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Syrian Refugees in Jordan – What are they doing to the labour market?

 

Syrian Refugees in Jordan – What are they doing to the labour market?

With enormous numbers of refugees spilling into Syria due to the ongoing conflict, there has been a great deal of discussion around the effects of this displacement, particularly on the recipient countries. Although most of this discourse has focused on Europe, Syria’s neighbours (Jordan, Lebanon and Turkey) have taken a much larger number of refugees in sheer numbers. They have also taken a larger percentage of the populations of the recipient countries.

A recent paper by Ali Fakih and May Ibrahim  (“The Impact of Syrian Refugees on the Labor Market in Neighboring Countries: Empirical Evidence from Jordan” ) aimed to find out the effect of the  700,000 or so refugees on local wages and employment rates. According to Fakih and Ibrahim, there is “no relationship between the influx of Syrian refugees and the Jordanian labour market.” With Syrians barred from formal work in Jordan, the informal labour market becomes more important, with 160,000 Syrians estimated to be engaged in informal employment, in sectors like agriculture, construction and food services. If displacement  has little to no adverse effects on the Jordanian informal market, one should look to other examples of refugee influenced increases in the labour market to find out if these lack of effects hold true; this is what we tend to see.

Evidence presented to the SOAS Policy Forum by Sam Bowman on a wide ranging talk about the effects of immigration suggested the effects of displacement were beneficial, with a small rise in native wages.Other research suggests that  over the long term, the displacement is beneficial for both refugees and host countries. Data from Denmark and Miami, Florida, facing similar situations (in that large numbers of refugees were arriving because of political conflict. In the Miami example, the labour force was increased by 7% by refugees from Cuba) further suggests these effects are true.

Although the political situation in Jordan is complex, the huge cost ($1.7 billion) of hosting refugee’s (both, for the host country and the immigrants in refugee camps) should encourage the Jordanian Government to consider lowering restrictions on labour force participation for immigrants, or at least allow a framework of legal employment within the refugee camps to protect native workers from the small but politically contentious wage and unemployment effects that have affected other ‘developing nations’. A better solution would be work permits for employment. This would allow the Jordanian Government to  face less fiscal pressure from the lowered cost of providing for Syrian refugees thus supporting themselves through employment..

This is what many policy makers in the EU and Western World have been calling for, but this must be supported by trade concessions and increased global aid. The latter is being provided by the UK, to enable Jordan to mitigate political consequences of refugee influx. If allowing refugees to work has minimal effects on local labour markets, this should not only be a policy prescription for Jordan, but also for western leaders with much lower refugee populations.

Jonathon Kitson

The views expressed in this piece are the opinions of the contributors alone, and do not reflect the position of the Policy Forum.

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