The distributional effect of a migratory exodus in a developing country: the role of downgrading and regularization

Carlo Lombardo, Julián Martinez-Correa, Leonardo Peñaloza-Pacheco and Leonardo Gasparini

No 4573, Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política

Abstract: We study the distributional effect of the massive exodus of Venezuelans in Colombia and how public policy can shape its impact. Using RIF-regressions in an instrumental variables approach, we find that the exodus had a larger negative effect on the lower tail of the natives’ wage distribution, increasing inequality in the host economy. We propose downgrading as the driving mechanism: due to formal restrictions, immigrants ended up working in more routine and lower-paying jobs than natives with similar characteristics. Finally, we show that a large-scale amnesty program reduced the magnitude of downgrading, mitigating the unequalizing impact of the exodus.

JEL-codes: D30 F22 J61 O15 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2022-11
New Economics Papers: this item is included in nep-dev, nep-int, nep-lam, nep-ltv, nep-mig and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:aep:anales:4573

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