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The Labor Market Consequences of Refugee Supply Shocks

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  • George Borjas

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  • Joan Monras

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Abstract

The continuing inflow of hundreds of thousands of refugees into many European countries has ignited much political controversy and raised questions that require a fuller understanding of the determinants and consequences of refugee supply shocks. This paper revisits four historical refugee shocks to document their labor market impact. Specifically, it examines: The influx of Marielitos into Miami in 1980; the influx of French repatriates and Algerian nationals into France at the end of the Algerian Independence War in 1962; the influx of Jewish émigrés into Israel after the collapse of the Soviet Union in the early1990s; and the exodus of refugees from the former Yugoslavia during the long series of Balkan wars between 1991 and 2001. It uses a common empirical approach, derived from factor demand theory, and publicly available data to measure the impact of these shocks. Despite the differences in the political forces that motivated the various flows, and in economic conditions across receiving countries, the evidence reveals a common thread that confirms key insights of the canonical model of a competitive labor market: Exogenous supply shocks adversely affect the labor market opportunities of competing natives in the receiving countries, and often have a favorable impact on complementary workers. In short, refugee flows can have large distributional consequences. [Working Paper 22656]

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  • George Borjas & Joan Monras, 2016. "The Labor Market Consequences of Refugee Supply Shocks," Working Papers id:11339, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:11339
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    References listed on IDEAS

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    1. Cohen-Goldner, Sarit & Paserman, M. Daniele, 2011. "The dynamic impact of immigration on natives' labor market outcomes: Evidence from Israel," European Economic Review, Elsevier, vol. 55(8), pages 1027-1045.
    2. Rachel M. Friedberg, 2001. "The Impact of Mass Migration on the Israeli Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1373-1408.
    3. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    4. Jennifer Hunt, 1992. "The Impact of the 1962 Repatriates from Algeria on the French Labor Market," ILR Review, Cornell University, ILR School, vol. 45(3), pages 556-572, April.
    5. Joan Monras, 2015. "Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis," Sciences Po Economics Discussion Papers 2015-04, Sciences Po Departement of Economics.
    6. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 145-173.
    7. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    8. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-553, September.
    9. Grossman, Jean Baldwin, 1982. "The Substitutability of Natives and Immigrants in Production," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 596-603, November.
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    More about this item

    Keywords

    inflow; refugees; refugee shocks; Marielitos ; Miami; French repatriates and Algerian nationals; collapse of the Soviet Union; Yugoslavia; Balkan wars between 1991 and 2001; distributional consequences;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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