Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237465 
Year of Publication: 
2020
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1170
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
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.
Subjects: 
fiscal policy
labor market
migration
unemployment
JEL: 
E62
J61
H 24
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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