(The Struggle for) Refugee integration into the labour market: evidence from Europe

Abstract

We study the labour market performance of refugees vis-à-vis comparable migrants across 20 European countries and over time. In the first part of our analysis, we document that labour market outcomes for refugees are consistently worse than those for other migrants. Refugees are 11.6% less likely to have a job and 22% more likely to be unemployed than other migrants with similar characteristics. Their income, occupational quality and labour market participation are also relatively weaker. These gaps are larger relative to economic than non-economic migrants, and persist until about 10–15 years after immigration. In the second part of our analysis, we investigate the role of economic conditions and migration and asylum policy regimes at the time of arrival in shaping integration paths of refugees. First, we find that immigrating in a recession produces scarring effects for all migrants but no differential effect for forced migrants, leaving little role for this channel to explain observed refugee gaps. Secondly, we focus on the impact on refugees of being subject to spatial dispersal policies. Our estimates imply that dispersed refugees experience a persistent impact on their residential choices and substantial long run losses in their economic integration with respect to non-dispersed refugees.

Labor market situation of refugees in Europe: The role of individual and contextual factors

“…Empirical studies on the labor market situation of refugees have shown that refugees are generally disadvantaged compared to other migrants in Western destination countries (DeVoretz et al, 2004;Bevelander, 2011;Brücker et al, 2019;Brell et al, 2020;Fasani et al, 2022). Overall, their employment rates are far below those of other foreign population groups and even further below those of the native-born population of the respective host countries (Dustmann et al, 2017;Brell et al, 2020).…”

Refugee Migration and the Labor Market: Lessons from 40 Years of Post-Arrival Policies in Denmark

“…Dispersal policies, by depriving individuals from the possibility to migrate to areas with better economic conditions, may therefore lead to worse outcomes overall. Edin et al (2004) and Fasani et al (2021b) come to that same conclusion by using country variation in changes in dispersal policies, focusing on employment rates. Fasani et al (2021b) investigate dispersal policies where refugees were either allocated according to population size (as in Denmark, the Netherlands and Norway), or according to other non-employment criteria such as social housing opportunities (as in Sweden or the UK).…”

“…Edin et al (2004) and Fasani et al (2021b) come to that same conclusion by using country variation in changes in dispersal policies, focusing on employment rates. Fasani et al (2021b) investigate dispersal policies where refugees were either allocated according to population size (as in Denmark, the Netherlands and Norway), or according to other non-employment criteria such as social housing opportunities (as in Sweden or the UK). They conclude that dispersal policies or -even worse -policies that allocate refugees according to cost saving considerations (often to deprived areas with low cost housing) denies refugees of opportunity, reducing their employment rate and increasing their welfare dependence.…”

“…These findings suggest that quasi-random dispersal may however induce inefficiencies, by preventing refugees to settle in areas where their skills are most employable and obtain the highest reward. Indeed, Edin, Fredriksson and Åslund (2004) and Fasani, Frattini and Minale (2021b) conclude that quasi-random allocation stifles employment opportunities. Even worse, policies that allocate according to cheap housingoften correlated with local disadvantage -my lead to long term disadvantage of refugees.…”

Firing discrimination: Selective labor market responses of firms during the COVID-19 economic crisis

“…On the one hand, a more homogeneous sample in terms of language skills adds additional robustness to the findings with regard to German-speaking migrants. Because language ability is a key human capital component and main determinant for migrants’ labor market participation [ 76 , 105 ], it is therefore an important element of individual productivity, too, especially in occupations that involve teamwork or customer contact (which is not captured in this questionnaire). A sample with substantial differences in the respondents’ language skills would therefore make the distinction between objective, productivity-related firing grounds and discrimination more difficult.…”