This paper investigates the short-term impacts of the Syrian refugee influx on labor market outcomes in Jordan. According to the 2015 Population Census, there were 1.3 million Syrians living in Jordan, compared to a population of 6.6 million Jordanian citizens. Until 2016, Syrians were not officially permitted to work, although many found employment in the informal sector. Since 2016, Syrian refugees have been allowed to obtain work permits in specific sectors such as agriculture, construction, food, and manufacturing, which had disproportionately employed migrant labor even prior to the refugee influx.
The analysis leverages the variation in the share of Syrians by locality to identify the impact of refugee exposure using a difference-in-difference framework. It utilizes data from the Jordan Labor Market Panel Survey (JLMPS) to capture labor market outcomes before (2010) and after (2016) the Syrian influx. The survey provides nationally representative panel data, encompassing a wide range of labor market outcomes such as employment, unemployment, hours of work, wages, and employment characteristics. Additionally, the authors incorporate data from the 2015 census on the number of Syrian households in each locality to measure the intensity of the refugee influx.
The data reveals that from 2010 to 2016, the number of working-age Syrians in Jordan increased from 19,000 to 644,000. Although the Syrian working-age population constituted about 16 percent of the Jordanian population in 2016, the Syrian labor force was only about 9 percent of the Jordanian labor force, with 143,000 employed Syrians compared to 1.6 million employed Jordanians.
Key empirical results:
- Jordanians living in areas with high concentrations of refugees have not experienced worse labor market outcomes compared to Jordanians with less exposure to the refugee influx. This result holds across various measures, including unemployment, employment, characteristics of employment (formality, occupation, open sector, health and human services sector, private sector), hours worked, and wages.
- Jordanian workers in areas with high concentrations of refugees experienced a significant increase in job formality, an increase in hourly (but not monthly) wages, and a shift in employment from the private to the public sector. For each percentage point increase in the share of the locality that is Syrian, the probability of formal employment increases by 0.3 percentage points, and hourly wages increase by 0.9 percent. However, because hours worked have decreased (insignificantly), the effect on monthly wages is insignificant. Additionally, Jordanian workers exposed to a greater refugee influx are less likely to work in the private sector and more likely to work in the public sector.
The influx of Syrian refugees into Jordan between 2010 and 2016 did not have a significant negative impact on the labor market outcomes for Jordanians. Various factors contributed to this outcome, including the low labor force participation of Syrian refugees, the limited uptake of work permits, competition primarily with economic migrants in the informal sector, and the positive effects of foreign aid and increased public service demand. These findings suggest that with appropriate policies, such as legal work opportunities for refugees combined with aid and trade initiatives, the potential negative impacts on the host country’s labor market can be mitigated.