The benefits of allowing refugees to work
Refugees not only leave behind their homes and communities, they also leave behind their jobs and livelihoods. While refugees often need immediate aid upon arriving in a host country, many prefer to work in the long term rather than remaining entirely reliant on aid. On World Refugee Day on Thursday, one way to recognize and encourage the strength and perseverance of refugees is to support their ability to work and even to become entrepreneurs.
Many countries do not allow refugees to work legally or they impose significant limitations on work for refugees, such as limiting them to specific sectors, requiring fees for work permits, demanding extensive paperwork from both refugees and potential employers, and imposing wait periods of many months before a refugee can work. In some countries, refugees risk losing essential social services if they find work, creating a strong disincentive.
Refugees who had qualifications in their home countries for careers as doctors, electricians or teachers find that they must undergo years of training to gain licenses in their host countries; therefore, many end up working in jobs that are far below their skill levels. In other cases, refugees lack market-relevant skills in their host countries, particularly language skills. Another problem is that refugees might end up in places that do not need their labor, such as camps, rural areas or large cities, while other places, such as mid-sized cities, might offer better opportunities.
A common challenge is that host communities see refugees as taking jobs away from natives, and it is politically difficult to allow refugees to work when a host country’s economy is slowing and unemployment is rising.
Despite these challenges, allowing refugees to work benefits both them and their host countries, according to multiple studies from sources such as a study by the Immigration Policy Lab at Stanford University and ETH Zurich, an April 2019 report by the Open Political Economy Network and the Centre for Policy Development, and UN High Commissioner for Refugees (UNHCR) research.
The ability to work legally has clear benefits for refugees. Work offers a sense of self-sufficiency and dignity. It also helps refugees integrate into their host communities and become less reliant on aid.
Allowing refugees to become entrepreneurs can be a particularly positive development for local communities.
Kerry Boyd Anderson
Allowing refugees to work legally also has benefits to host countries. It can reduce the burden on social services and fiscal spending, especially over the long term. Refugees can contribute through taxes when they work in the formal sector. With market-relevant training, refugees can help fill gaps in the workforce.
Allowing refugees to become entrepreneurs can be a particularly positive development for local communities. As Philippe Legrain wrote recently in the Guardian, refugees “are already equipped with the key entrepreneurial strengths of resilience, risk-taking and resolve.” The UNHCR has highlighted the value that refugees bring to their communities as entrepreneurs. They often only need simple access to permits and a small amount of capital to set up a business. In some cases, refugee entrepreneurs build businesses that go on to provide jobs to natives in the host community.
There are several examples of countries that have developed successful refugee integration systems that allow refugees to work. In the US, refugees who arrive through the resettlement program have the right to work upon arrival. The government provides a small amount of financial support to new refugees, often augmented by charitable organizations, but it is not sufficient to provide for refugees unless they find jobs fairly quickly. This has worked well. A 2017 leaked government report, reported in the New York Times, found that refugees were net contributors — paying more in taxes than they took in government services — over nine years. A 2017 paper by the National Bureau of Economic Research estimated that “refugees pay $21,000 more in taxes than they receive in benefits over their first 20 years in the US.”
Uganda is often cited as a model country for accepting refugees. Despite hosting the third largest group of refugees in the world and having its own economic problems, the country offers unusually generous rights to refugees. They are allowed to work and cultivate land — a policy that has demonstrated numerous benefits for the refugees and local economies. The refugee program in Uganda is not perfect, but it is a model of how allowing refugees to work and farm can bring significant benefits.
Europe has had more mixed results, reflecting mixed policies and the realities of its recent refugee population. With an aging population, Europe needs workers in a number of sectors, and there were hopes that the incoming refugees, who tended to be young, would help fill those gaps. It soon became clear that they first need specific training, especially language skills. Countries such as Germany and Sweden are investing in helping some refugees build the necessary skills, and the refugees still offer a valuable source of manpower, but European patience is wearing thin.
It is important that host countries understand that refugees are likely to spend many years there, so investing in their integration makes sense. The UNHCR has found that “protracted refugee situations… last an estimated 26 years on average.”
There are many options for structuring policies that allow refugees to work in ways that benefit host countries; and they should be tailored to the conditions of a host country and its refugee population. There are plenty of positive and negative lessons that can be learned from past programs. The starting point is to recognize the importance of allowing refugees to work. The 2018 Global Compact on Refugees highlights this point and may contribute to building norms around the value of work for refugees.
- Kerry Boyd Anderson is a writer and political risk consultant with more than 14 years’ experience as a professional analyst of international security issues and Middle East political and business risk. Twitter: @KBAresearch