Shoring up economic refugees: Venezuelan migrants in the Ecuadoran labor market

Abstract

Ecuador became the third largest receiver of the 4.3 million Venezuelans who left their country in the last five years, hosting around 10 per cent of them. Little is known about the characteristics of these migrants and their labor market outcomes. This article fills this gap by analyzing a new large survey (EPEC). On average, Venezuelan workers are highly skilled and have high rates of employment, compared with Ecuadorans. However, their employment is of much lower quality, characterized by low wages, and high rates of informality and temporality. Venezuelans have experienced significant occupational downgrading, relative to their employment prior to emigration. As a result, despite their high educational attainment, Venezuelans primarily compete for jobs with the least skilled and more economically vulnerable Ecuadoran workers. Our simulations suggest that measures that allow Venezuelans to obtain employment that matches their skills, such as facilitating the conversion of education credentials, would increase Ecuador’s GDP between 1.6 and 1.9 per cent and alleviate the pressure on disadvantaged native workers. We also show that providing work permits to Venezuelan workers would substantially reduce their rates of informality and increase their average earnings.

Short-run Labor Market Integration of Venezuelan Immigrants to Peru

“… 4 The studies by Shamsuddin et al (2021) and Olivieri et al (2021b) for Brazil and Ecuador, respectively, are the closest to ours within the region. Our work also relates to recent studies, such as Angelini et al (2015), Basilio et al (2017), and Brell et al (2020), on the integration of forced migrants.…”

“…Similarly, most of the studies on the Venezuelan migration in Latin America focus on the effects of immigrants on the economic conditions of natives. For Ecuador, Olivieri et al (2021a) find that natives with lower levels of education have experienced an increase in their unemployment rates, in regions with a high influx of migrants. For Colombia, Caruso, Canon and Mueller (2019) and Lebow (2022) find a negative effect of the labor supply shock on wages in urban areas and for less educated natives.…”

“…Among the few studies directly related to our work are Shamsuddin et al (2021) for Brazil and Olivieri et al (2021b) for Ecuador. Both studies find that Venezuelan newcomers face difficulties integrating into the host countries.…”

“…In the case of Shamsuddin et al (2021), their lack of survey data denies them of crucial information on migrants and prevents them from including the informal labor market in their analysis, a segment that accounts for about 40 percent of the Brazilian labor force. Regarding Olivieri et al (2021b), the small sample used makes it difficult for them to examine any potential heterogeneous effects. 15 Our work estimates specifications similar to those used by Friedberg (2000) and Fortin, Lemieux and Torres (2016), and aims to improve the understanding of the return to foreign human capital, in the context of south–south forced migration.…”

The Effects of the Venezuelan Refugee Crisis on the Brazilian Labor Market

“…For the Syrian refugee crisis, there is little evidence of impacts in neighboring countries' labor markets (Tumen, 2016;Fallah et al, 2019;David et al, 2020). Studies on the Venezuelan exodus showed no significant effects on the labor market in Colombia (Bonilla-Mejía et al, 2020;Santamaria, 2020) and Ecuador (Olivieri et al, 2021). Bahar et al (2021) study the labor market impacts of an extensive migratory amnesty program that granted work permits to nearly half a million undocumented Venezuelan migrants in Colombia in 2018.…”