The Labor Market Effects of Venezuelan Migration in Ecuador

Review

Over 470,000 Venezuelan migrants and displaced abroad have settled in Ecuador, over half choosing to live in four (out of 221) regions (cantons). This paper analyzes the determinants of the location choices of Venezuelan migrants in Ecuador and how they might affect host labor markets. The authors employ a difference-in-difference methodology and exploit data from Ecuador’s household labor force survey and novel data from mobile phone records to measure the geographic distribution of Venezuelan migrants.

Key findings:

  • Venezuelans’ location choices have been fundamentally driven by the size of regional economies, measured by the wage bill at the canton level. The point of entry
    into Ecuador has very little explanatory power.
  •  Overall, regions with the largest inflows of Venezuelans have not seen any effects on labor market participation or employment, compared to regions with fewer
    inflows, even when restricting the analysis to female workers.
  •  Young, low-educated Ecuadorian workers in high-inflow regions have been adversely affected in terms of quality of employment and earnings. Compared to similar workers in regions with a small inflow of Venezuelans (relative to population), young, low-educated Ecuadorian workers in high-migration regions have experienced a 6 percentage-point drop in the rate of adequate employment, a 5-percentage point increase in the rate of informality, and a 13 percent reduction in hourly earnings.

The authors conclude that newly arrived Venezuelan migrants have found employment mainly in informal jobs, placing the burden of the adjustment disproportionately on the more vulnerable workers in the main host regions. These effects are highly localized in a few regions, suggesting the use of targeted interventions to alleviate the economic burden for vulnerable groups of workers in those regions.

Pin It on Pinterest