The Labor Market Effects of Restricting Refugees’ Employment Opportunities

Author(s) : Achim Ahrens, Andreas Beerli, Dominik Hangartner, Selina Kurer, Michael Siegenthaler

Source : https://conference.iza.org/conference_files/LaborMarkets_2022/siegenthaler_m8734.pdf

Source (2023) : http://dx.doi.org/10.2139/ssrn.4340083

“In many countries, newly arrived immigrants are not allowed to work for all firms in the labor market. Sometimes, they are not allowed to work at all. We argue that such restrictions on employment opportunities help explain why immigrants have lower employment rates and wages than similar native citizens. This paper explores this hypothesis in the context of refugee integration in Switzerland. We leverage the exogenous geographic assignment of refugees upon arrival, substantial over-time variation in labor market restrictions in Swiss cantons 1999-2016, and linked asylum process and employer-employee data. We document large negative employment and earnings effects of banning refugees from working in the first months after arrival, of prioritizing residents over refugees, and of restricting refugees’ labor markets geographically and sectorally.“

Keywords: Labor market integration, migration, labor market policies, labor market institutions, monopsony, refugees, employment, wages