Economic and Fiscal Impacts of Venezuelan Refugees and Migrants in Brazil

As more and more Venezuelans leave their country, fleeing the economic and social crisis, thenumber of Venezuelans in Brazil has risen steadily since 2016, constituting about 18 percent of Brazil's 1.3million refugee and migrant population as of October 2020. Although the economic gains of immigration arewell-documented in the literature, the impacts of forced displacement on the labor market and government budget aremixed and have mainly focused on developed countries. This paper extends the previous literature by exploring theshort-run fiscal impact of Venezuelan refugees and migrants on the public expenditure and revenue of Roraima, the statebordering the República Bolivariana de Venezuela at the north and the main gateway of the Venezuelan refugees andmigrants entering Brazil, and by investigating their impact on its labor market. Using various administrative and surveydata and a regression discontinuity framework, the paper finds that the population shock caused by the influx offorcibly displaced Venezuelans in the short-run did not have any statistically significant effect on the fiscal variablesof Roraima. On the labor market, the paper finds that the population shock translated into an increase in unemploymentamong women and a decrease in employment among women and low skilled workers in the short-run. The effects on earningsare heterogenous across industries, but mainly positive for the high skilled and male workers, suggesting a need forcross-cutting policies that target the most vulnerable host population as well as the forcibly displaced.