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THE U.S.-BORN LABOR FORCE WILL SHRINK OVER THE NEXT DECADE  
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Josh Bivens
October 7, 2025
Economic Policy Institute
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_ Achieving historically ‘normal’ GDP growth rates will be
impossible, unless immigration flows are sustained _

Average annual labor force growth between business cycle peaks,
Economic Policy Institute

 

It is often underrecognized how much population aging is currently
reducing the growth rate of the U.S. labor force and will continue to
pull it down in coming decades. The share of the population that is
over the age of 65 (when labor force participation tends to take a
steep fall on average) is rising rapidly. This share was 12.4% in
2007, 17.9% in 2024, and will hit 21.2% by 2035 (CBO 2025b). A recent
EPI report (Gould et al. 2025) assessed trends in U.S. labor force
participation and reviewed the research literature about their drivers
and the potential effects of policy changes on these trends. One
upshot of this research literature is that even the most ambitious
policies to boost the labor force participation rate of the current
U.S. workforce would not materially change these trends.

Any decline in labor force growth necessarily leads to a decline in
the rate of growth of gross domestic product (GDP). GDP is the product
of the number of hours worked in an economy multiplied by productivity
(the average amount of output generated in an hour of work). If the
number of work hours falls because the labor force shrinks, this
essentially translates one-for-one into slower aggregate growth.
Policymakers who do not want to see the pace of GDP growth shrink
relative to the past history of U.S. growth really only have one
option: allowing larger flows of immigration. Absent this, other
policies to boost the U.S. labor force—while they might be wise
along many margins—will not restore overall GDP growth to anywhere
near its historic pace. In the rest of this policy brief, we lay out
some of the larger trends in U.S. labor force growth and the
implications of population aging for the future path of the labor
force and economic growth.

U.S. LABOR FORCE GROWTH HAS SLOWED A LOT IN RECENT DECADES, AND
U.S.-BORN LABOR FORCE GROWTH HAS SLOWED EVEN MORE

FIGURE A shows the average annual growth rate of the overall labor
force for a number of historical periods. We pick endpoints for these
periods that correspond with business cycle peaks to make sure that
sharp cyclical differences are not driving these trends. For two
recent periods (2007–2019 and 2019–2024), we also show the average
annual growth of just the _U.S.-born_ labor force.

Between 1948 and 1979, labor force growth averaged 1.8% annually. From
1979 to 2007, this pace slowed, but only slightly, averaging 1.4%
annually. However, in the two business cycles since 2007, labor force
growth averaged just 0.5%–0.6% annual growth. For the two most
recent business cycles, we have data on growth in the U.S.-born labor
force, and this growth is just 0.3% on average.

 The fast growth of the labor force between 1948 and 2007 and the
slowdown since then can be explained by three big demographic changes:
the Baby Boom that saw high fertility rates from the late 1940s to the
mid-1960s and then a sharply lower fertility rate since, the steady
influx of women into the labor force from 1948 until roughly 2000, and
population aging that has seen the share of the over-65 population
rise rapidly since 2007. The importance of population aging in driving
the much slower labor force growth since 2007 can be seen in many
exhibits presented in our previous report (Gould et al. 2025), which
highlighted the labor force participation rate of prime-age
workers—those between the ages of 25–54. These prime-age
participation rates stood at near all-time highs in 2024, meaning that
the decline in the labor force was not driven by falling age-adjusted
participation rates, but was instead just driven by aging.

POPULATION AGING OF U.S.-BORN WORKERS WILL ACCELERATE IN THE NEXT
DECADE

Figure A highlighted that growth in the U.S.-born labor force was even
slower than overall labor force growth after 2007. This makes sense
given that immigrants tend to be younger than the U.S.-born population
and that steady flows of net immigration buoy the U.S. labor force.
The drag on overall labor force growth stemming from sharp declines in
the U.S.-born labor force over the next decade will likely be quite
steep.

