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Permanent Residency and Refugee Immigrants' Skill Investment

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  • Arendt, Jacob Nielsen

    (Rockwool Foundation Research Unit)

  • Dustmann, Christian

    (University College London)

  • Ku, Hyejin

    (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 pre-reform 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

  • Arendt, Jacob Nielsen & Dustmann, Christian & Ku, Hyejin, 2023. "Permanent Residency and Refugee Immigrants' Skill Investment," IZA Discussion Papers 16313, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16313
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    Cited by:

    1. Fasani, Francesco & Frattini, Tommaso & Pirot, Maxime, 2023. "From Refugees to Citizens: Labor Market Returns to Naturalization," IZA Discussion Papers 16651, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    immigrant assimilation; refugee integration; labor supply; language proficiency; human capital;
    All these keywords.

    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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