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‘When a Stranger Shall Sojourn with Thee’: The Impact of the Venezuelan Exodus on Colombian Labor Markets

Abstract

This paper analyzes the effect of open-door immigration policies on local labor markets. Using the sharp and unprecedented surge of Venezuelan refugees into Colombia, I study the impact on wages and employment in a context where work permits were granted at scale. To identify which labor markets immigrants are entering, I overcome limitations in official records and generate novel evidence of refugee settlement patterns by tracking the geographical distribution of Internet search terms that Venezuelans but not Colombians use. While official records suggest migrants are concentrated in a few cities, the Internet search index shows migrants are located across the country. Using this index, high-frequency labor market data, and a difference-in-differences design, I find precise null effects on employment and wages in the formal and informal sectors. A machine learning approach that compares counterfactual cities with locations most impacted by immigration yields similar results. All in all, the results suggest that open-door policies do not harm labor markets in the host community.

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