Working Paper: NBER ID: w30534
Authors: Mette Foged; Line Hasager; Giovanni Peri
Abstract: This paper estimates, within a common framework, the effects of four types of integration polices on the employment probability and earnings of refugees in Denmark during the last three decades. We first review the studies that use a credible identification strategy to evaluate the causal effects of these types of policies on the assimilation of refugees in developed countries. We then describe the dynamics of labor market outcomes of several cohorts of refugees in Denmark. To our knowledge, Denmark is the only country where the number and design of policy changes and the longitudinal individual data availability make such an analysis possible. Our analysis suggests that improved language training, combined with initial placement of refugees in strong labor markets, significantly improved their long-run labor market outcomes. On the contrary, cutting initial welfare payments and housing them near other refugees does not seem to improve their long-run outcomes. Active labor market policies focused on matching refugees with simple jobs in high demand occupations may have positive short-run effects, but we cannot yet assess their long-run effects.
Keywords: refugees; labor market integration; integration policies; Denmark
JEL Codes: J15; J61; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improved language training combined with initial placement in strong labor markets (J24) | Long-term employment outcomes (J68) |
| Introduction of language training policy in 1999 (M53) | Employment probability (J63) |
| Introduction of language training policy in 1999 (M53) | Yearly earnings (J31) |
| Placing refugees in areas with high employment rates for similar immigrants (J68) | Long-run employment (J63) |
| Placing refugees in areas with high employment rates for similar immigrants (J68) | Yearly income (J31) |
| Active labor market policies targeting job matching (J68) | Short-run benefits (J32) |
| Cutting initial cash transfers or placing refugees near large coethnic networks (F35) | Long-run employment or earnings (J39) |