Trump framed a crackdown on immigration as a panacea for the country’s most pressing issues: fixing everything from the economy and the labor market to housing. But if history is any lesson, his hardline approach could backfire. A new report from the libertarian think tank Cato Institute found that immigration quotas could actually lead to the worsening of economic outcomes for native-born Americans for generations, undercutting the promise of prosperity Trump has touted.

Researchers examined data from the 1920s, when the U.S. enacted one of the most intense immigration crackdowns in history prior to the ones the country has experienced under Trump’s two terms. The researchers found a direct link between immigration quotas and the economic mobility of U.S.-born white men, who made up the lion’s share of the labor market at the time. In U.S. counties more exposed to the quotas, sons were significantly less likely to find a higher-status job than their fathers.

As the Trump administration carries out ICE operations nationwide, the finding adds to a growing body of evidence that immigration crackdowns may fall short of the president’s “America First” promises. Another recent study from the National Bureau of Economic Research (NBER) crunched national labor market and ICE arrests data from the past year and found that for every six immigrants removed from the workforce, one native-born worker lost their job when comparing labor effects in areas with large upticks in ICE arrests to places with fewer arrests.

There are growing concerns that removing immigrants from the workforce is adding to critical worker shortages in industries like construction. A recent National Foundation for American Policy (NFAP) policy brief found a notable drop in the labor-force participation rate for U.S.-born workers age 16 and older, from 61.4% in February 2025 to 61% in 2026. 

What the 1920s can teach us about the 2020s

In the Cato study, the researchers examined the effects of U.S. immigration laws passed in 1921 and 1924, which implemented a restrictive quota system that ended an age of mass migration between 1850 and 1920 when over 30 million Europeans had migrated to the U.S. By measuring quotas on a county-level based on preexisting immigrant settlement patterns, the study compared that geographic overlay to data from the 1900, 1920, and 1940 U.S. censuses and the Census Tree project, a massive database of record links among U.S. censuses. These combined data allowed the researchers to link U.S.-born sons to their adult outcomes and to track family background, geographic location, and occupational status over time.

The findings found a dramatic decrease in long-term earnings for U.S.-born white men through adulthood. A five percentage point increase in exposure to an immigration quota reduced weekly wages by 2.6%. However, for Black men, the results were actually slightly positive, though not significant enough to rule out the possibility of no effects.

The economy of the 1920s is different from the economy of today. The labor dynamics in the time of the dawn of the radio, the expansion of the electrical grid, and the early rumblings of mass consumerism are far different from the economics of the AI age. 

Still, the researchers offered a few theories for why this dynamic played out. One was that immigrants from areas not restricted by the quotas, such as from other parts of the U.S., or Mexico and Canada, simply replaced those in the labor market who were. But their data showed this substitution was concentrated in urban areas and didn’t fully account for the magnitude of the effects.

Other explanations touch on the complementarities between immigrant and native workers, the idea that immigrants don’t compete with native workers but enable them to specialize in higher-skilled tasks, raising their productivity and earnings in the process. In this case, immigrants may have made educated workers more productive and enabled them to specialize in higher-quality tasks, and without immigrants, native-born job prospects deteriorated.

But if the 2020s are anything like the 1920s—and reports like NBER’s labor market research and NFAP’s policy brief indicate that may be the case—the adverse economic impacts of Trump’s immigration crackdown may take years to reverse. A recent Goldman Sachs report found an 80% decline in net immigration to the U.S., plummeting from an average of approximately 1 million people per year in the 2010s to a projected 200,000 in 2026.