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

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  • Carlo Lombardo
  • Julián Martinez-Correa
  • Leonardo Peñaloza-Pacheco
  • Leonardo Gasparini

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.

Suggested Citation

  • Carlo Lombardo & Julián Martinez-Correa & Leonardo Peñaloza-Pacheco & Leonardo Gasparini, 2022. "The distributional effect of a migratory exodus in a developing country: the role of downgrading and regularization," Asociación Argentina de Economía Política: Working Papers 4573, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4573
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    More about this item

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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