The Congressional Budget Office (CBO 2025a) forecasts growth in the
overall labor force and GDP for the U.S. economy over the next decade.
They are currently projecting annual labor force growth of 0.5% on
average between 2025 and 2035. Yet in demographic projections, the CBO
(2025b) forecasts that immigration will account for essentially 100%
of total U.S. population growth over this time span, and well over
100% of population growth after 2031. Given that 75%–80% of
immigration flows are people between the ages of 20 to 64, this means
that the U.S.-born population of those between the ages of 20 and
64—the vast bulk of the potential labor force—is forecast to
_shrink in every year for the next decade_.

FIGURE B highlights this, showing estimates of the population between
the ages of 20 and 64 for the years between 2025 and 2035.1
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We show the baseline growth of this population, but then also estimate
what growth would be if net immigration were halved or were driven by
zero (see the data appendix for explanations of how these were
calculated). The line showing zero net immigration essentially is the
path of labor force growth of just the U.S.-born population.

 REDUCTION OF NET IMMIGRATION FLOWS WOULD LEAD TO MUCH SLOWER LABOR
FORCE AND GDP GROWTH

If we assume that any changes in population levels do not change labor
force participation rates, we can make a rough inference about how
much any change in immigration levels would affect trends in labor
force and GDP growth in the coming decade. (Some more details on this
calculation are in the data appendix.)

FIGURE C shows current forecasts for growth in real
(inflation-adjusted) GDP from the CBO and from the Trump
administration’s Office of Management and Budget (OMB). The OMB is
forecasting far faster growth than the CBO over the next decade. This
is true even as the CBO is still projecting immigration flows over the
next decade that will be high enough to account for over 100% of U.S.
population growth post-2030.

 Because GDP is simply the product of hours worked and productivity,
the Trump administration would have to be forecasting either
significantly faster growth in hours worked (proxied by the size of
the labor force) or significantly faster productivity growth. But the
potential growth of hours worked by U.S.-born workers is essentially
driven entirely by demographic trends. Again, Gould et al. (2025)
highlight that there is very little scope for even the most ambitious
policy efforts to boost labor force participation rates of the current
U.S. workforce to raise these by more than a percentage point or two.
And even these ambitious and most effective policy changes largely
involve substantial investments in today’s children to make them
more likely to search for work as adults. This means that the payoff
period is well over a decade.

Given this limited scope for policy to boost labor force participation
rates, the only other margin along which the labor force could grow is
immigration. But the Trump administration is clearly looking to
shrink, not expand, net immigration flows. Given this stated policy
preference, we also calculate what halving net immigration flows or
reducing them to zero would do to CBO’s growth forecasts (for
details on how we estimated these, see the data appendix). Very
roughly, a halving of net immigration would reduce average annual GDP
growth by 0.2 percentage points annually in the coming decade, while
reducing net immigration to zero would reduce annual growth by 0.4
percentage points annually.

All of the discussion above implies that the Trump administration
forecasts could only be met by faster productivity growth. FIGURE D
shows the implied productivity growth assumptions adopted by the Trump
administration versus the CBO. It then shows the implied productivity
growth rates for the Trump administration forecast to hold in
scenarios in which net immigration flows were halved or driven to
zero. It is worth noting that the stated position of the Trump
administration to increase deportations to 1 million per year would be
(all else equal) roughly consistent with a halving of net immigration
flows if these flows returned to pre-2022 levels.2
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Finally, Figure D shows the historic average and maximum 10-year
productivity growth rates from each full business cycle since 1969.

