The Refugee Surge in Europe: Economic Challenges
Staff Discussion Notes, January 19, 2016
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Bibliographic details
- Authors: Shekhar Aiyar, Bergljot B Barkbu, Nicoletta Batini, Helge Berger, Enrica Detragiache, Allan Dizioli, Christian H Ebeke, Huidan Huidan Lin, Linda Kaltani, Sebastian Sosa, Antonio Spilimbergo, Petia Topalova
- Published: January 19, 2016
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781513552590.006
Summary of findings
- Europe faces an unprecedented surge in asylum applications against the background of political turmoil in the Middle-East.
- Short-run impact:
- Additional public expenditure will provide a small positive impact on GDP.
- This short-run impact is concentrated in the main destination countries of Germany, Sweden and Austria.
- Longer-term impact:
- The effect depends on the speed and success of integration of refugees in the labor market.
- An increase in the labor force can have a more lasting impact on growth and the public finances if integration is effective.
- Labor market concerns:
- While native workers often have legitimate concerns about the impact of immigrants on wages and employment, past experience indicates that any adverse effects are limited and temporary.
Policy recommendations
- Lower barriers to labor market entry for refugees, including:
- Wage subsidies to employers.
- Reducing legal barriers to labor market participation during the asylum process.
- Removing obstacles to entrepreneurship/self-employment.
- Providing job training and job search assistance.
- Providing language skills training.
Keywords and subject focus
- Subject: Education, Labor, Labor markets, Migration, Population and demographics
- Keywords: aggregate demand, asylum seeker, displaced people, entry wage, EU country, Euro Area, Europe, immigrant, labor force, Labor Market, labor market integration, Labor markets, Migration, pay, private sector, refugee, Refugees, SDN, subsidy program, unemployment rate, wage assimilation, wage gap, wage subsidy
Staff Discussion Note: "The Refugee Surge in Europe: Economic Challenges" — January 19, 2016.