This paper examines the impact of Venezuelan migration on the labor market outcomes of migrants and non-migrants in Colombia. Between 2014 and 2018, Colombia received approximately 1.2 million migrants from Venezuela, accounting for approximately 3.2 percent of the working-age population. A quarter of those immigrants were Colombian citizens who returned to the country due to the Venezuelan crisis. International migrants (not Colombian born) share a common history with Colombia and speak the same language.
The authors employ an instrumental variable approach that exploits the regional variation in migrant networks and the timing and intensity of the Venezuela economic crisis. The analysis draws on data from the Colombian Household Survey (GEIH), which provides a monthly measure of migration accounting for documented and undocumented immigrants, as well as returned migrants. The sample is restricted to working-age individuals (over age 12 in urban areas) living in the 23 largest metropolitan areas.
Main findings:
- Migration from Venezuela did not affect natives’ probability of unemployment. Venezuelan arrivals had no effect on the unemployment of natives, due to a reduction in labor force participation that offset the negative impact on employment.
- Migration increased unemployment among migrants, in particular international migrants. A one percentage point increase in the share of migrants increased their own probability of unemployment by 1.2 percentage points and increased the probability of unemployment among international migrants by 2 percentage points. The impact on unemployment among returned migrants was minimal. Migration negatively affected both labor participation and employment of international migrants, with small effects for returned migrants.
- Employment losses were concentrated among self-employed workers. Migration’s negative effect on employment was entirely driven by self-employed workers, with larger effects for migrants (−1.6 percentage points) than natives (−0.4 percentage points).
- Migration negatively affected wages, driven by reduced labor income in the self-employed segment. Migration reduced self-employment wages, suggesting that smaller employment probabilities and lower expected wages explain the decline in labor participation.
- Females, youth, and low-skilled workers are more vulnerable to the labor market impact of migration. For women, reductions in the participation rate did not offset employment losses, whereas males were more likely to opt out of the labor market. In the full and native samples, migration exclusively affected young adults. Low-skilled individuals drove the impact of migration on participation and employment in the full and native samples.
- Internal migrants (IDPs) were particularly affected by Venezuelan inflows, with negative effects on employment, which translate into higher unemployment rates. Additionally, cities with more international migrants tended to receive fewer internal migrants, reducing pressure on local labor markets. A one percentage point increase in the share of migrants reduced the number of in-migrations by approximately 8.1 percent.
The authors conclude that even in contexts where migrants are culturally close to the host country, labor market assimilation remains a challenge for international migrants. They note that most international migrants face restrictions to regularize their status or validate their educational credentials, creating impediments to formal labor market integration. The authors argue that policies that facilitate the integration of migrants into the labor force can attenuate the negative effects of migration on this particularly vulnerable group. Such policies may include validation of foreign degrees, public employment services, training, access to credit, information campaigns on migration policies, social assistance, and policies promoting positive attitudes toward migrants.