Beyond the Battlefield: The Impact of War on Expatriates’ Health and Livelihoods

We study how expatriates cope when conflict breaks out in their homeland. Using Russia’s 2022 invasion of Ukraine as a natural experiment, we identify causal effects using a matched difference-in-differences design, comparing incumbent Ukrainian migrants in Sweden to matched migrants from other countries. We show that Ukrainian expatriates experience immediate and persistent mental health deterioration—a 30 percent increase in psychiatric prescription use that remains elevated three years later—while simultaneously increasing employment and earnings. A simple framework rationalizes this pattern through two channels operating in opposite directions: concern for family safety worsens mental health and raises the disutility of work, while heightened financial responsibilities raise the return to earning income. Consistent with reduced reservation wages, Ukrainians take on secondary jobs, exit unemployment faster into lower-quality jobs, and earn less than comparable coworkers. Earnings effects concentrate among migrants from more war-exposed regions, while mental health effects attenuate in Swedish municipalities with more Ukrainian refugee arrivals. Results replicate in European and US survey data. As global migration and armed conflict both reach historic highs, the findings show that the welfare costs of war extend across borders, shaping the well-being and economic behavior of expatriates worldwide.