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Opportunities or Benefits: Local Conditions and Refugee Labor Market Integration

Author

Listed:
  • Katia Gallegos Torres
  • Andreas Steinmayr
  • Valentin Wett

Abstract

This paper studies how local labor market tightness and welfare benefit levels at the time of receiving protection shape refugees' labor market integration and location choices. We exploit a sequence of reforms that generated quasi-random variation in benefit levels, together with variation in local labor market tightness across the districts and months in which refugees receive protection. We find that tighter local labor markets raise employment, while more generous benefits slightly reduce it. These employment effects persist for about 2.5 years, but both shocks have lasting impacts on internal migration. Moreover, the negative employment effect of benefits is larger in tighter labor markets. Neither shock affects the probability of emigrating from Austria.

Suggested Citation

  • Katia Gallegos Torres & Andreas Steinmayr & Valentin Wett, 2026. "Opportunities or Benefits: Local Conditions and Refugee Labor Market Integration," RFBerlin Discussion Paper Series 26232, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26232
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    Keywords

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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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