The effect of Syrian refugee wave on the European labor market
Syria is a country in the Middle East, and the civil war between the ruling government of Syria and the rebels started in 2011. The war killed many Syrians, and many fled the country to escape violence. In addition to civil war, the militant group ISIS in Syria has done awful violence to men, women and children. According to the figures obtained in 2015, ~4 million Syrians have sought for refugee status with the United Nation, and ~ 9 million refugees have fled home in Syria since 2011 (Syrianrefugees.eu, 2016). Many OECD countries have scaled up their refugee intake and their refugee expenditure funds, as a response to the emergency need of providing asylum to Syrian refugees. European countries like Germany, Sweden, Austria and Turkey, have increased their public expenditure for the efforts to accommodate and integrate the new immigrants from Syria to the labor market. In 2016, Austria spent 0.3% of its GDP and Sweden spend 0.9% of its GDP for meeting the needs of the asylum seekers (Syrianrefugees.eu, 2016).
The host countries that provide asylum to Syrian refugees vary in their terms and conditions with regard to asylum seekers assessing their native labor market. While few countries provide free access to work, in others, work permits may be required and the refugees may have to file an application with the host government to grant them permission. According to the estimate from the European Economic Area and Switzerland; in 2016, there were 1 million entries from asylum seekers to the labor market (Oecd.org, 2016). This accounts for 0.4% of the total labor force in these countries (Oecd.org, 2016). The highest number of labor entries was in Germany and their number accounted for 1% of the total work force of Germany (Oecd.org, 2016). Thus the effect of integrating such large number of Syrian refugees will have a definite impact on the host country’s labor market.
The skills of these refugees will decide the rate of integration and the benefits this process will provide to the host. It is a challenging task to estimate the impact of Syrian refugees on the economic status of Europe, as the refugees are irregularly distributed in different countries and their duration of stay is also not certain. For accommodating asylum seeker, many European countries by an average spend from € 8000 to € 12,000 per asylum seeker per year, in terms of short term expenditure (Dumont, 2015). These expenditures may pay back well, if the newcomers are able to integrate effectively into the labor market and contribute positively to the host country’s welfare. The country may benefit more, if the refugees contribute in an area where labor or skill is most wanted. (Cully, 2012)
During the period when the asylum seekers are not grated assess to the labor market, their dependence on the host government for support is high, as they do not have sufficient wealth to meet their needs. Thus the expenditure of the host country on the Syrian refugees will be high if the country does not successfully integrate them into the labor market. Studies on the past trends of fiscal expenditures, show that there is an initial rise, but the expenditure eventually decreases with effective refugee integration. The money spends on training refugees in skill and integrating them in the labor market, will provide returns in the long run. (Dumont, 2015)
Jordan has been the largest receiver of Syrian refugees and they account for 10% of the country’s population. Turkey and Lebanon also have similarly high intake of Syrian refugees (Oecd.org, 2016). In 2014, Jordan spent 800 million dollars to provide for the basic needs of the refugee (Oecd.org, 2016). The war in Syria, had already affected the exports of its neighboring country; In spite of this, there was no appreciable increase in prices of commodities except for non-tradable resources. The quicker the integration of these refugees into the labor force, faster the expenditure on them will reduce.
There has been no decrease in the flow of Syrian refugee over the years. In 2015, 1.6 million asylum seekers’ application were registered with European countries (Dumont, 2015). Germany received the largest number of applications. The age of the refugees can also decide their participation in the labor force. Women and children under the age of 18 need to be supported, until they grow up to find a way into the labor market (Bloch, 2004). As many refugees tend to stay with the host for long, the rate and success of integrating them in the labor force will prove advantageous. However, in countries where there is already a high level of unemployment, the refugee inflow will only add to the national burden. Hence, it is necessary to direct the inflow to regions where there is a labor demand.
Countries that already have sufficient skilled citizens to fill up the existing jobs, there is a need to create new jobs for the incoming refugees and this process takes time and investments (Unhcr.org, 2016). Providing employment and livelihood to people who are depend on the host country is important for maintaining peace and social unity. The labor laws in many developed European countries, demand safe and decent working environment for the laborers and has strict laws that protect labor rights. While in other developing countries, the unemployment levels are high and living standards are already very poor, the refugee influx can worsen the situation. The refugees are often put into low quality labor and are provided low wages. Unless the workers are integrated in formal work settings, it will be difficult to monitor their welfare and wages. Intake of refugees into the labor market will reduce the overall wages and this can displease the native citizens (Price, 2016). Low wages can intensify the level of poverty in these countries (Price, 2016). While men can travel long distance seeking refuge, most women and children choose to stay to the closest place that provides immediate refuge. The favorable labor market in Germany has attracted Syrian men, who first seek asylum alone and then bring in their spouse and children once they find a job that will sustain them. Countries like Turkey, due to the high influx of immigrants and their preexisting dire economic state are most affected by the Syrian refugees. To avoid this, OECD, has recommended a Europe wide distribution mechanism that will help to effectively distribute and assimilate these refugees without affecting the host socioeconomic conditions.