 Even the unadjusted forecasts of CBO and the Trump administration
imply large differences in productivity assumptions—with the
administration assuming productivity growth that is a full percentage
point faster (or roughly double the pace) of CBO’s forecasts. For
the Trump administration GDP forecasts to hold even in the face of
reductions in net immigration flows, the assumptions regarding the
pace of productivity growth would have to further increase. In a
scenario of zero net immigration, for example, productivity growth
would have to reach 2.9% annually to meet the administration’s GDP
forecasts. For context, no full business cycle since 1969 has seen
productivity growth even close to this fast. The previous maximum was
the 2.4% productivity growth that characterized the 2000–2007
business cycle. On average since 1969, productivity growth over full
business cycles has averaged just 1.7%. In short, meeting the OMB
growth forecasts will be hard enough given current trends in net
immigration. If there is any reduction in these trends, productivity
growth would have to accelerate to levels not seen in decades.

 
CONCLUSION

The pace of overall GDP growth rises and falls essentially one-for-one
with the pace of labor force growth. For the next decade, the labor
force of the U.S.-born population will likely _fall_ each year. To be
clear, this does not necessarily imply great economic hardship. It is
the level of GDP _per capita_ that determines a country’s living
standards, not its level of overall GDP. (This fact is why, for
example, Denmark is considered a very rich country, while Bangladesh
is not, despite the latter having an overall GDP that is more than
three times as large).

But there are reasons besides its mechanical connection with overall
GDP growth for a country to want the labor force to grow steadily. One
reason is that a rising ratio of nonworkers to workers can make some
social insurance systems (like those that provide retirement income or
health care to older workers) more challenging to maintain. Given the
value of these systems to the nation’s welfare, anything that makes
them easier to sustain would be welcome.

Finally, any policymaker wanting to make large claims about the pace
of overall GDP growth that will occur under their watch is obligated
to make them consistent with basic facts about labor force growth,
potential productivity growth, and the potential effect of policy on
each of these. The degree to which labor force growth over the next
decade in the U.S. will be quite slow relative to the historic past,
and the pretty low possibility that even ambitious policy changes
outside of immigration policy can change this is important information
in this context.

DATA APPENDIXFIGURE B

CBO (2025b) provides estimates for growth in the 20–64 population
and net immigration overall. The background data included in that
report also provide net immigration forecasts each year by age (along
with sex and immigration status). Given this, we construct estimates
of how much growth in the overall 20–64 population will be driven by
net immigration. We then take forecasts of net immigration flows and
cut them in half or force them to zero to assess the effect of this in
growth of the 20–64-year-old population.

FIGURE C

GDP growth forecasts in the top two bars are obtained directly from
CBO (2025a) and OMB (2025). To obtain the estimate in the bar titled
“CBO with net immigration halved,” we make a calculation of how
much halving projected net immigration flows would affect labor force
growth in coming years. The calculated percentage change in the labor
force would, in turn, then change GDP growth one-for-one. We build off
the decline in the 20-64 population we estimated above. Because more
than 90% of the labor force in any year is accounted for by people
between the ages of 20 and 64, we multiply the change in the
20–64-year-old population by 90% to get a sense of how much changes
in this population translate into changes in the overall labor force.
This calculation implicitly assumes that changes in _population_ do
not have any effect on labor force participation _rates_. For example,
if a population changes by 100, and the labor force participation rate
of that population is (say) 80%, then the labor force will change by
80.

For the last bar in the figure, we do the same exercise, but this time
assuming that net immigration is zero, not just halved.

FIGURE D

The bar titled “implied OMB forecast given GDP projections”
assumes that CBO and OMB use the same forecasts for labor force
growth. Given this, the difference in their GDP forecasts must equal
the difference in their productivity forecasts. If the OMB ever
clarifies just how they obtained their GDP forecasts, we can modify
these calculations accordingly. Given the stated intent of the Trump
administration to reduce net immigration flows and given the findings
in Gould et al. (2025), it seems hard to see how the OMB could justify
faster labor force growth forecasts.

