Host Environments and Welfare of In-Camp Refugees : Evidence from Ethiopia

This paper examines welfare disparities between in-camp refugees and host com- munities in Ethiopia, using data from the 2023 Socio-Economic Survey of Refugees in Ethiopia. The analysis reveals significant welfare gaps between in-camp refugees and hosts even after accounting for various other baseline socioeconomic char- acteristics: in-camp refugees exhibit 60 percent lower consumption per capita and poverty rates that are 40 percentage points higher compared to host communities. These disparities are also associated with limited employment opportunities and dependence on humanitarian aid among in-camp refugees. The study examines the relationship between host community characteristics and refugee welfare, revealing that more favorable socioeconomic environments benefit refugees, even when labor market outcomes are constrained by legal and structural barriers. Furthermore, the paper explores how employment outside camps may be linked to the welfare of in-camp refugees, as well as the reasons behind their pursuit of such opportunities despite restrictive policies. It finds that refugees working outside camps often originate from poorer households but report a greater sense of autonomy and control over their lives. These findings highlight the importance of economic inclusion as a pathway to self-reliance for in-camp refugees and emphasize the need to remove barriers to formal employment opportunities outside camps to improve their welfare.