This paper estimates the impact of refugee policies on labor and education outcomes in developing countries that host refugees.
The analysis is based on two main data sources. The first is the Developing World Refugee and Asylum Policy (DWRAP) Dataset, which includes national laws related to refugees and asylum seekers in 136 African, Middle Eastern, South Asian, and Latin American countries from 1951 to 2017. The dataset categorizes refugee and asylum policy into five domains and further breaks them down into 14 policy strands.
The second source of data is harmonized survey data from 10 countries across five regions that hosted refugees between 2015 and 2020. The countries included in the analysis are Lebanon, Jordan, the Kurdistan Region of Iraq, Chad, Niger, Uganda, Ethiopia, Peru, and Ecuador. The surveys collected information from 177,261 individuals in 35,711 households, with 66,212 of them being refugees. The outcomes of interest in the dataset include labor force participation and employment for working-age individuals, as well as school attendance and education outcomes for school-age children.
The data reveals that:
- There is significant variation in refugee policy and outcomes across different countries and contexts. Uganda and Ecuador are quite liberal along all policy dimensions, while Peru and Ethiopia are also relatively liberal but less so in the livelihoods domain. Niger, despite being less liberal overall, has relatively liberal policies for services and On the other hand, Jordan, Lebanon, and Chad are relatively illiberal in their policies.
- Employment rates for refugees vary markedly across countries and contexts, and these differences are not just driven by differences in employment rates among locals.
- Female refugees generally have lower employment rates compared to male refugees in all countries, but the gender gap is particularly pronounced in Iraq, Jordan, and Lebanon.
- In the Middle Eastern countries and in Niger, non-refugees tend to have better literacy rates and school attendance compared to refugees. However, in other countries, there is no significant difference between refugees and non-refugees in terms of literacy and school attendance.
Main empirical findings:
- The employment rate of refugees relative to locals is higher in countries where policies are more liberal, compared to other countries in the same region. For example, Uganda, with a DWRAP policy score of 0.51, has a higher likelihood of employment by about 4.5 percentage points compared to Ethiopia, which has a policy score of 0.33.
- Freedom of movement is a more important driver of better employment outcomes than policies directly capturing the right to work.
- The positive association between policy liberality and employment is mostly driven by female refugees. A 0.18 difference in the overall policy score between Uganda and Ethiopia would result in a 10-percentage point increase in the employment rate for female refugees, while there would be no increase for men.
- The liberality of education policy predicts a positive likelihood that refugee children are currently in school and whether they can read and write. For example, the 28-point difference between the education score of Uganda (0.5) and Ethiopia (0.22) would be associated with almost a three-percentage point increase in the likelihood of being in school and being able to write.
The authors conclude that refugees in countries with more liberal policies have better socioeconomic outcomes. The study finds that de jure access to the labor market and free movement are positively related to employment. Additionally, refugee children in countries with more generous educational rights for refugees are more likely to be in school. The positive relationship between liberal policy and employment outcomes is particularly pronounced for women, likely due to their weaker attachment to the labor market and greater labor supply elasticity.