Legal Status and Local Spending: the Distributional Consequences of the 1986 Irca
Abstract: We examine the impact of immigrant legalization on the distribution of state and local spending by exploiting variation in legal status arising from the 1986 Immigration Reform and Control Act (IRCA), which legalized three million Hispanic migrants. We find that governors, irrespective of party, allocate more per capita to IRCA-affected counties. This allocation is sensitive to the governor’s electoral incentives and leads to Hispanic educational improvements, suggesting that it is politically motivated and targeted. Overall, our work underscores the importance of public expenditure as a channel linking legal status to a range of socio-economic benefits documented by the literature.
