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Permanent Residency and Refugee Immigrants’ Skill Investment

Author

Listed:
  • Jacob Nielsen Arendt
  • Christian Dustmann
  • Hyejin Ku

Abstract

We analyze an immigration reform in Denmark that tightened refugee immigrants’ eligibility criteria for permanent residency to incentivize their labor market attachment and acquisition of local language skills. Contrary to what the reform intended, the overall employment of those affected decreased, while their average language proficiency remained largely unchanged. This was caused by a disincentive effect, where individuals with low prereform labor market performance reduced their labor supply. Our findings suggest that stricter permanent residency rules, rather than incentivizing refugees’ skill investment, may decrease the efforts of those who believe they cannot meet the new requirements.

Suggested Citation

  • Jacob Nielsen Arendt & Christian Dustmann & Hyejin Ku, 2025. "Permanent Residency and Refugee Immigrants’ Skill Investment," Journal of Labor Economics, University of Chicago Press, vol. 43(2), pages 293-318.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/726433
    DOI: 10.1086/726433
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    Cited by:

    1. is not listed on IDEAS
    2. Fasani, Francesco & Frattini, Tommaso & Pirot, Maxime, 2023. "From Refugees to Citizens: Labor Market Returns to Naturalization," CEPR Discussion Papers 18675, C.E.P.R. Discussion Papers.
    3. Rozo, Sandra & Grossman, Guy, 2025. "Refugees and Other Forcibly Displaced Populations," Policy Research Working Paper Series 11123, The World Bank.

    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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