The study gauges the impact of refugee influx on the labor market in Pakistan. The impact of Afghan refugees is analyzed using three indicators of labor market namely, unemployment, formal employment and informal employment from years 1979 to 2022. For the purpose of analysis, ADF and PP tests are applied first for examining unit root problem. Variables are found having mixed order of integration so ARDL bound test for co-integration is used to derive long run and short run relationship between labor market indicators and refugee inflow. It is found that Afghan refugees have caused positive impact on the labor market of Pakistan in long run while in the short run, it increases unemployment rate. Expenditure on Education, CPI, GDP, Trade Openness and Gross Fixed Capital are significantly reducing Unemployment rate of Pakistan.  Expenditure on Education and Gross Fixed Capital are found to have positive effect while CPI and population Growth are reducing Formal Employment. Hence, it is concluded that refugees can serve as stimulus for investment and production in the country.  

The study gauges the impact of refugee influx on the labor market in Pakistan. The impact of Afghan refugees was analyzed using three indicators of labor market namely,unemployment, formal employment and informal employment from years 1979 to 2022. ARDL bound test for co-integrationis used to derive long run and short run relationship between labor market indicators and refugee inflow. It is found that Afghan refugees have caused positive impact on the labor market of Pakistan in long run while, in the short run it increase unemployment rate. Hence, it is concluded that refugees can serve as stimulus for investment and production in the country.