The Labour Market Impacts of Forced Migration (LAMFOR)

June 2013 – December 2015

Overview Theory Methods Partners Outputs News & Media

Overview

This research project, conducted in partnership with Maastricht University, provides unique statistical evidence on the labour market implications of forced migration situations. The project explores two different case studies in the African Great Lakes Region: forced migration in and from Burundi (main component of the project) and forced migration to Tanzania. Burundi experienced a major conflict during 1993-2005. The conflict resulted in an over 1 million forcibly displaced, mainly to neighbouring Tanzania. Over 700,000 refugees have returned to Burundi from Tanzania during the last decade.

Labour markets have important implications for long-term development after an episode of forced migration in low-income countries. Adequate work opportunities provide individuals with income, self-worth and reduce social isolation. As such, labour market impacts should be one of the main considerations of international organisations and national governments when dealing with a forced migration crisis and developing policies to respond to such crises. There has, however, been little analysis of the implications of forced migration on labour markets. Providing statistical evidence on the labour market implications of forced migration situations not only helps correct this discrepancy, but also has important consequences for humanitarian and developmental policy and programme design.

Principal Investigator

Carlos Vargas-Silva

Researchers

Sonja Fransen (Maastricht University/UNU-Merit), Isabel Ruiz (Harris Manchester College, Oxford), Melissa Siegel (Maastricht University/UNU-Merit)

Funding

UK Department for International Development (DIFD), Institute for the Study of Labour (IZA), Germany

Refugee return and the gains from international experience: In the ‘voluntary’ migration context, the factors that encourage emigrants to go back home include a higher return in the home location to skills acquired in the host location. Examples of these skills include a new language, working ethics, new production techniques, new ideas and entrepreneurial knowledge. Differences in prices may also play a role, and the emigrant may postpone durable consumption in the host country and later return home to take advantage of lower prices. In the forced migration context emigrants often only have a few destinations available (i.e. often they have to walk to the destination), which means that the earnings gap between the home and host location might not be very big.

Other factors, such as security levels, are likely to play a major role. If security levels in the host location are higher than at home, it means that emigration could take place even if the earnings gap is negative at all times and with no differences in skill acquisition possibilities between the home and host location. However, there could still be a gain from international experience. While the economic opportunities of refugees are sometimes limited compared to those of ‘voluntary’ migrants, the evidence suggests that refugees are still engaged in multiple economic activities both at refugee camps and in urban settings. Moreover, in many cases refugees have greater access to humanitarian assistance and education than those back home.

The decision to return is also likely to be affected by different factors in the forced migration context. A decrease in the level of violence back home is likely to be the key determinant of voluntary returns but in many cases return is involuntary. This contrasts with the case in which returnees are taking advantage of differences in prices or returns to skills between the home and host country. The project explores how all these factors affect the returns to international experience in the case of refugees.

Impact on the host labour markets: The degree to which refugees affect the labour market outcomes of the host country natives depends on the degree of substitutability between refugees and natives. A significant degree of substitutability could be expected in the case of the Great Lakes region. Individuals in Burundi and Tanzania rely heavily on agricultural work for subsistence; the two countries have low average educational levels and there is a language overlap between the two countries. These similarities suggest that refugees could in fact have an important impact on the Tanzanian labour market. Refugees are also in a more desperate situation, and the evidence suggests that low-skilled refugees were willing to accept a lower wage than low-skilled Tanzanian workers in order to do similar work. As such, we could expect Tanzanians to either move out or be displaced of those activities that could easily be done by refugees. In particular, given the importance of agricultural work for the region, we would expect refugees to engage in agricultural work as employees and for Tanzanians to move to other activities that require more idiosyncratic and culture specific knowledge. The project explores the multiple impacts of refugees on the Tanzanian labour market.