Refugee Inflow and Labor Market Outcomes in Brazil: Evidence from the Venezuelan Exodus

Abstract

The impact of a large influx of refugees (or migrants) on the local labor market has long been an important topic among economists. In this study, we investigate the economic impact of the Venezuelan migrant inflow on labor market outcomes in Brazil. We employ the synthetic control method to exploit the concentration of a large inflow of Venezuelans in the Brazilian state of Roraima, which shares a land border with Venezuela. Results indicate that the inflow of Venezuelan refugees lowered labor force participation and employment rate but did not have a significant impact on hourly wages in Brazil. Our estimates show that labor force participation among less educated individuals decreased by a larger magnitude, while females lost jobs in informal and self-employed sectors. These findings contribute to a better understanding of the short-term economic consequences of hosting refugees in developing countries.

The Labor Market Impacts of Venezuelan Refugees and Migrants in Brazil

“…Table A4 reveals the results of the fuzzy RD and all the results are consistent with the sharp RD results. The additional results that shows up is that female Brazilian employment falls in Roraima, which is consistent with the finding of Ryu and Paudel (2021), who find that overall female workers are negativly impacted by the influx of Venezuelans.…”

The impact of Afghan Refugee Influx on Labor Market Outcomes in Pakistan

“…Labor market variables exhibit a decline after the refugee inflow. However, uneducated and less skilled native people seem to bear more burden as compared with educated ones (Ryu & Paudel, 2021).…”

Ethical tensions of migrants in the informal economy in the Global South

“…Studies show that migrants working in the informal economy have had positive impact in the form of higher production levels for firms and increased entrepreneurial activity (Altındağ et al., 2020), but they also replaced native workers in the informal labour markets and reduced wages of those in the informal sector (Ryu & Paudel, 2022). As a result, business owners prefer to hire migrants informally, instead of native informal workers, as they have a lower cost of labour and stronger attachment to low‐paid jobs (Muñoz‐Mora et al., 2022).…”