The Impact of Refugees on Employment and Wages in Jordan

Belal Fallah, Caroline Krafft, Jackline Wahba

Journal of Development Economics, Volume 139 (2019), Pages 203–216


According to the 2015 Population Census in Jordan, 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 were allowed work permits in certain sectors, such as agriculture, construction, food, and manufacturing; these sectors disproportionately employed migrant labor even prior to the refugee influx. This paper investigates the short-term impacts of the Syrian refugee influx on labor market outcomes for Jordanian citizens. The authors make use of Jordan Labor Market Panel Survey data from before (2010) and after (2016) the Syrian refugee influx, combined with information on where the refugee influx was concentrated.


Key findings:

  • From 2010 to 2016, the number of working-age Syrians rose from 19,000 to 644,000. Although the Syrian working age population was about 16 percent the size of the Jordanian population in 2016, the Syrian labor force was equivalent to about 9 percent of the Jordanian labor force. There were 1.3 million employed Jordanians in 2016 compared to 117,000 employed Syrians.
  • Overall, Jordanians living in areas with high concentrations of refugees have had no worse labor market outcomes than Jordanians with less exposure to the refugee influx. This result hold across unemployment, employment, characteristics of employment (formality, occupation, open sector, health and human services sector, private sector), hours, and wages.
  • Overall, 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 a 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 have decreased (insignificantly), the effect on month 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 author posit that several channels that may have ameliorated any potentially negative impact of the massive influx of Syrian refugees including: (a) the composition and characteristics of Syrian refugees in Jordan (predominantly young and with a higher proportion of female-headed households) means that their labor force participation is low (only 45 percent of men and 4 percent of women are in the labor force); (b) the take-up of work permits by Syrians has been low (by the end of 2017 only 87,141 work permits to Syrians were issued out of 200,000 available permits) and therefore few Syrians are competing in the formal labor market; (c) the number of non-Syrian immigrants in Jordan has not decreased in the same period, and Syrians mainly compete with economic immigrants in the informal sector; (d) the inflow of foreign aid may have created labor demand among Jordanians; and (e) the increase in demand for public services, in particular education and health, has resulted in the Jordanian government increasing the provision of those services, which in turn increased the demand for workers (almost exclusively Jordanians) in those sectors. The results suggest that allowing refugees to work legally, and complementing legal work opportunities for refugees with aid and trade opportunities may yield offsetting effects for natives’ labor market outcomes.