As of December 2018, Colombia hosted more than one million forced migrants who had fled the escalating economic, political and humanitarian crisis in Venezuela. Colombia has embarked on a process of regularizing more than 442,000 eligible Venezuelan migrants—undocumented migrants who voluntarily registered with the Registro Administrativo de Migrantes Venezolanos (RAMV)—providing them with a Permiso Especial de Permanencia (Special Stay Permit; PEP) that allows them to stay and work in Colombia. This policy brief describes the main characteristics of the population of Venezuelan migrants undergoing the regularization process and the potential impacts on the Colombian economy.
- The population of newly regularized migrants is predominately young, moderately educated, and ready to engage in the labor force. Over 75 percent are of working age, and 83 percent of those have completed at least secondary education. Compared to the Colombian labor force, the newly regularized migrants are younger and more educated. If well integrated into the labor force, they could contribute to economic growth and productivity.
- Newly regularized Venezuelan migrants are highly concentrated around the border, with eight municipalities (out of 1,122 municipalities) hosting over 31 percent of all Venezuelan migrants. Puerto Santander (Norte de Santander), Villa del Rosario (Norte de Santander), and Maicao (La Guajira) have the largest per capita concentration of Venezuelan migrants: 23.6 percent, 17.5 percent and 16.6 percent, respectively. However, in the vast majority of municipalities, newly regularized migrants make up less than one percent of the municipal population. Large metropolitan centers have low per capita concentrations of Venezuelan migrants (Bogota, 0.53 percent; Medellin, 0.46 percent; Cali, 0.43 percent; Barranquilla, 1.74 percent and Cartagena, 1.34 percent).
- The impact of regularized Venezuelan migrants on the labor market depends on whether their labor is a substitute for or complement to native workers. If migrants are complements to native workers, then wages of natives would increase; if migrants are substitutes for native workers, their entry into the labor market would put downward pressure on wages. The authors surmise that regularized Venezuelan migrants are more likely to be complements to native workers given differences in their demographic profile and educational attainment, but acknowledge the potential for negative labor market outcomes, especially in areas with high concentrations of migrants. The authors note that in countries like Colombia where the informal sector is already large, granting formal labor market access may have less of an impact on labor market outcomes for natives.
- Economic integration is potentially beneficial for host countries as well as migrants. When migrants join the formal labor force, they increase their incomes and reduce their reliance on social assistance. They can also attain greater bargaining power in the workplace, which they can use to push for better salaries and safer working environments, with positive spillover effects in the informal labor market. Host countries benefit from the expansion in the tax base, as well as the injection of new skills and ideas into the economy, which can lead to economic innovation and the creation of new businesses and jobs.
- Colombia can enhance the impact of regularization of migrants by investing in complementary policies to mitigate the negative effects of migrant integration and promote positive labor force outcomes. The authors recommend measures to avoid job displacement of those Colombians whose skills could be substitutes for migrant labor, for example by injecting capital into highly impacted regions. In addition, the authors recommend a policy of voluntary, incentivized relocation of Venezuelan migrants within Colombia to both ease pressure on infrastructure in the border regions and give migrants access to more dynamic sub-national economies. Such a relocation scheme would need to take into account factors such as regional unemployment rates, relative sizes of informal labor markets, and the business climate.