Association for Public Policy Analysis & Management

We explore how immigrant legal status affects safety net transfers using variation from the Immigration Reform and Control Act of 1986 (IRCA), which authorized the largest U.S. amnesty to date. Exploiting the timing and geographic unevenness in intensity of IRCA’s legalization programs, we estimate a sizable effect of permanent residency on Earned Income Tax Credit (EITC) transfers. By contrast, we find null but imprecise effects of legal status on food stamp transfers. Fiscal costs are partially offset by increased state income tax revenues due to increased rates of income tax filing. These findings suggest that previous studies have understated the relationship between legal status and total family resources, particularly for families with children, and that legalization redistributes resources toward areas more affected by immigration. This paper fits the measurement theme of conference since the goal of the paper is to get around the fact that there is so little follow-up data on those legalized under IRCA. Our approach to this problem is to use a geographically aggregated research design, which can nevertheless deliver the individual-level impact of IRCA under certain assumptions which we outline.