Why provide refugees access to the workplace?

 

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Refugees can contribute economically in many ways: as workers of all skill levels, entrepreneurs, innovators, taxpayers, consumers and investors. Their efforts can help create jobs, raise the productivity and wages of local workers, lift capital returns, stimulate international trade and investment, and boost innovation, enterprise and growth. From a global perspective, enabling people to move to more technologically advanced, politically stable and secure countries boosts their economic opportunities and world output. Welcoming refugees generally requires an initial investment, typically of public funds. In economies where demand is depressed, this increased investment yields an immediate demand dividend.

The IMF estimated that additional spending in the EU on refugees of 0.09% of gross domestic product (GDP) in 2015 and 0.11% in 2016, could have risen its GDP by 0.13% by 2017. Add in the boost to the economy from refugees working, and GDP could be 0.23% higher by 2020: A total increase of 0.84% of GDP between 2015 and 2020. Once refugees start working, this investment may yield seven additional dividends. Refugees often do jobs that locals spurn, such as cleaning offices and caring for the elderly, which is the fastest area of employment growth in advanced economies. Higher-skilled refugees (and refugees’ highly skilled children) can provide a deftness dividend.

Refugees, who on average tend to be in their early twenties, can also provide a demographic dividend. Ageing societies with a shrinking native working age population, benefit from the arrival of younger refugees whose skills complement those of older, more experienced workers. Refugees can also help care and pay for the swelling ranks of pensioners. And they support population numbers, and thus investment and growth.

Refugees can also provide a debt dividend. Studies by the Organization for Economic Co-operation and Development (OECD) show that migrants in general tend to be net contributors to public finances; in Australia refugees become so after 12 years. Better still, the taxes that refugees pay can help service and repay the huge public debts that have been incurred in many countries to provide benefits for the existing populations.

Last but not least, refugees provide a development dividend – to themselves, their children and their country of origin. Remittances to Liberia, a big refugee-sending country, amount to 18.5% of its GDP.

Their different and complementary skills can fill gaps in the labor market and enhance locals’ productivity. A third of recent refugees in Sweden are college or university graduates and two-thirds of those have skills that match graduate job vacancies.

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