The (Struggle for) Labour Market Integration of Refugees: Evidence from European Countries

This paper studies the labour market performance of refugees vis-à -vis comparable migrants across several EU countries and over time. We use recently released repeated cross–sectional survey data and find that refugees are 13% less likely to have a job and 32% more likely to be unemployed than migrants with similar characteristics. Their performance is relatively weaker also when analysing participation in the labour market, quality of occupation and income. Between 60 and 80% of the “refugee gap†remains unexplained even when conditioning on unobservable factors by means of a rich set of fixed effects for areas of origin, entry cohorts, destination countries as well as their interactions. These gaps are larger for the areas of origin from which most refugees currently arrive and they persist until about ten years after immigration. We also assess the role played by asylum policies. First, we exploit the differential timing of the enactment of dispersal policies across European countries in a difference–in–differences setup and find that refugee cohorts exposed to these polices have persistently worse labour market outcomes. Second, we document how entry cohorts admitted when refugee status’ recognition rates were relatively high integrate better in the host country labour market.