The Labor Market Consequences of Refugee Supply Shocks

Abstract

The continuing inflow of hundreds of thousands of refugees into many European countries has ignited much political controversy and raised questions that require a fuller understanding of the determinants and consequences of refugee supply shocks. This paper revisits four historical refugee shocks to document their labor market impact. Specifically, we examine: The influx of Marielitos into Miami in 1980; the influx of French repatriates and Algerian nationals into France at the end of the Algerian Independence War in 1962; the influx of Jewish émigrés into Israel after the collapse of the Soviet Union in the early 1990s; and the exodus of refugees from the former Yugoslavia during the long series of Balkan wars between 1991 and 2001. We use a common empirical approach, derived from factor demand theory, and publicly available data to measure the impact of these shocks. Despite the differences in the political forces that motivated the various flows, and in economic conditions across receiving countries, the evidence reveals a common thread that confirms key insights of the canonical model of a competitive labor market: Exogenous supply shocks adversely affect the labor market opportunities of competing natives in the receiving countries, and often have a favorable impact on complementary workers. In short, refugee flows can have large distributional consequences.

Is Global Equality the Enemy of National Equality?

“…In a recent paper, he and Monras look at the wage effects of four distinct "refugee supply shocks:" the Cuban influx in Miami from the Mariel Harbor in 1980; the repatriation of French and Algerian nationals in France after the Algerian Independence War in 1962; Jewish immigration to Israel after the collapse of the Soviet Union in the early 1990s; and the refugee exodus from the former Yugoslavia during the Balkan wars between 1991 and 2001. In each case, he finds "exogenous supply shocks adversely affect the labor market opportunities of competing natives in the receiving countries," while often having "a favorable impact on complementary workers"(Borjas and Monras 2016).…”

Leaving, Staying or Coming Back? Migration Decisions During the Northern Mali Conflict

“…A different strand in the literature has looked at the impact of forced migration on host communities (Whitaker, 2002;Alix-Garcia and Saah, 2010;Baez, 2011;Alix-Garcia et al, 2012;Braun and Mahmoud, 2014;Maystadt and Verwimp, 2014;Calderón-Mejía and Ibáñez, 2015;Borjas and Monras, 2016;Figlio and Özek, 2017). There is also a fast growing literature on the ongoing European refugee crisis (Damm, 2009;Carrera et al, 2015;Fernández-Huertas Moraga and Rapoport, 2015;Gilbert, 2015;Bansak et al, 2016;Dustmann et al, 2016;Waisman and Larsen, 2016).…”

Understanding the Effects of Legalizing Undocumented Immigrants

“…Payroll taxes in Spain are around one-third of wages. Average wages before the policy change were around 20,000 Euros.9 We know the employment rates of native workers and immigrant workers prior to the policy change; however we cannot distinguish undocumented from documented workers among immigrants.10 This evidence is consistent with the heterogeneous effects of immigrant inflows on native employment outcomes estimated recently inBorjas and Monras (2017). See also the work byLlull (2017b) where heterogeneous effects across workers are reported.…”

“…SeeDolado et al (1996) andDomingo and Recaño (2005).6 We abstract in this paper from potential effects that amnesty programs may have on changing total immigration flows into a country. Some papers have analyzed this possibility using across US states variation in welfare programs, see for exampleBorjas (1999).7 For a news report on the policy see: elpais.com/elpais/2005/05/07/actualidad/1115453817_850215.html (Last visited in September 2017). The news from El Pais at the time had a special mention of the increase in work inspections.…”

“…This paper is obviously related to the wider literature that uses geographic variation to estimate the labor-market effects of immigrant inflows. SeeCard (1990),Altonji and Card (1991),Borjas et al (1997),Card (2005),Lewis (2012),Llull (2017a),Glitz (2012),Borjas and Monras (2017) andMonras (2015b).16 See the Real Decreto 864/2001.…”