Considering the benefits of hosting refugees: evidence of refugee camps influencing local labour market activity and economic welfare in Rwanda

Craig Loschmann, Özge Bilgili and Melissa Siegel

IZA Journal of Development and Migration, Volume 9, Issue 5 (2020)


Rwanda hosts more than 80,000 refugees from the Democratic Republic of Congo (DRC), the majority in situations of protracted displacement (UNHCR, 2018). This article examines the impact of Congolese refugee camps on host communities in Rwanda with a focus on labor market activity and economic welfare. The analysis exploits 2016 household survey data from three Congolese refugee camps and their surrounding areas. The authors study host communities at various distances from the refugee camps, and consequently with varying levels of exposure to the refugees.

Key findings:

  • On average, Rwandans living closer to a refugee camp (within 10 km) are significantly more likely to be engaged in wage employment compared with subsistence farming or
    livestock production. This suggests an overall adjustment within the local labor market, with Rwandans shifting away from subsistence agricultural activities in the presence of the refugee population, possibly due to greater non-farm business opportunities and/or the ability to hire low-skilled labor to perform subsistence
    agricultural work.
  •  Females living in proximity to a camp have a higher likelihood of self-employment in business both as a primary and secondary activity. This result suggests that in the long-term, local population dynamics may influence gender roles due to the inclusion of women in the labor market.
  • Living in close proximity to a camp is associated with greater household asset ownership on average, benefiting both male- and female-headed households similarly.
  • There is no indication that proximity to a camp influences subjective perceptions of the household’s economic situation.

The authors conclude that the presence of refugees benefited host communities in Rwanda. Even in cases where they do not find a clear positive influence of living near a refugee camp, they do not find any clear negative consequence either. They posit that the integrative approach of the Rwandan government with regard to refugee settlement and the absence of  forced boundaries between refugees and the local community have led to a more unified labor market.