Venezuelan Migration Could Raise GDP Growth in Ecuador by Up to 2 Percent

A recent study led by the World Bank estimates that Venezuelan migrants and refugees in Ecuador, most of them highly educated young people, could raise the country’s GDP by up to 2 percent if they have access to jobs and income corresponding to their educational level.

Challenges and Opportunities of Venezuelan Migration in Ecuador is a study carried out in collaboration with six United Nations agencies. The report analyzes the situation of the Venezuelan migrant population and of the recipient communities. It includes relevant information for public policies and cooperation activities based on recent evidence, as well as for the definition of financing and humanitarian aid to complement the efforts of the Ecuadorian government.

The situation in Venezuela has triggered an unprecedented exodus in South America. To date, more than 400,000 Venezuelans have fled to Ecuador. The country has received the third largest share of this migratory flow after Colombia and Peru. This influx occurred during a challenging period for Ecuador due to economic difficulties, which have been exacerbated by falling oil prices and the impact of the COVID-19 pandemic.

According to the study, the majority of the Venezuelans interviewed had completed secondary school and many have some higher education, especially the women. If this population could obtain jobs commensurate with their educational level, they could generate revenue totaling between 1.6 and 1.9 percent of the country’s GDP.

The study also identified the main constraints to making this a reality: obtaining legal migratory status and the documents needed to certify the studies completed. According to the quantitative and qualitative analyses carried out for this study, just 15 percent of the Venezuelan population of working age interviewed had legal migratory status. Nevertheless, 65 percent have some type of job. Four in 10 Venezuelans in Ecuador were victims of discrimination – mainly due to their nationality – during the report data collection and preparation period.

Another key challenge is school enrolment: over 50 percent of school-aged migrants and refugees do not attend school, mainly because of the costs involved, such as for materials or transportation, and because of the lack of identification documents.

“The World Bank recognizes the efforts of the Government of Ecuador to address the economic challenges and at the same time the difficulties involved in the sustained flow of a large number of immigrants,” said Juan Carlos Alvarez, resident representative of the World Bank in Ecuador. “We believe that this study can serve as additional input for decision-making and public policy development to increase the wellbeing of the Ecuadorian and Venezuelan population. It can also serve to inform the support of international cooperation agencies, such the recent assistance that the government received from the member states of the Global Concessional Financing Facility (GCFF).”

More than half — 57 percent — of Venezuelans in Ecuador work informally, while 71 percent have temporary employment contracts. According to the report, Venezuelan migrants work five more hours per week than their Ecuadorian peers yet receive 42 percent less pay for the same work.

Bureaucratic procedures and the lack of documentation are the main constraints to legalizing their migratory status and participating formally in the labor market. Women are more vulnerable to job discrimination and their access to employment is limited by childcare duties given that more than half of Venezuelan children and adolescents in Ecuador do not attend school.

Due to the COVID-19 pandemic in Ecuador, in seven of every 10 households of the migrant and refugee Venezuelan population, there is an adult who has “skipped a meal,” in other words, who did not have breakfast, lunch or dinner. Additionally, in recent months, in half of the Venezuelan households interviewed, at least one of their members has become unemployed.

“Ecuador’s economic and social situation, coupled with the COVID-19 crisis, mainly affects the country’s most vulnerable populations. It has an impact on Venezuelan populations, but also on the communities that receive them. Therefore, developing protection and social inclusion alternatives requires the efforts and commitment of everyone: the government, civil society, the private sector and the international community,” said Sergio Olivieri, a World Bank senior economist and one of the report’s authors.

The study, Challenges and Opportunities of Venezuelan Migration in Ecuador, was requested by the Government of Ecuador to analyze the fiscal impact of the migratory flow occurring since 2018. To this end, the World Bank worked with different Ecuadorian government and United Nations agencies, using interviews, focus groups, administrative records and innovative mechanisms such as big data. This report is part of a World Bank research series on Venezuelan migration in Latin America. Previously, the organization published studies on Colombia (2018) and Peru (2019).

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