This paper examines the impact of Syrian refugee inflows on housing expenditures and incomes in Jordan. The 2015 Jordanian Housing and Population Census identifies 1.3 million Syrian refugees in the country, of whom approximately 650,000 were registered as refugees. According to the 2015 census, 80 percent of Syrian refugees were living outside official refugee camps, in urban areas. On average, Syrian refugees are poorer, less educated, and more likely to work in the informal sector compared to Jordanian nationals and non-Jordanian residents.
Jordan was experiencing a housing shortage before the Syrian refugee crisis. The Syrian refugee influx immediately increased demand for housing by 86,000 units annually, on top of the pre-existing local demand of 32,000 units annually. Formal construction supply did not begin to increase until 2016.
Exploiting the fact that Syrian refugees in Jordan concentrate in regions closer to the three largest refugee camps, the authors compare Jordanian nationals living in areas closer and farther away from the three main refugee camps, before and after the onset of the Syrian civil war in 2011.
The analysis draws on multiple data sources including: (1) individual consumer expenditure and income by type from the Household Expenditure and Income Surveys; (2) individual-level panel data from the Jordan Labor Market Panel Survey; (3) children’s health development outcomes from the Demographic and Health Survey; (4) data on satellite night light density from the National Oceanic and Atmospheric Administration; (5) data on the location of refugee camps from UNHCR; and (6) data on Syrian settlements in Jordan before the civil war from the 2004 Housing and Population Census.
Main findings:
- Syrian refugee flows increased housing rental prices in Jordan. Housing rental prices increased closer to refugee camps after the onset of the Syrian civil war in 2011.
- Overall, Jordanians living closer to the refugee camps increased their housing expenditures. While overall, total consumption expenditure remained unchanged, Jordanians living closer to the refugee camps compensated for higher housing (and transport) costs by decreasing their spending on food, communication services, education, and health.
- Some segments of the population living near the refugee camps were adversely affected, including people with lower educational attainment, younger people, and people working in the informal sector. Total consumption expenditure fell for individuals with less than a high school education, with sharp reductions in their spending on non-food items, food, communication, and health. Higher expenditures on housing were accompanied by worse dwelling quality for individuals aged 26 to 40 and those working in the informal sector. The analysis also suggests that refugee exposure can have negative effects of on self-employment (across all education levels) consistent with the idea that refugees may be displacing workers in the informal sector.
- Jordanians located closer to refugee camps have higher property and rental income. The positive effect of refugee inflows on rental and property income are largely concentrated among individuals with higher education levels, who presumably correspond to property owners.
- There isn’t any evidence that changes in the pattern of consumption expenditure (away from non-durables and health care) has consequences for health or education, or children’s development outcomes.
The authors conclude that increases in housing expenditure was mainly driven by the spike in housing prices due to the sudden and increased demand for housing and the unresponsive supply of new housing. The authors recommend responding quickly to large sudden inflows of refugees by rapidly increasing the housing supply. In the absence of increased housing supply, both local populations and refugees may experience welfare losses due to increasing housing prices and reduced consumption, which may also contribute to increased tensions between refugees and host communities. The authors advocate for further research to examine the effectiveness of different approaches to increase the supply of quality housing for refugees, and the effect on prices of cash-for-rent grants to refugees and low-income Jordanians.