Middle East

Morality aside, refugee acceptance is a matter of economic benefit

refugee photo.jpegBetween Donald Trump Jr. comparing Syrian refugees to poisoned Skittles and a camerawoman kicking and tripping refugees fleeing the Hungary-Serbia border, the resettlement of refugees from Syria to Western countries has faced much derision and scrutiny. Since March 2011, approximately 470,000 Syrians have been killed in their ongoing civil war and more than ten million have been internally displaced or forced to leave the country. This crisis has caused millions of Syrians to seek asylum in other countries, with many of them dying trying to reach refuge. When it comes to the resettlement of refugees into the United States, unwarranted hate, groundless fear and false information have been rampant. More subversively, when it comes to economic research, refugees may actually posit direct, long run economic benefits.

According to the U.S. Department of State, during the 2016 fiscal year, 84,995 refugees from 79 different countries were admitted into the United States. 70 percent of those refugees came from the Democratic Republic of Congo, Syria, Burma, Iraq, and Somalia. Over 72 percent of those resettled were women and children. The screening process can take between 12 and 18 months, with those in desperate situations receiving priority. Less than one percent of the global refugee population passes the first application for resettlement in the U.S.

Of those refugees who were granted residency in the U.S. this year, 46 percent were Muslim and 44 percent were Christian. Since September 2001, about 785,000 refugees entered the U.S. and fewer than 20 were arrested or expunged for terrorist related activities. A risk analysis done by the Cato Institute found that between 1975 and 2015 the chance of being killed in a terrorist attack on American soil conducted by a refugee was 1 in 3.64 billion a year.

A study conducted by Kalena E. Cortes, Associate Professor of Public Policy at Texas A&M University, compared the fiscal growth of refugees to that of economic immigrants, those who enter a country to improve their standard of living and job opportunities. The research found, “In 1990, refugees from the 1975-1980 arrival cohort earned 20 percent more, worked 4 percent more hours, and improved their English skills by 11 percent relative to economic immigrants.” While these refugees initially had lower annual earnings, they greatly outpaced the economic immigrants in economic gains.

Since refugees lack the option of returning to their home country, their time horizon in the host country is much longer than that of economic immigrants. A longer time horizon means refugees have a higher likelihood to assimilate to the earnings growth of native-born citizens. They are incentivized to invest in “country-specific” human capital, such as learning the language or enrolling in the country’s education system. Also, they have a longer period of time to recoup their human capital investments. Not only do refugees add to the economy with labor, they also contribute through consumption. At a local level, refugees exercise their purchasing power, increasing the demand for goods and services.

In Cleveland, 598 refugees were resettled in 2012, with approximately 4,000 more resettled in the decade prior. The Refugee Services Collaborative of Cleveland spent approximately $4.8 million on refugee services in 2012 and the economic impact of refugees on the city during that year is estimated to be $48 million and 650 more jobs. A report by Chmura Economics and Analytics observed that, on average, the refugees found employment within five months of their resettlement, despite their lack of proficiency in the English language. As the labor market participation and income of refugees increased, the reliance and need for government assistance decreased substantially.

The resettlement of refugees can be viewed as an tool for economic development and regrowth. Cities and regions that accept refugees see an influx of laborers who are initially willing to work for lower wage rates, giving an area stuck in an economic trough the chance to re-energize. The Rust Belt city of Utica, NY lost about a third of its population in the second half of the 20th century when local factories closed, stunting economic growth. However, in the past four decades the Mohawk Valley Resource Center for Refugees resettled about 15,000 refugees from 74 different countries into Utica, completely revitalizing the area. The largest group of refugees, Bosnians who sought asylum during the Balkan conflict, have renovated hundreds of neglected houses and opened their own businesses.

Refugees bring fresh energy, innovation and the desire to rebuild to their new hometowns. A study from 2000 on the fiscal impact of refugees in Utica and Oneida county conducted by Hamilton College found that while resettling the refugees required an upfront cost, it was primarily front-loaded and created a net fiscal benefit for the community in the long run. The study also found little evidence that the resettlement of refugees negatively affected employment of native laborers.

Jeffrey Sachs, a senior UN advisor and director of the Earth Institute at Columbia University, observed that the refugees entering the United States currently are more educated than a typical person from their country. New refugees are also expected to be younger, giving them a greater chance to “make it” in the American economy. An investment in refugees not only saves people from dangerous and dire situations, but also brings new life and value into the local, regional and national economy.

Categories: Middle East, World

Tagged as: ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s