after 15 years (Access Economics, 2008). A dynamic study by Gal (2018) however, does not find any evidence of benefits from refugees being large enough to offset the high cost, while D’Albis et al. (2018) finds no significant effect on fiscal balances in the short run in Western Europe. Assuming that cost and revenue are proportional to population, Uscategui and Andrea (2019) estimates that Venezuelan in Peru will on average contribute to about 0.23% of GDP between 2019 and 2025.

A recent study (FGVDAPP, 2020) finds that the Brazilian public sector did not spend much more than it collected taxes from the Venezuelan refugees and migrants that Brazil was hosting in 2018, but they did a static analysis and made some strong assumptions.

Although previous literature on fiscal impact of forced displacement has been limited, studies on the economic impact and especially labor market impact have been growing incessantly but majority of the studies find negligible effects of refugees on host country’s labor market outcomes with the detrimental effects on employment and wages being focused on the most vulnerable section of the labor force, mainly the young, women and informal workers (Clemens and Hunt (2017), Verme and Schuettler (2021)). When significant, both employment and wage loss tend to occur in the short-run and in middle-income countries (Verme and Schuettler, 2021). Bonilla-Mejia et al. (2020), Caruso et al. (2019) and Penaloza (2019) focus on the impact of the influx of Venezuelans on the labor market in Colombia and find that it reduces wages, especially for male workers in the informal sector. Caruso et al. (2019) finds that a percentage point increase in displaced Venezuelans reduces informal sector wages by ten percentage points in urban areas. Bahar et al. (2021) provides evidences of asymmetrical effects of a large scale amnesty program that granted work permits to undocumented Venezuelans in Colombia that helped labor market outcomes of Venezuelan at the cost of Colombian workers. Morales and Pierola (2020) also finds heterogeneity in the impacts of Venezuelan refugees and migrants on native labor market outcomes in Peru with increasing likelihood of tertiary educated workers being employed in non-service sector and decreasing wage for secondary educated workers working in service sector.

The sudden influx of Venezuelan in 2018 in Brazil and their concentration in Roraima allows this paper to utilize regression discontinuity design and to identify the impact of the Venezuelan forced displacement as population shock and study its implication on the fiscal scenario and labor market outcomes.

# **4 Theory and Data**

The influx of displaced Venezuelans mainly through Roraima theoretically should create two types of shock - a population shock with a sudden increase in population of the state and an expenditure shock with host government or international community providing for housing, education and social assistance to the forcibly displaced. Annual data on population from IBGE (Brazilian Institute of Geography and Statistics) reveals that the population of Roraima jumped from about 522,636 in 2017 to about 576,668 in 2018, which amounts to about 10.3% increase in the population. Figure 4a, which shows the population in y-axis and the distance in years from 2018 as the x-axis, reveals that the growth rate of the population increased too, while population grew by about 5% between 2014 7