Immigration and Occupational Downgrading in Colombia
No TL;DR found
Abstract
Between 2015-2019, an estimated 1.8 million Venezuelans migrated into neighboring Colombia. Despite having similar education as native Colombians, these migrants disproportionately entered occupations with less-educated natives. In this paper, I study the consequences of this migrant occupational downgrading for native labor market outcomes. I estimate a labor demand function that incorporates migrant occupational downgrading and imperfect substitutability between migrants and natives. I find that migrants and natives are more substitutable in low-skill occupations and that substitutability across education groups as low. As a result, the model predicts large consequences of migrant downgrading on wages of less educated natives. In the absence of this downgrading, the wage effect of migration on natives without completed high school are substantially smaller, while wage effects for more educated Colombians are largely unchanged. The results reflect the aggregate productivity benefits of moving migrants into high-skill occupations as well as the greater complementarity between migrants and natives in these occupations.