The economic effect of the 2015 Refugee Crisis in Sweden: Jobs, Crimes, Prices and Voter turnout

The civil war in Syria has culminated in a massive refugee crisis in neighboring and European countries. Millions of refugees made their way to Europe between 2014 and 2015, with more than 160 000 arriving in Sweden alone. Little is known about the impact of this influx on voting behavior, criminality rates, labor markets, and local price levels. By using data on the Swedish municipalities, the analysis estimates the short-run consequences of the refugee inflow. The results are found through a dynamic difference-in-difference estimator, which compare municipalities in Sweden who received relatively many refugees (treated) compared to those hosting relatively few refugees (control). The quasi-randomized allocation process of refugees in combination with a very high variation among the different municipalities refugee-intake creates stable conditions for reliable estimations through the difference-indifference approach. Regarding the labor market, the findings suggest that the treated groups hosting many refugees face higher unemployment rates and simultaneously lower wage levels. Additionally, the result indicates that the municipalities hosting more refugees face higher crimes committed per capita, particularly regarding assault- and fraud-related crimes. Furthermore, the results stress that the treated group meet higher vote shares in the subsequent national election in favor of the right-wing parties and decreasing support for the center-right, center-left, and left-wing parties. Surprisingly, the vote share of the antiimmigration party SD does not correlate with refugee-influx.