The Local and the Firm: Divergent Immigration Outcomes in Brazil

Francisco J M Costa and Wagner F Oliveira
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Francisco J M Costa: FGV EPGE Brazilian School of Economics and Finance

No uj7qy_v1, SocArXiv from Center for Open Science

Abstract: How can adverse formal-sector effects of immigration at the regional level coexist with favorable outcomes inside the establishments that hire immigrants? We use matched employer-employee data from Brazil for 2000 to 2017 to estimate regional effects and characterize establishment-level patterns. We instrument regional immigrant exposure with a shift-share design that combines past immigrant settlements with country-of-origin inflows predicted by push factors such as environmental disasters and political instability. Greater exposure reduces the number of establishments hiring formally, lowers native formal wages, and increases native layoffs. Yet establishments employ more native workers and pay slightly higher native earnings after their first immigrant hire. These establishment-level estimates are descriptive because immigrant hiring is endogenous. The contrast shows that outcomes within immigrant-hiring establishments do not capture immigration's full incidence across a local labor market, consistent with adjustment across establishments or between formal and informal employment.

Date: 2026-10-16
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:uj7qy_v1

DOI: 10.31235/osf.io/uj7qy_v1

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