Estimating the Effect of Immigration on Public Finances: Evidence from the Influx of Venezuelan Migrants to Colombia

Carlos A. Mesa-Guerra, Tomás Ramírez-Tobón
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Abstract

We investigate the fiscal impact of immigration on the Colombian economy from 2013 to 2018 using an accounting approach and exploiting the large and sudden increase in inflows from Venezuela. In other words, we estimated the difference between the taxes and other contributions migrants make to public finances and the costs of the public benefits and services they receive. Our findings show that immigrants tend to have less access to, and make lower use of, the welfare system, and do not suggest strong evidence of immigrants imposing a higher burden to public finances relative to natives. When we consider only Venezuelan immigrants, consisting of both the Venezuelan-born population and those native-born returnees arriving from Venezuela, our estimates indicate that while they have a less favorable net fiscal position relative to natives, which is driven by the net contributions to regional and local government budgets, their overall fiscal effect is fairly modest in terms of GDP. When we considered the effect that demographic characteristics play on explaining the differences in the net fiscal contributions among groups, our results suggest that the higher fiscal impact of Venezuelan-born immigrants is driven by recent arrivals, as they contribute on average less in terms of income taxes and social security contributions and have a higher reliance for group expenditures. In contrast, immigrants that have been in the country for more than a year have—if any—a better per capita fiscal position than natives. Finally, since migration is not distributed uniformly across space, the fiscal effects at the local level are not homogeneous. We show that the fiscal effects on local budgets are mediated by two forces: cities’ fiscal effort (the ability to raise revenues from their own sources) and the share of immigrants in the local population.
估计移民对公共财政的影响:来自委内瑞拉移民涌入哥伦比亚的证据
我们利用委内瑞拉移民流入的大量突然增加,利用会计方法调查了2013年至2018年移民对哥伦比亚经济的财政影响。换句话说,我们估计了移民对公共财政的税收和其他贡献与他们获得的公共福利和服务的成本之间的差异。我们的研究结果表明,移民往往较少获得福利制度,也较少使用福利制度,并且没有强有力的证据表明移民对公共财政造成了比本地人更高的负担。当我们只考虑委内瑞拉移民时,包括委内瑞拉出生的人口和从委内瑞拉返回的本土出生的人,我们的估计表明,尽管他们的净财政状况相对于本地人不那么有利,这是由对地区和地方政府预算的净贡献驱动的,但就GDP而言,他们的整体财政影响相当温和。当我们考虑人口特征对解释群体之间净财政贡献差异的影响时,我们的结果表明,委内瑞拉出生的移民的较高财政影响是由新来者驱动的,因为他们在所得税和社会保障贡献方面平均贡献较少,并且对群体支出有更高的依赖。相比之下,在这个国家呆了一年以上的移民,如果有的话,人均财政状况比本地人要好。最后,由于移民在空间上的分布并不均匀,地方层面的财政影响也不均匀。我们表明,财政对地方预算的影响是由两种力量调解的:城市的财政努力(从自己的来源筹集收入的能力)和移民在当地人口中的份额。
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