Refugees add to the labor supply by half, increasing the productivity of land and reducing that of labor. Suppose all goods are produced using land and labor (Table 1). This point is best made by using a simple example. The gains of the winners often exceed the losses of the losers. Instead, they displaced the migrant workers from Egypt.Ĥ. Syrian refugees did not have a significant impact on the Jordanian labor force. In Jordan, the labor market is segmented between Jordanians who work in the public sector and in high-skill occupations and foreigners who concentrated in agriculture, construction, and basic services. In contrast, they increased cattle prices sharply in a market that is tightly controlled by the local tribes. In Kenya, refugees did not affect corn prices, as the corn was imported. Gains and losses are also influenced by the host economy institutions. Source: The Economics of Hosting Refugees: A Host Community Perspective from Turkana.ģ. How do refugees affect the host country’s economy? Overall, winners and losers are determined by people’s net consumption and income patterns. Similarly, with more workers in the labor market, wages can decrease, helping employers and hurting employees. This makes landlords happy and tenants unhappy. Other things being equal, when refugee arrivals boost demand, the price of non-tradable goods and services like residential rents can increase (Figure 1). The problem with the GDP effect of refugees is that not everybody benefits from it. Refugee arrivals create both winners and losers. Refugee arrivals, which increased domestic consumption and labor supply, increased their GDPs by 0.9 percentage points, annually.Ģ. For example, the conflict in Syria has reduced the GDP growth in Lebanon and Jordan by 1.7 and 1.6 percentage points per year, mainly through collapsing exports in tourism and financial services. But conflict also affects these countries through other channels like trade, investments, and broader regional instability. Most refugees flee locally to neighboring countries, where they are sometimes blamed for the entire economic fallout of the conflict. ![]() Refugees are not the only effect of conflict on neighboring countries.
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