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Abstract
This study examines the impact of county-level immigration enforcement of section 287(g) mandates on the number of small businesses in the US. Using the difference-in-differences model, we find that the implementation of 287(g) negatively affected the total number of small businesses. Specifically, small businesses saw a decrease of 1.21 businesses per 1000 county population which is about a 5 percent decrease in the counties where the 287(g) law was implemented, compared to the counties where the law was not implemented. This decrease appeared to be more prominent in businesses with a higher number of employees. Our results are supported by the event study plot, which bolsters the parallel trend assumption and indicates a significant decrease in the number of businesses after the implementation of county-level 287(g) mandates. Our findings shed light on the complex impacts of immigration policies on small businesses, especially those reliant on immigrant labor. This has significant implications for policymakers and government officials involved in immigration and labor market regulations.