Regularization and the Formation of Social Capital : Evidence from Forced Migrants in Colombia

Overview & Synopsis

This paper estimates the medium-run effects, 4.5 years after launch, of a regularization program that granted temporary legal status, freedom of movement, work authorization, and access to social programs to nearly half a million Venezuelan forced migrants in Colombia with no criminal record. Because the program was announced unexpectedly and applied retroactively to migrants who had registered in a census before a sharp eligibility cutoff, the paper identifies its effects using a fuzzy regression discontinuity design and a unique two-wave panel survey. The largest medium-run gains were in social capital. At the cutoff, eligible migrants scored 0.95 standard deviation higher than ineligible peers on a social integration index capturing belonging, friendships with Colombians, community participation, and attachment to Colombia, and 0.97 standard deviation higher on a prosocial behavior index measuring generalized trust and trust toward both Colombians and Venezuelans. Neither effect is detectable in the short run, and both emerge only over time. Economic gains, by contrast, arose immediately and largely persisted. Eligible migrants earned 69 percent higher monthly labor income, scored 2.6 standard deviations higher on a service access index, and made substantial investments in housing, with housing quality increasing from 0.60 to 1.27 standard deviations between survey waves. The implied fiscal savings to Colombia also increased over time, rising from roughly 40 to 70 percent of the fiscal cost associated with irregular households as beneficiaries moved toward fiscal balance. These findings suggest that the largest social capital and fiscal returns to regularization accrued gradually through sustained legal inclusion and repeated positive interactions with institutions and host communities rather than through the act of legalization itself.