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Permanent Residency and Refugee Immigrant Skill Investment

Author

Listed:
  • Jacob Arendt

    (ROCKWOOL Foundation Research Unit)

  • Christian Dustmann

    (University College London)

  • Hyejin Ku

    (University College London)

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 Arendt & Christian Dustmann & Hyejin Ku, 2023. "Permanent Residency and Refugee Immigrant Skill Investment," RFBerlin Discussion Paper Series 2314, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:2314
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    Cited by:

    1. Francesco Fasani & Tommaso Frattini & Maxime Pirot, 2023. "From Refugees to Citizens: Labor Market Returns to Naturalization," Development Working Papers 489, Centro Studi Luca d'Agliano, University of Milano, revised 11 Jun 2024.
    2. Rozo, Sandra & Grossman, Guy, 2025. "Refugees and Other Forcibly Displaced Populations," Policy Research Working Paper Series 11123, The World Bank.

    More about this item

    Keywords

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    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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