Characterization of immigration in the Chilean Pension and Unemployment Insurance Systems

The levels of immigration recorded in Chile over the last few decades are unprecedented. Despite the magnitude of this phenomenon, the literature on immigration in Chile is scarce. Even though it is expected immigration has important effects on the Chilean labour market, there is not much historical neither systematic evidence available for a better understanding of the phenomenon. This can be mainly explained by the fact that related sources of information are limited and infrequent. This paper aims at describing the demographic and socio-economic characteristics of the immigrants' formal working population in Chile (i.e. individuals working in the formal sector who by law contribute to the social security system), using administrative records of the Pension Systems and the Unemployment Insurance System, in addition to information provided by the Civil Registry and Identification Service on their nationality and country of origin. The results obtained show an exponential increase in new foreigners to the social security system over the last few years. Haitians and Venezuelans are the largest groups, representing 70% of the total number of new foreign affiliates to the Pension System in 2018. The average wage difference between Chileans and foreigners increased by over 600% during the 2010 2018 period, differing by almost USD 300 in 2018 in favor of Chileans. This difference deepens with higher wages. Finally, there is an important gender gap both for Chileans and foreigners (around 10% in 2018). The gender gap for foreigners has importantly decreased during the last decade reaching the relatively more stable, but still important, Chilean gender gap of around 10%. However, foreign women are in a much weaker relative situation than Chilean women when age, cohort and time effects are obtained.