Latin American Brotherhood? Immigration and Preferences for Redistribution


This paper examines the effect of immigration on social preferences for redistribution in Latin America, including the specific effect of large-scale Venezuelan displacement to Colombia. Most immigration in Latin American countries is intra-regional (70 percent in the 2010s), with migrants coming from countries with similar cultural backgrounds, including language and religion. 

The analysis is based on data from several sources including: (1) provincial-level public opinion data from the Latin American Public Opinion Project (LAPOP) survey 2008–2018; (2) socioeconomic data and share of immigrants at the provincial level from harmonized census data (IPUMS International) covering 12 countries and the Socio-Economic Database for Latin America and the Caribbean (SEDLAC) covering 11 countries; and (3) immigration data for Colombia from the Great Integrated Household Survey (GEIH). 

The authors exploit the variation in the share of immigrants within and across countries to analyze the relationship between immigration and support for redistribution. To estimate the effect of Venezuelan displacement on preferences for redistribution in Colombia, the authors employ an instrumental variables approach, using the distance between Venezuelan and Colombian departments as the instrumental variable. 

Main results: 

  • Immigration has a significant negative effect on support for redistribution. A one standard deviation increase in the share of immigrants leads to an estimated negative effect of 9 percent of a standard deviation on preferences for redistribution. The anti-redistribution effect of immigration is larger for high-income and high-skilled individuals and in receiving countries with higher public spending and with a higher share of natives with unfavorable attitudes towards immigrants. The negative effect is driven by immigrants coming from other Latin American countries. Moreover, the lower the relative skill of immigrants compared to that of natives, the stronger the effect. 
  • Immigration from Venezuela significantly reduces support for strong redistribution policies in Colombia. An increase of one standard deviation in the share of Venezuelan immigrants in Colombia reduces preferences for redistributive policies by approximately 34 percent of a standard deviation. 

The authors conclude that that immigration reduces the demand for redistribution in Latin America, even when most immigrants come from neighboring countries and share a similar culture with their hosts. The authors suggest two potential mechanisms that could drive these results. First, the fiscal leakage effect, that is concern about a diversion of public revenues from native taxpayers to foreign welfare recipients. And second, the loyalty effect, that is natives’ animosity to immigrants despite similar cultural backgrounds.