Over 2.5 million Syrian refugees arrived in Turkey between 2012 and 2015, the majority settling in regions bordering Syria. Most Syrian refugees lack a high school degree and do not speak Turkish. Few Syrian refugees have work permits, but they can and do work in the informal sector, where they compete with low-skilled Turkish workers.
This paper examines the effect of Syrian refugees on labor market outcomes for native workers in Turkey. In addition to the supply-side shock in the labor market, the authors investigate demand-side channels that might enable local economies to fully or partially absorb the labor supply shock, including: (a) native-migrant labor complementarity; (b) increased housing demand; and (c) increased entrepreneurial activities of Syrians and non-Syrians in host regions.
Using geographic variation in refugee settlement patterns, the authors compare labor market outcomes in host and non-host regions before and after the arrival of Syrian refugees. Their analysis draws on employment and wage data from the TurkStat Household Labor Force Survey (2004–2015), refugee counts from the Ministry of Interior, residential building permit data from TurkStat, and new firm establishment data from the Union of Chambers and Commodity Exchanges of Turkey.
Main results:
- Inflows of Syrian refugees did not significantly affect the employment or wages of Turkish workers at the same skill level. For natives with less than a high school diploma, wage and employment changes were statistically negligible.
- Wages for relatively higher-skilled native workers increased following Syrian migration, suggesting a complementarity effect.
- The entry of Syrian refugees into the informal labor market prompted low-skilled native workers to move into formal jobs. The share of formally employed natives with less than a high school diploma rose rapidly after 2013, with 2.5 percentage points more natives earning at or above the minimum wage compared to a no-migration scenario.
- Syrian migrants and high-skilled native workers are complementary, but migration had little effect on very high-skilled workers. The share of workers earning upper-middle incomes (at or above 200 percent and 250 percent of the minimum wage) increased by more than 2 percentage points, while very high-wage workers saw almost no change.
- Syrian refugee inflows had a substantial positive impact on residential construction, with building permits increasing by more than 34 percent.
- The number of new firms with at least one Syrian cofounder rose sharply between 2010 and 2015, from less than 2.3 percent to over 31.9 percent of new firms. Even excluding Syrian-founded firms, there was a notable 10 percent increase in new businesses, indicating that non-Syrian entrepreneurs also benefited from the migration.
Overall, the authors conclude that Syrian refugees have had positive effects on native workers. Lower-skilled natives experienced negligible losses, while higher-skilled workers benefited. Demand-side channels—labor complementarity, increased housing demand, and entrepreneurial activity—played a crucial role in mitigating any adverse effects from the labor supply shock.