This article examines the effect of Venezuelan migrants on labor market outcomes in the Brazilian state of Roraima. Venezuelan migrants in Brazil are concentrated in Roraima state, which shares a border with Venezuela. As of 2018, 60,000 Venezuelans had relocated to Roraima, where they comprised 10 percent of the population of its capital city, Boa Vista.
The authors employ a synthetic control method (SCM) that exploits the regional variation in the concentration of refugees, comparing labor market outcomes between Roraima and a “synthetic-Roraima”, that is, a weighted combination of the other 25 states in Brazil.
The analysis is based on data from the Pesquisa Nacional por Amostra deDomicílios Contínua (PNAD Continua) survey from the first quarter of 2014 (before the Venezuelan inflow) until the third quarter of 2018 (after the Venezuelan inflow). The survey does not distinguish between refugees and Brazilian citizens, and so the estimates in the paper may reflect a combination of effects for these two groups.
Main results:
- Labor force participation and employment decreased significantly after the Venezuelan inflow. Since 2016, when the Venezuelan migrant crisis started, labor force participation and the employment rate in Roraima decreased by 3.6 percentage points and 2.6 percentage points, respectively. There were not any significant changes in the unemployment rate or wages. The negative impact did not last long—both labor force participation and the employment rate gradually recovered to pre-shock levels.
- The negative impact of the Venezuelan inflow was greater among less educated individuals and females. Labor force participation decreased more for less educated individuals, whereas individuals with a high school degree or above obtained more formal employment after the Venezuelan crisis began. Additionally, the Venezuelan inflow decreased females’ labor force participation and employment in informal and self-employed sectors, while it increased formal employment.
The authors conclude that the inflow of Venezuelan migrants lowered labor force participation and the employment rate but did not have a significant impact on hourly wages in Brazil. Labor force participation among less educated individuals decreased by a larger magnitude, while females lost jobs in informal and self-employed sectors.