The Economic Impact of Syrian Refugees on Host Countries: Quasi-Experimental Evidence from Turkey

Abstract

The Syrian Conflict generated forced immigration from northern Syria to southeastern Turkey. Arrival of refugees resembles a natural experiment, which offers good opportunities to study the economic impact of immigration. I study three main outcomes: labor markets, consumer prices, and housing rents. I document moderate employment losses among native informal workers, which suggests that they are partly substituted by refugees. Prices of the items produced in informal labor intensive sectors declined due to labor cost advantages generated by refugee inflows. Finally, refugee inflows increased the rents of higher quality housing units, while there is no effect on lower quality units.

The Impact of Immigration on the Labor Market

“…The validity of the results depends on the assumption that the treatment and comparison areas are similar in terms of economic opportunities. Tumen () found that although wages did not react following the supply shock, the employment rates of Turkish individuals decreased more in Southern than in Northern regions of Turkey.…”

The Impact of Syrian Refugees on the Turkish Economy: Regional Labour Market Effects

“…Their analysis is descriptive, and, as such, does not control for other influences that may be responsible for the differences in the rates before and during the Syrian refugee crisis. Ceritoglu et al (2017) and Tümen (2016), utilizing a micro-level dataset from a household survey, compare labour market outcomes of natives before and after the refugee influx. They find that Syrian refugees increase unemployment and formal employment, but decrease informal employment.…”

“…Ceritoglu et al (2017), Tümen (2016) and Balkan and Tümen (2016) all use a difference-in-difference models with fixed effects. They all use the same treatment and control regions, and the same treatment and control period.…”

“…Both of these studies use the rest of Turkey as their control region, rather than a few regions that are close to the border that is most affected by the Syrian refugee crisis. Ceritoglu et al (2017) and Tümen (2016) use a micro-level dataset and the other aforementioned studies use aggregate region level data. Differences in findings are potentially due to these differences in methodology.…”

Decomposing the Impact of Immigration on House Prices

“…4 Other studies include Stillman & Maré (2008) who provide positive impact estimates for New Zealand; Degen & Fischer (2009) who find positive effects for Switzerland; Akbari & Aydede (2012) find positive but small impacts in Canada; Frostad (2014) estimates the impact in Norway; and Kürschner (2017) for Germany. More recently, Tumen (2016) study the impact of the Syrian refugees inflow on Turkish housing rents and finds a positive effect on high quality units and no effect on low-quality units. 5 In their paper the authors use population as the main regressor and estimate the direct immigrant impact on the two outcomes.…”