Does perceived labor market competition increase prejudice between refugees and their local hosts? Evidence from Uganda and Ethiopia

We study whether perceptions of labor market competition negatively influence out-group attitudes between refugees and their local hosts using a survey vignette experiment conducted in urban and rural Ethiopia and Uganda. Our vignette consists of a short story about a fictional job-seeker in which we randomize the citizenship (refugee/national) and occupation (same as/different from respondent). Our estimates suggest that host attitudes are significantly more negative when the vignette character is a refugee in the same occupation. Such prejudice against the out-group is not confirmed among refugees. Exploring the context-dependency of our results, evidence suggests that negative attitudes towards refugees that are tied to perceived labor market competition largely manifest in contexts of limited refugee worker presence. Hence, perceived labor market competition contributes to prejudicial attitudes, but results suggest that these perceived threats do not necessarily coincide with experienced labor market competition between refugees and their hosts. Additional heterogeneity analysis based on prior contact and ethno-linguistic proximity provides suggestive evidence that cross-group interactions reduce the salience of perceived labor market competition as a driver of out-group prejudice in refugee settings.