Shortly after Inauguration Day in 2025, Planet Money visited Little Village, a predominantly Mexican-American neighborhood in Chicago. It felt oddly quiet for what was usually a bustling part of the city, almost like a ghost town. The Trump administration had signaled it was about to do big ICE raids there and eventually did. Many in the community seemed to be scared to go about business as usual. There seemed to be a clear "chilling effect" on their economic activity — like going to work, shopping, eating out, and so on.
For that episode, we spoke with Chloe East, an economist at the University of Colorado Boulder, who has done extensive research on the economic effects of deportations. But back then, the only way to gauge the potential fallout from the second Trump administration's immigration crackdown was to look at past deportation efforts. Well, we now have data from last year's immigration crackdown. East and a co-author, Elizabeth Cox, recently released a new working paper, "Labor Market Impacts of ICE Activity in Trump 2.0," which analyzes how Trump's beefed up immigration enforcement affected employment, both for immigrants and workers born in the United States.
So, did the immigration crackdown help the job prospects of U.S.-born workers? East says no. "The mass deportations in Trump 2.0 are not helping the labor market overall and not creating more job opportunities for U.S.-born workers," East says. In fact, she and her co-author find evidence that, if anything, the clampdown has hurt the employment prospects of U.S.-born workers, particularly working-class men who work in industries that are heavily reliant on undocumented workers, like construction.
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?
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.
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 agriculture, construction, hospitality, and cleaning services. Their participation in these sectors is crucial for their operation and growth. The reduction in this labor force, whether through deportation or the fear of it, can lead to significant disruptions. For instance, in agriculture, a shortage of workers can result in crops left unharvested, leading to economic losses for farmers and potentially higher food prices for consumers.
In construction, as East noted, fewer available laborers can mean fewer building projects, impacting not only the construction companies but also related industries and the availability of housing. The "chilling effect" extends beyond direct employment. When undocumented immigrants are afraid to leave their homes or engage in economic activities, their reduced consumer spending affects local businesses, from restaurants and retail stores to service providers. This decreased demand can have a cascading effect, slowing down local economies, particularly in areas with a substantial immigrant population.
The methodology employed by East and Cox, using a difference-in-differences approach with data from the Deportation Data Project and government economic statistics, provides robust evidence of the causal link between intensified immigration enforcement and negative labor market outcomes. By comparing areas with differential enforcement intensity, they were able to isolate the specific impact of ICE activity on employment and wages for both U.S.-born and likely undocumented workers.
The findings underscore the interconnectedness of the labor market and the broader economy. The reduction in the undocumented workforce, driven by both deportations and the fear of enforcement, not only affects the availability of labor in specific industries but also impacts consumer demand and overall economic growth. This suggests that immigration policies have far-reaching economic consequences that extend beyond the immediate scope of enforcement actions.
East's ongoing research into the consumer and taxpayer contributions of undocumented immigrants aims to provide a more comprehensive understanding of their economic role. The initial findings from her study with Cox highlight the complex and often underestimated economic contributions of immigrant labor, suggesting that policies impacting immigration have significant and wide-ranging effects on the overall economy.
