Legal Status, Local Spending and Political Empowerment: The Distributional Consequences of the 1986 IRCA

We study the impact of immigrant legalization on the distribution of public resources, exploiting variation in legal status from the 1986 Immigration Reform and Control Act (IRCA) which legalized 2.8 million mostly Hispanic migrants. Governors, we find, allocate more per capita resources to IRCA-affected counties, an allocation that is responsive to their electoral incentives, targeted toward educational expenditure and that ultimately increases Hispanic high school completion rates. Importantly, our baseline effect arises prior to 1992, the first year IRCA migrants gained eligibility to vote. This allows us to decouple immigrant legalization from enfranchisement in the interpretation of our results. We argue that legal status attracts differentially more resources from the state owing to its capacity to politically empower already legal Hispanic citizens in communities of mixed legal status. Consistent with this mechanism, IRCA counties experience significant increases in voter turnout and in the number of Hispanics winning public office.