September 2022

IZA DP No. 15595: Cousins from Overseas: The Labour Market Impact of a Major Forced Return Migration Shock

Lara Bohnet, Susana Peralta, João Pereira dos Santos

We study the labour market impact of the return of half a million Portuguese due to onset of the colonial war in 1974. Both the size and similarity with the native population (almost 80% were Portuguese-born) make this a unique shock. We use census data from 1960 and 1981 to document a decrease in dependent employment of 15% for native males and 62% for females. The bulk of the effects is driven by Portuguese-born repatriates. We use shit-share IVs based on the repatriates' municipality of birth, and the municipal hotel capacity, exploiting a large-scale resettlement program.