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Immigration and Prices : Quasi-Experimental Evidence from Syrian Refugees in Turkey

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  • Binnur Balkan Konuk
  • Semih Tumen

Abstract

We exploit the regional variation in the unexpected (or forced) inflow of Syrian refugees as a natural experiment to estimate the impact of immigration on consumer prices in Turkey. Using a difference-in-differences strategy and a comprehensive data set on the regional prices of CPI items, we find that general level of consumer prices has declined by approximately 2.5 percent due to immigration. Prices of goods and services have declined in similar magnitudes. We highlight that the channel through which the price declines take place is the informal labor market. Syrian refugees supply inexpensive informal labor and, thus, substitute the informal native workers especially in informal labor intensive sectors. We document that prices in these sectors have fallen by around 4 percent, while the prices in the formal labor intensive sectors have almost remained unchanged. Increase in the supply of informal immigrant workers generates labor cost advantages and keeps prices lower in the informal labor intensive sectors.

Suggested Citation

  • Binnur Balkan Konuk & Semih Tumen, 2016. "Immigration and Prices : Quasi-Experimental Evidence from Syrian Refugees in Turkey," Working Papers 1601, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:1601
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    References listed on IDEAS

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    Cited by:

    1. Evren Ceritoglu & H. Burcu Gurcihan Yunculer & Huzeyfe Torun & Semih Tumen, 2017. "The impact of Syrian refugees on natives’ labor market outcomes in Turkey: evidence from a quasi-experimental design," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-28, December.
    2. Isabel Ruiz & Carlos Vargas‐Silva, 2018. "The impact of hosting refugees on the intra‐household allocation of tasks: A gender perspective," Review of Development Economics, Wiley Blackwell, vol. 22(4), pages 1461-1488, November.
    3. Anda David & Mohamed Ali Marouani & Charbel Nahas & Björn Nilsson, 2020. "The economics of the Syrian refugee crisis in neighbouring countries: The case of Lebanon," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 28(1), pages 89-109, January.
    4. Di Maio,Michele & Leone Sciabolazza,Valerio & Molini,Vasco, 2020. "Migration in Libya : A Spatial Network Analysis," Policy Research Working Paper Series 9110, The World Bank.
    5. Semih Tumen, 2015. "The use of natural experiments in migration research," IZA World of Labor, Institute of Labor Economics (IZA), pages 191-191, October.
    6. Depetris-Chauvin, Emilio & Santos, Rafael J., 2018. "Unexpected guests: The impact of internal displacement inflows on rental prices in Colombian host cities," Journal of Development Economics, Elsevier, vol. 134(C), pages 289-309.
    7. Yusuf Emre Akgündüz & Marcel van den Berg & Wolter Hassink, 2018. "The Impact of the Syrian Refugee Crisis on Firm Entry and Performance in Turkey," World Bank Economic Review, World Bank Group, vol. 32(1), pages 19-40.
    8. Becker, Sascha O. & Ferrara, Andreas, 2019. "Consequences of forced migration: A survey of recent findings," Labour Economics, Elsevier, vol. 59(C), pages 1-16.
    9. Central Bank of the Republic of Turkey, 2018. "Globalisation and deglobalisation," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation and deglobalisation, volume 100, pages 355-362, Bank for International Settlements.
    10. Suzuki, Ken & Paul, Saumik & Maru, Takeshi & Kusadokoro, Motoi, 2019. "An Empirical Analysis of the Effects of Syrian Refugees on the Turkish Labor Market," ADBI Working Papers 935, Asian Development Bank Institute.
    11. Bilal Malaeb & Jackline Wahba, 2018. "Impact of Refugees on Immigrants’ Labor Market Outcomes," Working Papers 1194, Economic Research Forum, revised 10 May 2018.
    12. Drouvelis, Michalis & Malaeb, Bilal & Vlassopoulos, Michael & Wahba, Jackline, 2019. "Cooperation in a Fragmented Society: Experimental Evidence on Syrian Refugees and Natives in Lebanon," IZA Discussion Papers 12858, Institute of Labor Economics (IZA).
    13. Balkan, Binnur & Tok, Elif Ozcan & Torun, Huzeyfe & Tumen, Semih, 2018. "Immigration, Housing Rents, and Residential Segregation: Evidence from Syrian Refugees in Turkey," IZA Discussion Papers 11611, Institute of Labor Economics (IZA).
    14. Bank for International Settlements, 2018. "Globalisation and deglobalisation," BIS Papers, Bank for International Settlements, number 100, June.
    15. Massimiliano Bratti & Luca De Benedictis & Gianluca Santoni, 2020. "Immigrant entrepreneurs, diasporas, and exports," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 249-272, March.
    16. Stefan Seifert & Marica Valente, 2018. "An Offer that you Can't Refuse? Agrimafias and Migrant Labor on Vineyards in Southern Italy," Discussion Papers of DIW Berlin 1735, DIW Berlin, German Institute for Economic Research.
    17. Tumen, Semih, 2018. "The Impact of Low-Skill Refugees on Youth Education," IZA Discussion Papers 11869, Institute of Labor Economics (IZA).
    18. Nelly El-Mallakh & Jackline Wahba, 2018. "Syrian Refugees and the Migration Dynamics of Jordanians: Moving in or moving out?," Working Papers 1191, Economic Research Forum, revised 10 May 2018.
    19. Ibrahim Al Hawarin & Ragui Assaad & Ahmed Elsayed, 2018. "Migration Shocks and Housing: Evidence from the Syrian Refugee Crisis in Jordan," Working Papers 1213, Economic Research Forum, revised 28 Jun 2018.
    20. Anda David & Mohamed Ali Marouani & Charbel Nahas & Björn Nilsson, 2018. "The economics of the Syrian refugee crisis in neighboring countries," Working Papers 20180001, UMR Développement et Sociétés, Université Paris 1 Panthéon-Sorbonne, Institut de Recherche pour le Développement.

    More about this item

    Keywords

    Immigration; Consumer prices; Syrian refugees; Natural experiment; Informal employment;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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