Employment Effects of Spatial Dispersal of Refugees
Spatial dispersal policies may influence labour market integration of refugees through two mechanisms. First, it may affect the local job offer arrival rate, and second, it may affect place utility. We investigate the second mechanism theoretically by formulating a partial search model in which an individual searches simultaneously for a job and for a new residential location. The model predicts that the reservation wage for local jobs is decreasing in place utility. We argue that spatial dispersal policies decrease average place utility of refugees which decrease the transition rate into first job due to large local reservation wage effects. We investigate both mechanisms empirically and test the predictions of the theoretical model by evaluating the employment effects of the Danish spatial dispersal policy carried out 1986-1998.
|Date of creation:||Apr 2005|
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