The Effects of Immigration Enforcement on Small Businesses

This paper examines the effects of US immigration policies on small businesses at a local level. More specifically, it seeks to understand how economic activity in communities around the United States is affected by immigration policy and what social mechanisms contribute to this. Since the institution of the Department of Homeland Security (DHS) and its branch of Immigration and Customs Enforcement (ICE), there have been many drastic policy measures that have determined the status and state-sanctioned treatment of migrants in the country. This paper examines how increased dentation and removal rates of undocumented immigrants affect the small businesses of an area. Prior research has shown that labor markets experience negative effects when immigration enforcement increases in intensity due to policy changes like the Secure Communities (SC) and 287(g) programs. This work builds upon and contributes to the larger discussion on the consequences of more stringent immigration enforcement. Original research conducted in this paper demonstrates that not only are labor markets affected, but small businesses more broadly. This research also demonstrates that not only direct policy changes like SC and 287(g) lead to worsened economic outcomes in communities, but also that removal rates themselves are a driving factor in worsened economic outcomes for small businesses. Approximately, for every 10 additional removals by ICE per 100,000 people within a county, 1.5 small businesses are lost in the county the following year.