The Fiscal Impact of Forced Migration: Evidence from Brazil’s Public Health System

• In Event: The Health Consequences of Forced Migration and Democratic Erosion

Abstract

This paper examines the fiscal impacts of forced migration on Brazil’s public healthcare system in the wake of the Venezuelan refugee crisis. Since 2015, Brazil has experienced a dramatic influx of Venezuelan migrants, primarily through its single land border with Venezuela. Given the decentralized structure of Brazil’s Sistema Único de Saúde (SUS)—a universal and publicly funded healthcare system—this exogenous population shock presents a unique opportunity to examine how local governments absorb sudden increases in service demand. We implement a two-stage least squares strategy using distance to the border as an instrument to estimate the causal effect of migrant inflows on municipal healthcare expenditures. Our results show that while total spending increases, it does not rise proportionally to the population shock. When migrants are included in the population denominator, per capita spending declines significantly—especially in transfer-based funding—suggesting that municipalities bear most of the fiscal burden using their own resources, with limited support from federal transfers. These findings indicate a short-term fiscal asymmetry where rising costs are not offset by commensurate revenue growth, challenging the theoretical universality of SUS under resource constraints. The paper contributes to the literature on forced migration by offering new evidence from a developing country context, highlighting the strain on public service provision systems that operate under limited fiscal capacity. It also adds to the growing body of work evaluating the Venezuelan crisis’ regional impacts, offering a novel focus on healthcare and the fiscal dimension of refugee integration.

Author

• Renan Chicarelli Marques, Duke University
  Presenting Author