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Immigration Enforcement Visibility and Consumer Spending

Author

Listed:
  • De Balanzo, Uma

    (Bocconi University)

  • Rodríguez-Planas, Núria

    (Queens College, CUNY)

  • Roff, Jennifer

    (Queens College, CUNY)

Abstract

We exploit the sharp escalation in community-based ICE enforcement following the January 2025 presidential transition to estimate its causal effect on consumer spending. Using Synthetic DiD with cross-state variation in surge intensity, aggregate card spending fell 1.7 percentage points in high-enforcement states — an effect robust to covariate adjustment, and pre-tariff truncation. Null estimates for jail-based arrests and non-in-person commerce, where enforcement is invisible to surrounding communities, rule out a broad regional demand shock and isolate enforcement visibility as the operative mechanism. Sector-level estimates reveal two empirically distinct channels: in states with Democratic governors, aggregate spending fell 4.1 pp (p

Suggested Citation

  • De Balanzo, Uma & Rodríguez-Planas, Núria & Roff, Jennifer, 2026. "Immigration Enforcement Visibility and Consumer Spending," IZA Discussion Papers 18620, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18620
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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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