Immigration Enforcement Visibility and Consumer Spending

Uma De Balanzo, Nuria Rodriguez-Planas, Jennifer Roff and Núria Rodríguez-Planas

No 12662, CESifo Working Paper Series from CESifo

Abstract: We exploit the sharp escalation in community-based interior immigration enforcement following the January 2025 inauguration to estimate its effect on aggregate consumer spending. Using Synthetic Difference-in-Differences, we compare states experiencing relatively large increases in community-based enforcement with states experiencing smaller increases. States exposed to larger enforcement surges experienced aggregate card spending declines of approximately 1.7 percentage points relative to their synthetic controls, an effect robust to alternative specifications and sample definitions. A parallel treatment constructed from jail-based arrests, a less visible form of enforcement, produces statistically null estimates, while non-in-person spending is similarly unaffected. Together, these contrasts are consistent with enforcement visibility playing an important role in shaping consumer spending responses. Sectoral estimates reveal substantial heterogeneity across political environments: spending declines in Democratic-governed states are concentrated in restaurants and other in-person activities, while declines in Trump-voting states are concentrated in sectors such as home improvement and transportation and warehousing. By focusing on aggregate spending responses rather than the immediate effects of individual enforcement operations, our analysis complements recent studies of localized enforcement events by estimating the cumulative state-level consumer spending consequences of differential exposure to community-based immigration enforcement across sectors and political environments.

Keywords: synthetic difference-in-differences; ICE arrests; sectoral spending (search for similar items in EconPapers)
JEL-codes: E21 J15 R11 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-mac and nep-mig
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