Labor Market Effects of the Venezuelan Refugee Crisis in Brazil

TL;DR

This study examines how the Venezuelan refugee crisis impacted Brazil's border labor market, revealing wage increases for locals, minimal job displacement, and shifts in occupational roles, using detailed administrative data and difference-in-differences analysis.

Contribution

It provides new empirical evidence on the labor market effects of Venezuelan refugees in Brazil, highlighting wage dynamics and occupational shifts in Roraima.

Findings

Brazilian wages increased by about 2% in Roraima.

Minimal displacement of local workers was observed.

Immigrants in informal markets offset formal market effects.

Abstract

We use administrative panel data on the universe of Brazilian formal workers to investigate the labor market effects of the Venezuelan crisis in Brazil, focusing on the border state of Roraima. The results using difference-in-differences show that the monthly wages of Brazilians in Roraima increased by around 2 percent, which was mostly driven by those working in sectors and occupations with no refugee involvement. The study finds negligible job displacement for Brazilians but finds evidence of native workers moving to occupations without immigrants. We also find that immigrants in the informal market offset the substitution effects in the formal market.