Arbeitspapier

Do immigrants bring fiscal dividends? The case of Venezuelan immigration in Colombia

This paper analyzes the effects of recent Venezuelan immigration to Colombia on the fiscal balance, the labor market, and economic growth. For this purpose, we built a dynamic general equilibrium model with a search and matching structure in the labor market. The higher fiscal spending to address immigration negatively impacts the government's budget in the short term, which is offset by higher output, consumption, and employment level, increasing the government's revenues mainly through indirect tax collection. The effect on the labor market is different for unskilled workers--whose higher supply generates a negative effect on wages and an increase in the unemployment rate--and skilled workers, who benefit from higher wages and lower unemployment. These changes in the labor market affect the government's revenue, resulting, in the long term, in positive fiscal dividends of migration.

Language
Englisch

Bibliographic citation
Series: IDB Working Paper Series ; No. IDB-WP-1170

Classification
Wirtschaft
Fiscal Policy
Geographic Labor Mobility; Immigrant Workers
Subject
H 24
fiscal policy
labor market
migration
unemployment

Event
Geistige Schöpfung
(who)
Valencia, Oscar M.
Angarita, Matilde
Santaella, Juan
de Castro, Marcela
Event
Veröffentlichung
(who)
Inter-American Development Bank (IDB)
(where)
Washington, DC
(when)
2020

DOI
doi:10.18235/0002993
Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Valencia, Oscar M.
  • Angarita, Matilde
  • Santaella, Juan
  • de Castro, Marcela
  • Inter-American Development Bank (IDB)

Time of origin

  • 2020

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