Reagan granted a blanket deferral of deportation for children under 18 who were living with a parent who was legalizing under the Immigration Reform and Control Act of 1986. That law (created by congress, not Reagan) was a compromise law which did the following:
- required employers to attest to their employees' citizenship status;
- made it illegal to hire or recruit illegal aliens knowingly;
- legalized certain seasonal agricultural illegal aliens, and;
- legalized illegal aliens who entered the United States before January 1, 1982 and had resided there continuously with the penalty of a fine, back taxes due, and admission of guilt; candidates were required to prove that they were not guilty of crimes, that they were in the country before January 1, 1982, and that they possessed at least a minimal knowledge about U.S. history, government, and the English language.
The part where illegal aliens were allowed citizenship was a compromise, due to pressure by leftist civil rights groups who were working towards keeping illegal aliens in the country and changing the laws to allow more in. As they do today, they were only working towards the rights of non-white immigrants. The executive action by Reagan was to avoid the obvious bad press that would come from "OMG the evil racists are splitting up FAMILIES" that we've incidentally seen in recent months.