Regular Article
The impact of forced displacement on host communities: A review of the empirical literature in economics

https://doi.org/10.1016/j.jdeveco.2020.102606Get rights and content
Under a Creative Commons license
open access

Highlights

  • On average, host households are most likely to experience an increase in well-being following a forced displacement crisis.

  • People who are most likely to experience losses in employment or wages are informal, low-skilled, young and female workers.

  • Negative effects of a forced displacement crisis are most visible in the short-term and tend to vanish in the long-term.

Abstract

The paper reviews 59 empirical studies that estimated the economic impact of forced displacement on host communities. A review of the empirical models used by these studies and a meta-analysis of 972 separate results collected from these studies are the main contributions of the paper. Coverage extends to 19 major forced displacement crises that occurred between 1922 and 2018, to host countries at different levels of economic development and different types of forced migrants. Results refer to outcomes related to employment, wages, prices and household well-being. All studies can be classified as ex-post quasi-natural experiments. The analysis on empirical modeling shows a preference for partial equilibrium modeling, differences-in-differences evaluation methods, and cross-section econometrics, with all these choices largely dependent on the type of data available. The meta-analysis finds that most results on employment and wages are non-significant. When significant, decreases in employment and wages are more likely to occur than increases with decreases strongly associated with the short-term, middle-income countries, females, young and informal workers. Food and rent prices tend to increase in the short-term but other prices may decrease. The probability of observing a decrease in household well-being among hosts is lower than 1 in 5.

Keywords

Refugees
Returnees
Expellees
Escapees
Internally displaced persons (IDPs)
Forced migration
Forced displacement
Host communities
Labor markets
Wages
Prices
Employment
Unemployment
Well-being

JEL classification

D12
E24
F22
F66
J08
J1
J2
J3
J4
J7
J8
N3
O15
P46
R2

Data availability

Data will be made available on request.

Cited by (0)

This is a third updated and revised version of the paper originally published in the World Bank Policy Research Working Paper series (February 2019, No. 8727). The following authors whose papers are covered in the review have kindly checked on our representation of their results and provided comments: Yusuf Emre Akgündüz, Ibrahim Al Hawarin, Örn B. Bodvarsson, Sebastian Braun, Valentina Calderón-Mejía, David Card, Evren Ceritoglu, Michael Clemens, Emilio Depetris-Chauvin, Ali Fakih, Albrecht Glitz, Jennifer Hunt, Merle Kreibaum, Saul Lach, Joshua J. Lewer, Erik Mäkelä, Hani Mansour, Jean-Francois Maystadt, Juan S. Morales, Elie Murard, Ayla Ogus Binatlı, Giovanni Peri, Sandra Rozo, Isabel Ruiz, Albert Saiz, Rafael Santos, Semih Tumen, Carlos Vargas-Silva, Mathis Wagner, and Jacky Wahba. Additional comments were received from Xavier Devictor, Christian Eigen-Zucchi, Harun Onder, Caglar Ozden, and William Wiseman at the World Bank and from participants who attended the following conferences: “Impacts of Refugees in Hosting Economies” held at the University of Southern California, Los Angeles, September 14–15, 2018; “Forced Displacement, Asylum Seekers and Refugees: Economics Aspects and Policy Issues” held at Queen Mary University in London, March 18–19, 2019; “3rd International Conference on Forced Displacement and Migration” held at the German Development Institute in Bonn, October 30–31, 2019; “2020 Research Conference on Forced Displacement. Improving and Scaling Evidence” held at the Joint Data Center on Forced Displacement in Copenhagen, January 16–18, 2020. The paper was also presented in Marseille, Amman and Beirut to local administrations hosting refugees and field workers working with refugees. We are grateful to the Centre for Mediterranean Integration, The German Marshall Fund and the World Bank country offices for organizing these events and to participants for useful insights that helped to contextualize and clarify some of our findings. This work is part of the program ``Building the Evidence on Protracted Forced Displacement: A Multi-Stakeholder Partnership’’. The program is funded by UK aid, it is managed by the World Bank Group (WBG) and was established in partnership with the United Nations High Commissioner for Refugees (UNHCR). The scope of the program is to expand the global knowledge on forced displacement by funding quality research and disseminating results for the use of practitioners and policy makers. This work does not necessarily reflect the views of the UK government, the WBG or UNHCR. All remaining errors are responsibility of the authors.