For the bar in Figure D titled “necessary productivity growth to hit
OMB GDP projection if net immigration was halved,” we use our
previous estimate of how much a halving of projected net immigration
flows would affect labor force growth and measure the difference
between the OMB GDP projection and the CBO GDP forecast that would
hold if labor force growth were reduced by a halving of net
immigration inflows. For the next bar, we do the same exercise but use
the estimate above for how much labor force and GDP growth would be
held back by net immigration falling to zero.

ACKNOWLEDGMENTS

The author thanks Joe Fast for research assistance and Grace Park for
editing. This project was made possible by financial support from the
Peter G. Peterson Foundation.

NOTES

1.
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use this age range because it is the one provided by the CBO 2025b
that is most relevant to potential growth in the labor force in the
coming decade.

2.
[[link removed]]Zipperer
(2025) notes that 1 million deportations would be an increase of
roughly 670,000 over previous baseline levels. CBO 2025b forecasts
that net immigration flows will average 1.2 million between 2025 and
2035. Importantly, this estimate was made before the large increase in
resources for immigration enforcement made possible by the passage of
the Republican-led budget bill that Trump signed into law in July
2025.

REFERENCES

Bureau of Economic Analysis (BEA). 2025. “National Income and
Product Accounts Table 1.1.6.” Accessed September 2025.

Bureau of Labor Statistics (BLS). 2025a. “Online Labor Force
Statistics Database, Current Population Survey.” Accessed September
2025.

Bureau of Labor Statistics (BLS). 2025b. “Total Economy Hours and
Employment Spreadsheet
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[Excel file]. Accessed September 2025.

Congressional Budget Office (CBO). 2025a. _The Budget and Economic
Outlook: 2025 to 2035_ [[link removed]].
January 17, 2025.

Congressional Budget Office (CBO). 2025b. _The Demographic Outlook:
2025 to 2055_ [[link removed]]. January 13,
2025.

Gould, Elise, Sarah Jane Glynn, Hilary Wething, and Josh Bivens. 2025.
_Good News and Bad News About U.S. Labor Force Participation: Many
Headwinds from the 2010s Are Gone, but We’re Not Investing Enough in
the Future_
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Economic Policy Institute, September 2025.

Office of Management and Budget (OMB). 2025. _FY 2026 Mid-Session
Review of the President’s Budget_
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Zipperer, Ben. 2025. _Trump’s Deportation Agenda Will Destroy
Millions of Jobs: Both Immigrant and U.S.-Born Workers Would Suffer
Job Losses, Particularly in Construction and Child Care_
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Economic Policy Institute, July 2025.

JOSH BIVENS is the chief economist at the Economic Policy Institute
(EPI). His areas of research include macroeconomics, inequality,
social insurance, public investment, and the economics of
globalization.

Bivens has written extensively for both professional and public
audiences, with his work appearing in peer-reviewed academic journals
(like the _Journal of Economic Perspectives_) and edited volumes (like
_The Handbook of the Political Economy of Financial Crises_ from
Oxford University Press), as well as in popular print outlets (like
USA Today, the Wall Street Journal and the New York Times).

Bivens is the author of _Failure by Design: The Story behind
America’s Broken Economy_ (EPI and Cornell University Press)
and _Everybody Wins Except for Most of Us: What Economics Really
Teaches About Globalization_ (EPI), and is a co-author of _The State
of Working America, 12th Edition _(EPI and Cornell University Press).

Bivens has provided expert insight to a range of institutions and
media, including formally testifying numerous times before committees
of the U.S. Congress.

Before coming to EPI, he was an assistant professor of economics at
Roosevelt University. He has a Ph.D. in economics from the New School
for Social Research and a bachelor’s degree from the University of
Maryland at College Park.

THE ECONOMIC POLICY INSTITUTE’S vision is an economy that is just
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The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think
tank working for the last 30 years to counter rising inequality, low
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We also know that research on its own is not enough—that’s why we
intentionally pair our research with effective outreach and advocacy
efforts as we fight to make concrete change in everyday people’s
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