The fiscal impacts of immigrants and the resultant changes in state redistributive policy

Contrary to the traditional assumption that state policy is immune to changes in population caused by an influx of immigrants, this dissertation demonstrates, utilizing Temporary Assistance to Needy Families (TANF) policy outcomes, that state governments respond to the presence of immigrants in their economy. State government demand is estimated over the life of the TANF program, from 1997--2003 using pooled estimation procedures, allowing for the endogeneity of the key program elements and immigrant population characteristics.; State government design of TANF is found to be sensitive not only to the number of non-citizens in the state, but also to their composition. The presence of immigrants is found to lower the provision of TANF benefits to all potential recipients. Specifically, I find that a 1% increase in a state's percentage of non-citizens decreases the number of recipients per capita by 7.21% and decreases the maximum monthly benefits for a family of three by approximately {dollar}6.41, even in states where immigrants are not eligible for benefits. Political structure is found to be important in state welfare policy design in states where immigrants are ineligible to receive benefits. In states that provide benefits to economically qualified immigrants, the unemployment rate and the amount of the federal funds that states' have saved are important determinants of welfare outcomes. I also find that an increase in the size of the immigrant population leads to a lower likelihood that a state will allow immigrants to be eligible to receive benefits.; Past literature has examined the effect of immigrants on local labor market outcomes and holds the public policy fixed. My results present evidence that there is the potential of a downward bias in the estimate of the impact of immigrants on local labor markets. If the policy is allowed to vary, then it is possible that the net effect of immigration will be positive on local labor market outcomes. There is the possibility that the policy effect of immigrants that is identified on TANF outcomes may be impacting the provision of other publicly provided goods as well. These are potentially important for public policy formation regarding immigration.