Economic theories of attitudes towards immigration are heavily contested. While labour market competition was once dominant in trying to make sense of raising levels of public anti-immigrant sentiment, cultural anxieties are now considered the main, if not the sole driver of inter-group hostility. Traditional labour market theories, however, rest on questionable assumptions, such as wage maximization being the key determinant of attitudes and native workers being fully aware of migrant inflows at their skill levels. We challenge these assumptions, proposing instead that labour demand, not supply, plays a critical role in shaping economic perceptions of immigration. To test this, we compile a novel, granular dataset linking vacancy rates and labour market tightness to individual attitudes. Our data spans 1999–2024, integrating monthly-year trends from Germany’s Household Panel (GSOEP) with regional (NUTS 1) and occupational (ISCO-3d) dynamics. Preliminary analyses using longitudinal models reveal that higher vacancy rates strongly predict lower anti-immigrant sentiment, independent of static confounders like cosmopolitan self-selection into migrant-friendly regions or occupations. Mechanistically, we find that lower egocentric fears of competition and perceived job insecurity under tight labour markets drive these attitudes. This study contributes to the literature by emphasizing economic over cultural factors and self-interest over sociotropic frameworks. Future work will enhance causal robustness through quasi-random variations in sectoral and regional policy changes, such as post-Covid relaxation of employment restrictions. By shifting focus to labour demand and scarcity, we provide a fresh perspective on the economic underpinnings of inter-group hostility.