This paper investigates the well-being effects of a regularization program in Colombia designed to facilitate the social and economic integration of Venezuelan forced migrants. There are over 2.5 million Venezuelan migrants in Colombia. Through the Permiso Especial de Permanencia (PEP), the Colombian government regularized the status of 281,307 of these migrants. PEP provides beneficiaries with regular migratory status, work permits, access to private services, and inclusion in the social protection system (Sisbén). The Sisbén social registry is a proxy means-testing system used to target social programs and grants access to subsidized healthcare, early childhood services, and cash transfers. Venezuelan migrants without regularized status have access only to education and emergency health services, and they cannot work in the formal sector.
The analysis exploits the unexpected introduction of the PEP program, with ex-post eligibility determined solely by prior registration in a nationwide census of irregular Venezuelan forced migrants, the Registro Administrativo de Migrantes Venezolanos (RAMV). The analysis is based on a phone survey of 2,232 Venezuelan forced migrant households that arrived in Colombia between January 2017 and December 2018. The survey took place between October 2020 and February 2021, two years after the introduction of PEP. The sample is representative of Colombian cities with the highest concentrations of Venezuelan forced migrants, including Barranquilla, Bogotá, Medellín, and a fourth “region” comprising smaller cities.
The authors compared the wellbeing of migrants who arrived before and after the PEP eligibility date, focusing on various dimensions of socioeconomic well-being (such as consumption, income, and a health status index), access to services (including registration in Sisbén, access to subsidized healthcare, financial products, and government transfers), and labor market outcomes (such as employment status, holding a formal job, quality of employment, and having salaried employment). Additionally, the authors conducted a short-term fiscal cost-benefit analysis of the PEP program.
Main findings:
- Forced migrants who participated in the PEP program experienced significant improvements in socioeconomic well-being, including higher consumption, labor income, and better health status. PEP had a substantial positive impact on socioeconomic well-being, with a 1.65 standard deviation increase in the summary index. Specifically, PEP led to a 48 percent increase in per capita consumption, a 22 percent increase in labor income, and a 1.2 standard deviation improvement in the health status summary index for PEP migrants compared to non-PEP migrants.
- The positive outcomes were largely driven by improved access to services, particularly the social protection system, subsidized healthcare, and financial services. There was a significant positive effect of 38 percentage points (pp) on the services summary index, attributed to PEP’s impacts on access to the Sisbén proxy means-testing system (57 pp), subsidized healthcare (27 pp), financial services (44 pp), and government transfers (22 pp).
- Despite these improvements, the results indicate supply and demand constraints that prevent eligible migrants from fully accessing the services permitted by PEP. At the time of the survey, 50 percent of PEP beneficiaries did not have access to Sisbén, 67 percent lacked access to subsidized healthcare, and 76 percent were unable to access the financial system. Additionally, only 14 percent of these migrants were receiving government transfers.
- The fiscal costs of hosting a regularized forced migrant household are lower than those of an irregular one. Non-PEP households have a net annual cost of US$1,056, while the average PEP household has a net cost of US$610, representing a 42 percent reduction in the net annual fiscal costs of hosting a Venezuelan forced migrant. This reduction is due to increased tax revenues from improvements in consumption and income, as well as lower costs of providing full health services to regularized migrants compared to emergency health services available to everyone.
The authors conclude that regularization programs are highly effective in improving the welfare of undocumented migrants in developing countries. Although most regularized migrants remained in the informal sector in the short term, the PEP program led to lower fiscal costs and improved the public budget. This was primarily achieved through increased consumption, which boosted VAT collection, and reduced healthcare costs. These positive effects are likely to compound in the medium to long term as migrants further integrate into the economy and society.