Refugees’ Transition from Welfare to Work: A Quasi-Experimental Approach of the Impact of the Neighbourhood Context

Abstract

This study analyses the impact of the neighbourhood context on the likelihood that refugees move from social assistance to paid employment. It makes use of Dutch policy that resulted in an exogenous placement of refugees in their first regular housing. This natural quasi-experiment allows us to estimate intent-to-treat effects of initial neighbourhood characteristics on the likelihood of transitioning from welfare to work. We consider the impact of the employment share and the median level of income among natives and co-ethnics, using Dutch longitudinal administrative data and discrete time event-history modelling. Our findings indicate that refugees are more likely to enter the labour market when the neighbourhood’s employment share among natives is higher. A similar effect for employment among co-ethnics is not found. There is also no evidence that the placement of refugees in an area with a higher median income among co-ethnics or natives facilitates the transition from welfare to work.

Spatial overlap: Trade-offs in Refugees’ Residential Choices

“…This is in line with classic arguments from urban sociology according to which so-called 'ethnic enclaves' provide beneficial community support including jobs in the enclave economy and job-referrals via socio-ethnic networks (Park and Burgess 1921;Wilson and Portes 1980;Hanhörster and Wessendorf 2020). However, a number of studies reports no systematic association (Azlor et al 2020;Damm and Rosholm 2010;Gërxhani and Kosyakova 2022;Kristiansen et al 2021), or one that depends on how well the already settled co-ethnics are established, for example in terms of (self-)employment, income, or education (Andersson 2020;Beaman 2012;Damm 2014;Edin, Fredriksson, and Åslund 2003;Stips and Kis-Katos 2020). In sum, areas with low unemployment are clearly beneficial to recent refugees, whereas the evidence of benefits of co-ethnic embedding is somewhat mixed.…”

“…A growing literature studies outcomes of refugees who happen to be exogenously allocated to deprived areas with high unemployment rates by dispersal policies. These studies demonstrate that refugees sent to such areas take considerably longer to enter the labor market than those placed in areas with better opportunities (Kristiansen et al 2021;Azlor, Damm, and Schultz-Nielsen 2020;Aksoy, Poutvaara, and Schikora 2020;Åslund et al 2010;Godøy 2017;Damm and Rosholm 2010). Using the same research design, other scholars provide evidence that refugees who are exogenously placed in areas with high shares of co-ethnics do better in the labor market (Battisti, Peri, and Romiti 2016;Damm 2009;Martén, Hainmueller, and Hangartner 2019).…”

“…On the one hand, they show that refugees move to areas that offer them important resources and opportunities, at least in the short term. On the other hand, the association of local unemployment and refugees' relocation is mainly driven by resources that do not immediately improve refugees' medium-or longer-term labor market chances; prior research is unequivocal when it comes to negative consequences of local unemployment for refugees' socio-economic integration (e.g., Azlor et al 2020;Aksoy et al 2020;Godøy 2017), but much less positive regarding the question in how far co-ethnics networks or available housing and urbanity further their labor market chances (e.g, Damm and Rosholm 2010;Gërxhani and Kosyakova 2022;Kristiansen et al 2021).…”

The effect of co-ethnic social capital on immigrants' labor market integration: a natural experiment

“…10:15 Aguilera & Massey, 2003;Kalter & Kogan, 2014) or uses either the co-ethnic community size in the destination country as a proxy for potential co-ethnic networks (e.g., Battisti et al, 2022;Damm, 2009;Edin et al, 2003;Kristiansen et al, 2021;Stips & Kis-Katos, 2020) or the frequency and/or intensity of post-immigration contacts with different population groups (e.g., Kanas et al, 2011;Lancee, 2012). The main argument of this literature is that individuals' embeddedness in a network allows benefits from relevant (social) resources.…”

Contextual poverty and obtained educational level and income in Sweden and the Netherlands: A multi-scale and longitudinal study

“…Visible signs in the neighbourhood such as decay or affluence are another issue that was much discussed in terms of social disorganisation in the earlier literature (Sampson, 2012; Wilson, 1987). Individual income can also be expected to be influenced by the larger regional context in which adolescents grow up; for example, by regional employment structures in terms of levels of (un)employment, and the broader occupational structure of regional labour markets (Andersson and Malmberg, 2015; Kristiansen et al, 2022). An effect on future income was found for high unemployment levels at k = 12,800.…”