Welcoming refugees pays economic dividends, if they’re allowed to work

A new report recommends getting refugees into work quickly, coupled with high investment

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Every euro invested in refugees can generate two euro in economic benefits over five years, new research from the Tent Foundation suggests.

Dispelling the myth that refugees are fundamentally an economic burden, the research finds that while welcoming refugees requires an initial investment, it quickly yields economic dividends as refugees both supply labour and create consumer demand.

Author Philippe Legrain points to the hundreds of thousands of ‘boat people’ who fled Vietnam in the 1970s and 80s. Today, Vietnamese refugees are more likely to be employed than people born in the US, and have higher household incomes.

However, in order for these economic benefits to be unlocked, refugees must be allowed to work, an area in which the EU currently falls short.

“Many [EU countries] provide the worst of both worlds: little help for refugees and high barriers to employment and enterprise. This breeds hardship and failure for refugees, and misplaced resentment towards them from locals. Greater investment in refugees combined with reforms to open up opportunities for progress are both economically and politically desirable.”

The key policy recommendation is that countries should get refugees into work quickly.

At present, asylum seekers in the UK are not entitled to work while their applications are being processed, which can take months, and in some cases upwards of a year.

One Response to “Welcoming refugees pays economic dividends, if they’re allowed to work”

  1. Hans Odeberg

    The “if” in your headline is the key part of the article. Let me take, as an example, the socialist paradise I live in: Sweden. For decades, a Labour government has worked hard to eradicate low-paying no-qualification jobs, to create a society with low income differences, where the few percent who cannot get a job have been provided decent social welfare by the vast majority who have jobs.

    Enter a large amount of immigrants with little or no schooling. Immigrants who will be competing for jobs with Swedes, who almost all have had at least 12 years in school. Today, most of these immigrants have almost no chance of getting a job. What to do?

    The socialist way of giving them all welfare, forever, is not likely to succeed. There is a limit to how many non-working citizens a welfare state can support. There have already been talks of raising local council taxes a couple of percent (they are already around 30%…), and raising the pension age a couple of years. Swedish tax payers and voters will not look forward to this path.

    The socialist way of providing education for the people is more realistic. However, there is a scale/volume problem: the country is already seeing shortages of Swedish teachers, actually of teachers in general. Maybe the UK has similar problems? Thus, there is a limit to the number of immigrants who can be taught the language, the number of immigrants who can be taught to read and write from scratch, and thus a limit to the number of immigrants the country can accept each year. At least if we want the “if” to be true, and immigrants to be an economic asset.

    The right-wing way of paying unschooled workers the salaries that the market thinks unschooled workers are worth is also unlikely to succeed. We are probably not looking at 90% of a normal salary, but rather 10% – which immediately raises the concern that there is no available slum housing in Sweden that people with barely no income can inhabit. Nor do we want there to be, we prefer a high standard for everyone, low income gaps and a stable society. While some liberals have argued that immigrants will have a better life living in Swedish shanty-towns than in Afghan shanty-towns (at least they don’t get shot at by Talibans and IS), I suspect the swedish voters will not look favourably on any party suggesting such solutions.

    So what are your solutions for making the “if” a reality?

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