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Immigration and Occupational Downgrading in Colombia

2022; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.4302536

1556-5068

Jeremy Lebow,

International Labor and Employment Law

Between 2015-2019, approximately 1.8 million Venezuelans fled an economic and political crisis into neighboring Colombia. Despite being well-educated on average, these migrants disproportionately entered occupations that tend to employ less educated Colombian natives. I study the effect of this migrant occupational downgrading on native wages using a model of labor demand with imperfect substitutability between migrants and natives. I find that migrant downgrading amplifies the negative wage effect of migration for natives without completed secondary schooling by 30%, and this increases to 80% after allowing for full capital adjustment in the long-term. At the same time, migrant downgrading has little consequence for the wages of more educated natives, who benefit from reduced competition but are harmed by reductions in aggregate productivity. The results highlight the benefits of policies to reduce migrant downgrading for wage equality and productivity, especially in the developing country setting.