In September 2015, many countries in central and western Europe, stated their decision on refusing to accept Syrian refugees (Frej, 2015). The anti-immigration stance of these countries are largely based on the rise of insecure feeling among their citizens (Frej, 2015). Syrian refugee immigration could increase the population of Europe, weaken their security system and increase unemployment rates. The refugees are feared to disturb the peaceful existence of the European society. The recent violent events across the world, for not so clear reasons, have been wrongly linked to the rise of Syrian Muslim population in the Western and Central Europe. In fact, this violence was not caused by the refugees. In addition, the countries also treat refugees as a financial burden. Learning a new language, providing training and welfare benefits to the refugees, will not pay back well, if they do not contribute to the labor market. Though this decision was severely criticized by the President of European Commission, Jean-Claude Juncker, these nations refused to change their decision (Frej, 2015). Sweden, Malta and Switzerland are the top three European countries that receive the maximum number of Syrian refugees (Syrianrefugees.eu, 2016). Germany has decided to widen its door for refugees in the coming years. (Frej, 2015)
It is very difficult to predict the impact of Syrian refugees on labor market and economy. The number of refugees, their nature and their pattern of intake, will decide the loss and benefit to the host countries. While skilled refugees can help fill the demands of the exiting labor market in the country, unskilled refugees, children and women do not contribute much and the initial expenditure on them will be high. If these refugees chose to leave the country after a certain period, the money spend in providing training may not benefit the host country. Economic theories cannot predict the advantages and disadvantages of refugee immigration to the country’s labor market. While some studies indicate a small negative effect on wages and employment of natives with immigration, another reports a slight positive effect on wages and employment (Cully, 2012). There is no systematic study that investigates the effect of Syrian refugees on labor market. Thus, it is very difficult to make a confident prediction about the effect on the labor market. Just like the way people are entering Europe as immigrants and asylum seekers, people are also migrating away from Europe to other countries. The movement in both directions can affect the labor market. Above all, the prevalence of favorable conditions in the receiving country will determine the ultimate effect of Syrian refugee immigration on the labor market. (Brown et al., 2016)
A survey conducted in three refugee groups: ex-Yugoslavs, black Africans and people of the Middle East; suggests that they are concentrated in labor market niches like: cleaning services, care of aged, meat processing, taxi driving, security and building. These employment niches constitute the secondary labor market and are avoided by the locals, as it pays less and are considered low status jobs (Colic-Peisker, 2006). Other factors like racial discrimination, not recognizing qualification across the borders and culture incompatibility, were also found to deter refugees from finding suitable employment. Similar insights were also obtained from surveys conducted in Boshan and Afghan refugees in Australia (Colic-Peisker, 2006). A similar situation probably exists with Syrian refugees as well. As of now, no published survey is available to identify the popular job niches in this group.
Before the outbreak of civil war in 2011, the Syrian government has invested a substantial amount of money in improving education and educational system. The literary rate in Syria is high, and students are trained in vocational courses right from high school. Syria has ~ 30 universities that offer higher qualification and degrees (OpenLearn, 2016). Refugees who were in high status jobs like managerial post in their native land, stoop down to do low status jobs in the host country. Despite higher educational qualifications, they fail to find suitable jobs in the country that provides asylum. While economic migrants are screened to check their suitability for jobs in host countries, no such process is in effect for the refugees.
As capitalism advances, so is the expansion of the world labor market (Price, 2016). The international labor market has always wanted to integrate people from different countries (Price, 2016). Though many Asian and Arab countries have extreme labor demands, refugees prefer western and developed countries as they provide better living conditions. Unlike the East, labor laws and human rights protection are taken seriously in the western world.
Though immigrants are classified as a different social class from the refugees, the migration pattern of both these groups are similar. They choose countries which provide better job opportunities and living conditions. In both cases, most of them choose host countries in which they have relatives. However, the social identity of the immigrants and the refugee in the host country is different. Social networks in the host country can improve labor market outcomes for the refugees. Refugees who come to U.K have low levels of intake in the labor market. Though some may be employed in the secondary labor market, they have very little scope for progression.
Conclusion: Job is an important part of integrating Syrian refugee into the mainstream community of the host. Lower the employment rates among the refugees, greater will be the dependence on the host country to provide for their needs. A structured research will be required for obtaining a better understanding of the impact of Syrian refugees on the labor market.
References
Bloch, A. (2004). Refugee Women and Employment: Barriers to Integration.
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Colic-Peisker, V. (2006). Employment Niches for Recent Refugees: Segmented Labour Market in Twenty-first Century Australia. Journal of Refugee Studies, 19(2), pp.203-229.
Cully, M. (2012). More than additions to population: the economic and fiscal impact of immigration. Australian Economic Review, 45(3), pp.10-15.
Dumont, J. (2015). How will the refugee surge affect the European economy?. OECD Migration Policy Debates, November(8), pp.1-10.
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