Wage Inequality of Venezuelan Migrants in Ecuador

Abstract

Venezuelan immigration to the equator has been a pressure on the country’s labor market. The government estimates that some 300,000 immigrants have settled permanently in the country. This paper analyzes the differences between the distribution of salaries of Venezuelan immigrants in Ecuador and the locals. Using microdata from the 2016–2019 employment survey, a parametric and nonparametric decomposition was made. A gap between 14 and 42% was found for newly arrived immigrants. However, for those who arrived 3 years ago the gap is not significant. The reduction in this gap is due to an improvement in the supply of workers. This confirms the fact that there is employment discrimination against newly arrived immigrants despite the fact that they show equal or even higher endowments than locals.

Appendix

Results of the Mincerian equation for the Oaxaca–Blinder decomposition

Variable	Feature evaluated	Recién llegados	One year	Two years	Three years	Feature base
Sex	Woman	− 0.07	− 0.07	− 0.07	− 0.07	Man
Age		0.00	0.00	0.00	0.00	Continue
Classification	Informal	− 0.16	− 0.17	− 0.17	− 0.17	Formal
	Unclassified	− 0.12	− 0.12	− 0.12	− 0.12
Level of education	Literacy center	0.14	0.14	0.14	0.14	None
	Basic	0.12	0.12	0.12	0.12
	High school	0.18	0.18	0.18	0.18
	Superior	0.36	0.36	0.36	0.37
Area	Rural	− 0.06	− 0.06	− 0.06	− 0.06	Urban
Job site	Work in progress	0.13	0.13	0.13	0.13	Local
	Moves around	− 0.10	− 0.10	− 0.09	− 0.10
	On the street	− 0.10	− 0.10	− 0.10	− 0.10
	Street Kiosk	− 0.17	− 0.17	− 0.17	− 0.17
	Own or rented premises	− 0.08	− 0.10	− 0.10	− 0.10
	Local cooperative or association	0.25	0.25	0.25	0.25
	Housing other than your own	0.00	0.00	0.00	0.00
	Your home	− 0.27	− 0.27	− 0.27	− 0.27
	Farm or land	− 0.01	− 0.01	− 0.01	− 0.01
	Farm on another’s land	0.05	0.05	0.05	0.05
	Farm	0.13	0.13	0.13	0.13
Firm size	More than 100	0.16	0.16	0.16	0.16	Less than 100
Economic sector	Mining	0.31	0.31	0.31	0.31	Agriculture
	Industries	− 0.04	− 0.03	− 0.03	− 0.04
	Utilities	0.29	0.29	0.29	0.29
	Construction	0.11	0.11	0.11	0.11
	Commerce	0.09	0.10	0.10	0.10
	Transportation	− 0.06	− 0.06	− 0.06	− 0.06
	Hotels	0.07	0.07	0.07	0.07
	Information and telecommunications	− 0.02	− 0.02	− 0.02	− 0.02
	Financial	− 0.07	− 0.07	− 0.06	− 0.07
	Real estate	0.16	0.16	0.16	0.16
	Professional services	0.02	0.02	0.02	0.02
	Government	− 0.01	− 0.01	− 0.01	− 0.01
	Education	− 0.02	− 0.02	− 0.02	− 0.02
	Social Services	0.22	0.22	0.22	0.22
	Entertainment	− 0.09	− 0.09	− 0.09	− 0.09
	Other services	0.11	0.11	0.11	0.11
Occupation	Scientific and intellectual professionals	− 0.23	− 0.23	− 0.22	− 0.23	Administrative staff
	Technicians and mid-level professionals	− 0.44	− 0.44	− 0.44	− 0.44
	Office employees	− 0.60	− 0.59	− 0.59	− 0.59
	Service and retail worker	− 0.70	− 0.70	− 0.70	− 0.70
	Skilled agricultural and livestock work	− 0.69	− 0.69	− 0.69	− 0.69
	Officers, workers and craftsmen	− 0.64	− 0.63	− 0.64	− 0.63
	Machinery operators	− 0.63	− 0.63	− 0.63	− 0.63
	Unskilled workers, occupations	− 0.73	− 0.73	− 0.73	− 0.73
	Armed Forces	− 0.28	− 0.28	− 0.28	− 0.27
Relationship	Spouse	− 0.02	− 0.02	− 0.02	− 0.02	Boss
	Son or daughter	− 0.09	− 0.09	− 0.09	− 0.09
	Son-in-law or daughter-in-law	− 0.06	− 0.06	− 0.06	− 0.06
	Grandson	− 0.09	− 0.09	− 0.09	− 0.09
	Parents or in-laws	− 0.13	− 0.12	− 0.15	− 0.14
	Other relatives	− 0.06	− 0.06	− 0.06	− 0.06
	Domestic employee	0.54	0.54	0.54	0.54
	Other non-relatives	− 0.08	− 0.10	− 0.09	− 0.10
Marital status	Separate	− 0.06	− 0.05	− 0.05	− 0.05	Married
	Divorced	− 0.02	− 0.02	− 0.02	− 0.02
	Widow(er)	− 0.05	− 0.05	− 0.05	− 0.05
	Free union	− 0.05	− 0.04	− 0.05	− 0.04
	Single	− 0.07	− 0.07	− 0.07	− 0.07
Ethnicity	Afro-Ecuadorian	0.05	0.06	0.06	0.06	Indigenous
	Black	− 0.05	− 0.05	− 0.05	− 0.05
	Mulatto	0.03	0.02	0.03	0.02
	Montubio	0.06	0.06	0.06	0.06
	Mestizo	0.05	0.05	0.05	0.05
	White	0.07	0.06	0.07	0.07
	Other, which	− 0.14	− 0.16	− 0.28	− 0.28
Type of contract	Permanent / indefinite / current contract	− 0.13	− 0.13	− 0.13	− 0.13	Appointment
	Temporary, occasional or occasional contract	− 0.27	− 0.27	− 0.27	− 0.27
	Per work, per piece	− 0.42	− 0.42	− 0.42	− 0.42
	By the hour	− 0.29	− 0.28	− 0.29	− 0.28
	Per day’s wage	− 0.35	− 0.35	− 0.35	− 0.34
Venezuelan Immigrant	Yes	0.0025	0.0021	0.0026	0.0055	No
N		10,167,801	10,165,211	10,152,960	10,137,063
r2_a		0.528	0.527	0.528	0.528
ll		− 5,750,794	− 5,740,084	− 5,735,651	− 5,731,294

1. Source Author estimations