From displacement to integration: mitigating the distributional effect of immigration through an amnesty program

Abstract

We examine how the massive exodus of Venezuelans and an amnesty program aimed at their integration affected income distribution in Colombia. Using RIF regressions in an instrumental variables approach, we find that the exodus had a negative effect on the lower tail of native Colombians’ income distribution, while the amnesty program partially mitigated this impact. Our findings posit downgrading as the driving mechanism. Employment restrictions forced Venezuelan migrants into lower-paying, more routinized jobs despite their qualifications, exacerbating pressures on the low-skilled labor segment in Colombia. The regularization program mitigated the extent of downgrading, thereby alleviating the unequalizing impact of migration.