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Employment Effects of Spatial Dispersal of Refugees

  • Anna Piil Damm

    (Institute of Economics, University of Copenhagen)

  • Michael Rosholm

    (Department of Economics, University of Aarhus)

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.

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File URL: http://www.econ.ku.dk/cam/wp0910/wp0406/2005-03.pdf/
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Paper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2005-03.

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Length: 35 pages
Date of creation: Apr 2005
Date of revision:
Handle: RePEc:kud:kuieca:2005_03
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