Economic Impact of ICE Raids: Wharton Study on Lost Sales

A Wharton study links ICE raids to lost foot traffic and sales nearby, about $811 million in Philadelphia alone, the Inquirer reports. The White House scores enforcement with a different yardstick.

The economic impact of ICE raids reaches well beyond the people arrested, according to a University of Pennsylvania study that links 5,388 immigration enforcement actions to measurable drops in shopping and workplace visits nearby. The Philadelphia Inquirer reported Oct. 26 that the study puts Philadelphia’s loss at about 193 million fewer visits to stores and workplaces and roughly $811 million in sales, part of a national estimate of up to $14 billion in forgone spending during the first year of President Trump’s second term.

The figures arrive as the administration is making its own economic case for enforcement. This month the White House Council of Economic Advisers estimated that each person living in the country illegally imposes a net lifetime public cost of $166,716, and that the roughly 2.5 million departures DHS reported for 2025 will save the federal budget $26.7 billion to $33.7 billion a year from 2028. The two sets of numbers measure different things.

How the Wharton study measured the economic impact of ICE raids

The paper, “ICE-ing the Economy: Immigration Enforcement Under Trump 2.0 and Local Economic Activity,” by Wharton professor Exequiel (Zeke) Hernandez, is a 53-page preprint posted on SSRN in May and revised May 22. It has not been described as peer reviewed, and it pairs geocoded ICE raids with foot-traffic data for 5.4 million commercial locations and card-transaction data for 1.1 million, covering January 2024 through February 2026, according to Wharton’s summary.

Per location, weekly foot traffic fell 2.7 percent and spending fell 6.2 percent. Measured against 2024 across the targeted metro areas, the declines were 2.9 percent and 6.9 percent, the figures the Inquirer used. The national loss is a range, $3 billion to $14 billion, so the $14 billion headline is the top of it. The effects were strongest nearest each raid, did not fade, appeared regardless of neighborhood demographics and did not shift spending online.

The paper separates workers who stop showing up from customers who stay home or spend less. The second channel reaches businesses with no immigration exposure of their own. Hernandez told the Inquirer the enforcement approach “has real consequences.”

Three studies, one direction

Study	Scope and period	Main finding
Wharton (Hernandez), SSRN preprint, May 2026	5,388 ICE raids; January 2024 to February 2026	Weekly foot traffic down 2.7% and spending down 6.2% per location; $3 billion to $14 billion in forgone spending nationally
Brookings Institution (Escobari, Seyal, Beach), Sept. 4, 2026	341 metro areas, 64 arrest “surge” cities; employment data through December 2025	Employment about 0.43% below its expected path six months after a surge, roughly four missing jobs per excess arrest
UC Irvine and University of Illinois Chicago (Lester, Knaap, Wilson)	Los Angeles and Orange counties; eight weeks after the May 14, 2025 operation	Foot traffic in immigrant-dense retail corridors down 8% to 10%, spending down 20% to 25%, more than $625 million in lost retail sales

Sources: SSRN and Knowledge at Wharton; Brookings Institution; UC Irvine School of Social Ecology. Periods as stated by each study.

None is a government statistic. Brookings, a Washington think tank, estimates that about half the missing jobs in its surge cities would have been held by U.S.-born workers. The UC Irvine researchers say card data undercount undocumented and mixed-status households, so their losses are likely understated.

What the White House counts instead

The CEA report, “The Real Cost of Socialism in America,” scores immigration through the federal budget: taxes paid against benefits and public services used over a lifetime. It acknowledges that its $166,716 figure sets aside reverse migration and mortality, and it weighs $148 billion in ten-year enforcement spending against projected savings. The assumptions behind that $166,716 estimate have drawn their own scrutiny.

The Cato Institute, a libertarian think tank, calls the CEA number overstated, arguing that people here illegally are barred from most means-tested programs and that its research finds them net taxpayers. A DHS spokesperson, responding to the Inquirer, disputed the Wharton findings, saying that removing criminals makes communities safer for businesses and customers.

Both frameworks can hold up on their own terms: a budget model can show long-run savings while a local-commerce model shows lost sales where arrests happen. No official estimate yet nets the two. The open question is how much of the local loss is fear among people who are not targets. TRAC data at Syracuse University show that 70.6 percent of the 65,765 people in ICE detention on July 11, 2026, had no criminal conviction.

The $811 million Philadelphia figure comes from the Inquirer’s reporting on the study; the SSRN abstract gives no city breakdown. The next test is worksite enforcement: the Form I-9 audit plan Tom Homan has described would bear on the worker channel more directly than street arrests, as removals continue at the pace the Migration Policy Institute recently tallied.

This article is for general information and is not legal advice.

Sources

Vasanth Vaidyanathan, Esq.

Administrator

Vasanth Vaidyanathan is an immigration attorney with over 20 years of experience focused exclusively on U.S. immigration and nationality law. He holds a LL.M. from California Western School of Law, San Deigo and advises individuals and businesses on employment and family-based immigration matters, including H-1B, PERM, EB categories, and adjustment of status. He has also been a featured speaker at immigration seminars across the U.S. To reach Vasanth visit: https://www.vnathan.com/

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