectors — U.S.-born workers, especially men with a high-school education or less, were harmed. East summarizes the relationship succinctly: for every six fewer undocumented workers in a local labor market, there is roughly one fewer U.S.-born worker employed there.
Why native workers can be hurt
The results support a large literature showing immigrants often complement rather than substitute for native workers. Undocumented workers frequently fill lower-paid, seasonal, or more hazardous roles that native workers are unlikely to take even if wages rose. Their presence allows firms to operate at scale; when those workers disappear or stop working out of fear, firms may cut back production, stop new projects, or hire less overall — including fewer native-born workers. In construction, for example, difficulty finding laborers can lead firms to build fewer homes and take on fewer projects, reducing hiring across the board.
Scope, limitations, and broader effects
The paper is a working paper and has not yet completed peer review, but its findings are consistent with prior research on the economic harms of mass deportations. The study focuses on labor-market outcomes; East notes that undocumented immigrants also act as consumers and taxpayers, contributing to demand and government revenue, and that their labor helps keep prices lower for goods and services. She is working on further research to quantify these broader effects.
Response and subsequent enforcement trends
The Department of Homeland Security disputed the economic interpretation, arguing that removing undocumented criminals improves safety and business conditions. Enforcement tactics shifted later in 2025 after high-profile incidents; the Deportation Data Project reported a meaningful decline in street arrests to roughly September 2025 levels. But whether the chilling effects from the earlier spectacle will reverse quickly — or persist because of lingering fear and reputation effects — remains uncertain and requires further data.
Bottom line
The Trump administration’s second-term enforcement surge did more than remove some undocumented workers: by expanding community arrests and targeting people without criminal records, it generated fear that reduced labor-force participation among the remaining undocumented population. That chilling effect, combined with the disruption to industries that depend on immigrant labor, produced no employment gains for U.S.-born workers and, in many local markets, reduced job opportunities for working-class native men. The evidence points to immigration enforcement having complex, often negative, effects on local economies rather than freeing up jobs for native workers.