The United States is confronting a labor force participation rate of 61.5 percent as of the latest report, marking the lowest level since March 2021 and the lowest outside of pandemic years since 1976. This decline is unevenly impacting states, particularly those with rural economies, where employers have long struggled to attract and retain workers. North Dakota and South Dakota currently report the nation’s lowest unemployment rates, but these low figures mask a critical shortage of available workers. Data from the Bureau of Labor Statistics through December 2025 indicate that both states had approximately two job openings for every unemployed person, underscoring a tight labor market driven by workforce shortages rather than a lack of demand.

A new analysis by the Challey Institute for Global Innovation and Growth at North Dakota State University suggests immigration could offer a significant economic boost to these and other similarly affected states. Reviewing economic and demographic data from all U.S. states between 2008 and 2023, the study estimates that a 1 percent increase in state population due to immigration correlates with an average 1.5 percent rise in private-sector GDP. The economic benefits vary by location, with rural and smaller states experiencing the largest gains. Montana and Mississippi, for instance, see estimated GDP increases of around 4.0 percent, while South Dakota and West Virginia register gains of 3.1 percent and 3.0 percent respectively. In contrast, traditionally immigrant-dense states such as California, Texas, New York, and Florida reflect more modest increases ranging from 0.57 to 1.1 percent.

The political environment adds complexity to the debate over immigration, particularly in states that could benefit most. Notably, 20 of the 25 states identified as having the highest potential economic gains from immigration voted for Donald Trump in the 2024 presidential election. Experts emphasize that supporting legal immigration need not conflict with enforcing border security or other policy priorities and caution against viewing immigration as a solution to all economic or social challenges.

Immigrants contribute more than labor; they are also entrepreneurs, homeowners, taxpayers, and consumers who expand local markets. They represent roughly 25 percent of new business founders nationally, a particularly significant statistic for small communities where population shifts can markedly influence economic vitality. Demographic trends heighten the urgency of immigration policy adjustments. The Census Bureau reports that net international migration, which peaked near 2.7 million in 2024, dropped sharply in 2025 and may fall to around 321,000 in 2026. Meanwhile, projections by the Congressional Budget Office indicate a declining ratio of working-age Americans to those aged 65 and older, forecasting a decrease from 2.7 today to 2.2 by 2056. Without increased legal immigration, the population is expected to begin shrinking by 2030.

Rural states face persistent challenges beyond immigration, including an aging populace and outmigration of younger residents. Employers may raise wages, but scarcity of workers overcomes financial incentives. The study further finds that economic gains from immigration are larger in states with greater economic freedom, suggesting that policies facilitating market openness enhance the benefits of population growth for both native and immigrant workers.

While immigration is not a panacea, experts warn that without legal pathways aligned to labor market needs, many rural states aiming for growth risk accelerating population decline. The analysis underscores the need to reconcile economic realities with immigration policies to support the prosperity and sustainability of these regions.