Labor market effects of a work-first policy for refugees
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Labor market effects of a work-first policy for refugees Jacob Nielsen Arendt 1 Received: 11 February 2020 / Accepted: 5 October 2020/ # The Author(s) 2020
Abstract This study estimates the labor market effects of a work-first policy aimed at speeding up the labor market integration of refugees. The policy added new requirements for refugees to actively search for jobs and to participate in on-the-job training immediately upon arrival in the host country, Denmark. The requirements were added to an existing policy that emphasizes human capital investments in language training. The results show that the work-first policy speeded up entry into regular jobs for men, but they find work in precarious jobs with few hours. Long-run effects are uncertain since the policy crowds out language investments but raises enrollment in education. The policy had no or very small effects for women, which is partly explained by a lower treatment intensity for women. Keywords Refugee . Unemployment . Work-first . Employment support JEL classification J61 . J64 . J68
1 Introduction The large inflow of refugee immigrants that occurred in Europe in 2015 and 2016 emphasized the political and economic challenges that most Western countries face from humanitarian immigration (Zimmerman 2017).1 One significant economic 1
The term refugee immigrant covers asylum seekers who have been granted a residence permit either (1) in accordance with the RefugeeConvention, or (2) because of resettlement through the United Nations High Commissioner for Refugees (UNHCR) resettlement program. I use the term here more broadly for short by also including immigrants who are provided subsidiary protection, and immigrants who are reunified with a family member with one of the three previously mentioned terms of protection. See Constant and Zimmermann (2016) for a discussion of the need for European countries to adjust their asylum policies to accommodate recent challenges. Responsible editor: Klaus F. Zimmermann
* Jacob Nielsen Arendt [email protected]
1
The ROCKWOOL Foundation Research Unit, Ny Kongensgade 6, 1472 Copenhagen K, Denmark
J. N. Arendt
challenge originates from the low employment rate of refugees, even after they have lived for several years in the host country (Bevelander 2016; Bakker et al. 2017; Schultz-Nielsen 2017; Bratsberg et al. 2017; Aaslund et al. 2017; Dustmann et al. 2017; Fasani et al. 2017). The lack of labor market integration clearly constitutes a problem in its own right because of the substantial fiscal costs it generates, but the costs are likely much bigger and broader than the direct fiscal costs (Danzer 2011). For instance, lower levels of economic resources have been shown to increase the level of crime committed by refugees and to reduce schooling outcomes of their children (Andersen et al. 2019; Arendt 2020). Post-displacement living conditions are also correlated with mental health and social participation (Porter and Haslam 2005; Hynie 2018; Laurentsyeva and Venturini 2017). Even though the broader consequen
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