Carlos A. Mesa-Guerra

Home     Research    Teaching

Areas of Research

Peer-Reviewed Publications

The Effect of Minimum Wages on Rural Employment: Theory and Evidence from Colombia, Coyuntura Económica, 2020.

Working Papers


Immigrant Networks in the Labor Market

Latest draft. July 2023.

The Online Appendix is available here    


Using unique survey data linked to social security records and the large influx of Venezuelan immigrants to Colombia in recent years, this paper reexamines the role played by referral networks in the labor market. By explicitly accounting for both the urban and the social space, this paper provides new insights into the mismatch between the residential location and labor outcomes of immigrants. Referrals are a critical source of information about available jobs for immigrants, particularly for recent arrivals, but struggle to improve the quality of the match between firms and workers. The misalignment between where immigrants live and where they can find suitable employment opportunities reinforces occupational downgrading and increases the persistence of informal employment.


The Fiscal Impact of Immigration: Labor Displacement, Wages, and the Allocation of Public Spending (with A. Castaño)

Latest draft. March 2023.

The Online Appendix is available here                

We reexamine the effect of immigration on public finances by accounting for second-order effects. We exploit exogenous variation in immigration across Colombian metropolitan areas between 2013 and 2018, resulting from the large increase in Venezuelan immigrants, and instrument immigrants’ residential location using pre-existing settlement patterns and the distance between origin-destination flows. Our findings indicate that immigration did not reduce natives’ average fiscal contributions. Exploring the mechanisms in place, we document that immigration had no effect on employment, average wages in the upper half of the wage distribution, or hours worked that would have explained changes in labor-driven tax contributions. In addition, immigration did not trigger a decline in property values or changes in the composition of local public spending. The results suggest that general equilibrium effects are not sufficiently large enough to induce changes in fiscal contributions.


Estimating the Effect of Immigration on Public Finances: Evidence from the Influx of Venezuelan Migrants to Colombia (with T. Ramírez-Tobón)

Latest draft. January 2022. 

The Online Appendix is available here            


What is the fiscal impact of immigration on all levels of government? We study this question using the large and sudden increase in Venezuelan immigration to Colombia from 2013 to 2018. Over a million Venezuelan-born individuals and roughly 350 thousand native-born returnees moved to Colombia during this period. Our findings indicate that while immigrants tend to have less access to, and make lower use of, the welfare system, they have lower net fiscal contributions relative to natives overall, driven by lower contributions to regional and local government budgets. However, relative to the size of the economy, their overall fiscal effect is small. Lower fiscal contributions by immigrants are explained entirely by recent arrivals. Immigrants that have been in the country for more than a year have—if any—a better per capita fiscal position relative to natives. We show that the fiscal effect on local budgets is mediated by two forces: cities’ fiscal effort (i.e., the ability to raise revenues from their own sources) and the fraction of immigrant inflows in the local population.

Work in Progress


A Model of Spatial Job Referral Networks

Preliminary draft. July 2023.


I provide new insights on the contribution of referrals to the overall employment of workers, their commuting, residence, and employment locations by linking the urban and social space. Using the well-known fact that workers rely on their social contacts to find jobs, I develop a model in which workers face a tradeoff between searching for employment outside their neighborhood of residence driven by the strength of their social network and the commuting cost. The model incorporates three key facts from the data: dual search methods (direct vs. indirect), network congestion, and spatial mismatch. The model is extended to capture first-order features of cities and to simulate the effect of shutting down job referrals. Results suggest that networks may suffer from congestion effects, reducing workers employability, particularly for immigrants, but allow workers to find better matches. Overall, in the absence of job referral networks, unemployment, wages, welfare, and output fall. However, in the case of immigrants, removing search through the network increases welfare. The results suggest that referrals allow workers to find jobs closer to where they live, avoiding the wage cost of commuting. Shutting down referrals increases the frequency of commuting, especially for ethnic groups.


Carrying the Weight of Autonomy? Growth and Spatial Inequality among Municipalities in Colombia (with Carlos F. Holguín)


We study the implications of fiscal decentralization for growth and regional inequality at the local level in Colombia. We exploit a new dataset at the municipal level containing multiple measures of fiscal decentralization and estimates of municipal GDP per capita based on satellite-recorded data between 1993 and 2018. We apply machine learning techniques to night-time and daytime satellite images to predict changes in income at high spatial resolutions and test the convergence hypothesis in the growth literature, examining the role of fiscal decentralization in closing the urban-rural gap.