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Immigration Enforcement Visibility and Consumer Spending

Author

Listed:
  • Uma De Balanzo
  • Nuria Rodriguez-Planas
  • Jennifer Roff
  • Núria Rodríguez-Planas

Abstract

We exploit the sharp escalation in community-based ICE enforcement following the January 2025 inauguration to estimate the causal effect of immigration enforcement on consumer spending. Using Synthetic Difference-in-Differences with cross-state variation in surge intensity as the identifying variation, we find that states experiencing the largest enforcement surges saw aggregate card spending decline by 1.7 percentage points relative to their SDiD counterfactual, an effect robust to covariate adjustment, alternative shock windows, and pre-tariff truncation. Null estimates for non-in-person spending rule out a broad regional demand shock, while null estimates for jail-based arrests (enforcement invisible to surrounding communities) isolate enforcement visibility as the operative mechanism. Sector-level estimates reveal two empirically distinct channels: in states with Democratic governors, aggregate spending fell by −4.1 pp (p

Suggested Citation

  • Uma De Balanzo & Nuria Rodriguez-Planas & Jennifer Roff & Núria Rodríguez-Planas, 2026. "Immigration Enforcement Visibility and Consumer Spending," CESifo Working Paper Series 12662, CESifo.
    • Handle: RePEc:ces:ceswps:_12662
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12662.pdf
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    More about this item

    Keywords

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    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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