Immigration, Wages, and Employment under Informal Labor Markets

Lukas Delgado-Prieto

Working papers from Red Investigadores de Economía

Abstract: This paper studies the labor market impacts of Venezuelan immigrants in Colombia. Exploiting spatial variation in exposure, I nd a negative e ect on native wages driven by the informal sector (where immigrants are concentrated) and a reduction in native employment in the formal sector (where the minimum wage binds for many workers). To explain this asymmetry, I build a model in which rms substitute formal for informal labor in response to lower informal wages. Consistent with the model's predictions, I document that the increase in informality is driven by small rms that use both labor types in production.

Keywords: Immigration; Event study; Labor market; Informality (search for similar items in EconPapers)
JEL-codes: F22 O15 O17 R23 (search for similar items in EconPapers)
Pages: 62
Date: 2022-08
New Economics Papers: this item is included in nep-dev, nep-int, nep-iue and nep-ure
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Citations: View citations in EconPapers (3)

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