The Unintended Consequences of Deportations : Evidence from Firm Behavior in El Salvador
Can repatriation inflows impact firm behavior in origin countries? This paper examines this question in the context of repatriation inflows from the United States and Mexico to El Salvador. The paper combines a rich longitudinal data set covering a...
| Main Authors: | , , , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/488291611240337342/The-Unintended-Consequences-of-Deportations-Evidence-from-Firm-Behavior-in-El-Salvador http://hdl.handle.net/10986/35068 |
| Summary: | Can repatriation inflows impact firm
behavior in origin countries? This paper examines this
question in the context of repatriation inflows from the
United States and Mexico to El Salvador. The paper combines
a rich longitudinal data set covering all formal firms in El
Salvador with individual-level data on all registered
repatriations from 2010 to 2017. The empirical strategy
combines variation in the municipality of birth of
individuals repatriated over 1995-2002—before a significant
change in deportation policies—with annual variation in
aggregate inflows of repatriations to El Salvador. The
findings show that repatriations have large negative effects
on the average wages of formal workers. This is mainly
driven by formal firms in sectors that face more intense
competition from the informal sector, which deportees are
more likely to join. Repatriation inflows also reduce total
employment among formal firms in those sectors. Given that
most deportees spend less than a month abroad, these
findings suggest that the experience of being detained and
deported can have strong negative effects not only on the
deportees, but also on their receiving communities. |
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