Author: Jonathan Guarine
In 2023 and 2024, the United States experienced a large increase in immigration that boosted population, labor force, and employment growth. However, newly released population estimates from the U.S. Census Bureau show slower population growth between July 1, 2024, and July 1, 2025, largely driven by a sharp decline in immigration. If these trends continue, net international migration could decrease to levels not seen in decades.
How have these large swings in immigration affected the North Carolina labor market? Back in 2023, LEAD published an article examining the impact of immigration on North Carolina’s labor market, but those findings predated both the rapid increase in immigration and its subsequent reversal. With more recent data now available, we revisit the topic to assess what has changed and what it means for our state going forward.
North Carolina’s Immigration Trends
As a reminder, North Carolina’s population can grow in three ways:
- Natural Change – more births than deaths;
- Domestic Migration – more people moving to North Carolina from other states than leaving for other states; and
- International Migration – more people moving to North Carolina from other countries than leaving for other countries.1
Figure 1 breaks down how these components of population change have evolved over time. Historically, North Carolina’s population growth has largely come from domestic migration (i.e., people moving in from other states), and that remains true in the latest population estimates for 2025.
However, starting in 2022, North Carolina began experiencing a notable increase in international migration. The peak occurred in 2024, when nearly 83,000 more people moved to the state from other countries than moved abroad. This increase marked a clear departure from the pre-pandemic period, when international migration played a much smaller role in the state’s overall population growth. Even though net international migration fell to 47,000 people between July 1, 2024, and July 1, 2025, it remained elevated relative to earlier periods.
Labor Market Impacts
Beyond contributing to population growth, the influx of immigrants has also expanded North Carolina’s labor force. Foreign-born labor force participation hit a low of 68% in 2021 before rising in each subsequent year. By 2025, it reached 72%, meaning nearly three out of every four working-age (16+) immigrants were either employed or actively looking for work2 [Figure 2].
Furthermore, foreign-born labor force participation continues to outpace native-born participation by a substantial margin. In 2025, native-born participation averaged 59%, resulting in a 13-percentage-point gap consistent with what we’ve seen over the last two decades. Our previous research suggests this persistent gap is largely due to differences in age composition: immigrants are more likely to be in their prime working years (ages 25-54) than those born in the U.S.
Employment estimates derived from the Current Population Survey (CPS) suggest that immigration accounted for most of North Carolina’s net employment growth in recent years [Figure 3]. From 2021 to 2025, the number of foreign-born workers in the state increased by 188,000, compared with a gain of around 180,000 native-born workers. Immigration’s contribution was especially pronounced in 2023, when all of the state’s net employment growth came from foreign-born workers. This boost in immigrant employment came during a period when many employers reported difficulty filling positions, partly due to retirements and demographic trends.
Immigrants continue to make up a sizable share of employment in several sectors, spanning both goods-producing and service-providing industries. The Construction sector leads the list, with foreign-born workers accounting for 37% of total employment [Figure 4]. Foreign-born workers comprise at least 29% of total employment in Agriculture—a likely underestimate because H-2A visa workers are not included in the underlying CPS data. And in the Leisure and Hospitality sector, which includes accommodation and food service establishments, roughly one in five workers is foreign-born.
What Lies Ahead Given the Immigration Slowdown in 2025?
Future labor market conditions will depend on many factors, including immigration trends, population aging, and broader economic forces. Immigration was a significant contributor to workforce growth in recent years, particularly during the 2023-2024 period, but whether that pattern continues given the 2025 slowdown remains to be seen. Several factors make it difficult to draw any firm conclusions at this stage.
First, it is important to remember that changes on the supply side of the labor market (i.e., more or fewer people available to work) occur alongside changes on the demand side (i.e., employers needing more or fewer workers). Even if job growth in our state slows significantly or turns negative, it is not clear that declining immigration would be the main culprit. We are entering the fifth consecutive year of a labor market slowdown, with hiring rates falling to their lowest point in over a decade and jobseekers facing difficult job-finding conditions.
Second, the effects of immigration on the labor market can take time to show up. In a typical year, many newly arrived immigrants do not enter the labor force immediately due to waiting periods for work authorization and other factors. As a result, immigrants who arrived in 2022, 2023, and 2024 are still gradually ramping up their labor force participation in 2025 and beyond.3 This means the rapid increase in immigration from a few years ago may continue to boost labor supply for some time, even as new inflows slow.
Third, even if we don’t see an immediate impact on the labor market this year, a prolonged slowdown in immigration would carry long-term consequences. The U.S. population is aging, and birthrates have been in decline for decades. Demographic projections suggest that beginning in 2030, annual deaths may exceed annual births nationwide, meaning net immigration would become the primary source of population growth. Under such scenarios, slower immigration would affect long-term workforce and economic growth.
Whatever lies ahead, LEAD will continue tracking how these national swings in immigration and other demographic forces are shaping North Carolina's labor market.
To read LEAD’s last analysis on immigration from 2023, click here.
- 1
International migration includes American citizens returning from overseas, such as military servicemembers relocating to North Carolina.
- 2
Some economists have argued that Current Population Survey (CPS) estimates of the foreign-born population should be viewed with caution in 2025 due to declining survey response rates among immigrants. [Link: Read more here]. Additionally, due to the federal government shutdown, CPS data are unavailable for October 2025. To calculate labor force statistics for this study, we averaged the year-over-year percentage changes from September 2024 – September 2025 and November 2024 – November 2025, then applied this change to the October 2024 level to obtain the October 2025 estimates for population, labor force, and employment.
- 3
Economists analyzing national-level data on immigrant labor force participation have noted how more recent immigrant cohorts appear to have higher initial labor force participation rates, causing the boost to the labor force to occur more quickly. Additionally, an increase in work permit applications took place between January and April 2025, suggesting a surge in interest in labor force participation among recent immigrants. [Link: To read more].