Press Release

Economic Shocks of COVID-19 Disproportionately Affects Displaced Venezuelans in Peru, New Research Finds

December 16, 2020
Contact: Eva Grant Center for Global Development +1.202.416.4027

In Peru, displaced Venezuelans typically earn 35 percent less than their Peruvians hosts.  

WASHINGTON—The Center for Global Development and Refugees International launched two reports today finding that the economic effects of the COVID-19 pandemic have disproportionately impacted displaced Venezuelans in comparison to their Peruvian hosts. Additionally, the research identifies major barriers to access to work for displaced Venezuelans that, if removed, would allow Venezuelans to positively contribute to Peru’s economy and promote development.

The new research finds that Venezuelans earn 35 percent less on average than their Peruvian hosts. Many Venezuelans in Peru are forced to work in informal, low-paying jobs as they confront legal and practical barriers to accessing work, which leaves them more vulnerable to economic shocks, including the pandemic. The study finds that 71 percent of employed Venezuelans in Peru work in sectors highly impacted by the pandemic, compared to 56 percent of employed Peruvians. This trend is worse for Venezuelan women, who are more likely to work in highly impacted sectors. 

Meaningful economic inclusion of Venezuelans could lead to a stronger economy for Peru, the research shows. Venezuelans can increase Peru’s GDP because they consume goods and services, pay taxes, start and invest in businesses, provide skills that complement those of Peruvians, and more. In turn, allowing Venezuelans to work in roles that match their qualifications will increase their self-reliance. 

Peru is one of the largest destination countries—only second to Colombia—for Venezuelans fleeing horrors at home. However, the COVID-19 crisis has made the situation for Venezuelans in Peru more precarious, and Peru’s recent domestic political upheaval could only make matters worse. 

“Peru is facing three crises—the pandemic, economic freefall, and political chaos,” said Martha Guerrero Ble, one of the report’s authors and a program associate at Refugees International. “The economic hardships displaced Venezuelans now face will only worsen without swift action to meaningfully include them in the economy.”

The two reports are a product of the Center for Global Development and Refugees International’s “Let Them Work” initiative. Some key takeaways include: 

  • Venezuelans in Peru face legal and practical barriers to their economic inclusion, including difficulties regularizing their status, extra taxes, limits on employment, difficulties verifying credentials, xenophobia, and discrimination, among other issues specific to Venezuelan women, entrepreneurs, and asylum seekers.
  • Prior to the pandemic, Venezuelans were earning 35 percent less than Peruvians on average.
  • The income gaps were starkest for highly educated individuals, with Venezuelans with at least some university education earning 71 percent less than Peruvians. 
  • Venezuelan women earned 23 percent less than Peruvian women and 49 percent less than Peruvian men.
  • 71 percent of employed Venezuelans work in highly impacted sectors, compared to 56 percent of employed Peruvians.
  • Venezuelan women are even more adversely affected, with 78 percent of employed Venezuelan women working in highly impacted sectors, compared with 67 percent of employed Venezuelan men and 67 percent of employed Peruvian women.

“As Peru faces a 14 percent contraction in its economy, the data is compelling and shows that including Venezuelans in the economy is mutually beneficial,” said Helen Dempster, assistant director at the Center for Global Development and project manager for “Let Them Work.” “The good news is that there are straightforward policy changes Peru can make to improve the economic crisis both for their citizens and for displaced Venezuelans.”

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“Let Them Work” is a three-year program of work led by the Center for Global Development (CGD) and Refugees International and funded by the IKEA Foundation and the Western Union Foundation. The initiative aims to expand labor market access for refugees and forced migrants, by identifying their barriers to economic inclusion and providing recommendations to host governments, donors, and the private sector for how to overcome them.