The Effects of Initial Low-barrier Employment Availability on Refugee Labor Market Integration

I examine whether the early but temporary availability of low-barrier employment opportunities in the hospitality sector affects the labor market integration of refugees. My identification strategy combines the quasi-exogenous allocation of refugees to Austrian regions with high seasonality in Austria's hospitality sector, where 25% of refugees find initial employment. Exploiting within region, within year variation, I find that receiving labor market access during high seasonal demand increases employment probability initially, with significant employment effects of up to 3 percentage points, or 9% of the mean, in the first months. Employment advantages diminish after the first year, indicating that such early employment opportunities do not serve as a stepping stone. Still, treated refugees have in total earned more in the first three years, with no significant differences in medium-term wages and job quality. One disadvantage of early employment in hospitality is the increased labor market segregation, as treated refugees are more likely to work in industries more typical for refugees and in firms with higher non-Austrian coworker shares.