Local Labor Market Impacts of the Venezuelan Immigration Wave in Chile

Venezuelans now represent the largest displaced population globally, surpassing Syrians, Afghans, and Ukrainians. The majority have resettled in South American countries, including Colombia, Peru, and Chile. The paper presented in this ZEW Research Seminar estimates the impact of the large-scale influx of Venezuelan migrants on local labor market outcomes in Chile, using data from the Chilean National Employment Survey spanning 2010 to 2023. The authors examine several labor market indicators, including labor force participation, employment, entrepreneurship, informality, and hours worked. The results show that Venezuelan immigration has increase labor force participation and reduce involuntary part-time employment among natives, with no robust evidence of negative effects on local’s employment.  In contrast, Venezuelan immigrants themselves experience declines in job quality, including lower employment probabilities, reduced access to formal jobs, and higher informality, indicating that they bear most of the adjustment costs. The effects are heterogeneous by gender and education: low-educated native women shift toward informal and self-employed work, while highly educated women experience occupational upgrading. These findings highlight the complex and multifaceted impact of migration on host-country labor markets.