This paper evaluates the effect of Venezuelan migration on productivity at the city level (municipality level) in Colombia between 2013 and 2018. This relationship faces endogeneity on two fronts. On the one hand, productivity estimation faces an omitted variables bias, while the relationship between migration and productivity may have dual causality. These problems are solved using a control function, and instrumental variables approach (Bartik instrument), respectively. The results indicate that productivity at the municipality level has not been impacted by Venezuelan migration. Beyond productivity, there are no effects on urbanization and agglomeration effects. These results can be explained by the fact that migrants face hiring barriers and must resort to informal jobs, the mismatch between the growing labor force and labor demand, and the misallocation of production factors. However, there are positive and significant effects on the specialization of intermediate cities.
