Economic Challenges. Bergljot Bjørnson Barkbu, IMF

Transcription

1 The Refugee Surge in Europe: Economic Challenges Bergljot Bjørnson Barkbu, IMF LSE Institute of Global Affairs and Ortygia Business School Conference on Managing gmigration Solutions beyond the Nation State Siracusa, April European Department

2 FACTS Asylum applications at historic highs 1,4 End of 1,2 the Cold 1, War 8 Asylum applications in the EU (in thousands) Yugoslav Wars Civil war in Syria Source: Eurostat. The numbers in perspective 2

3 Surge in mid-215 First-time asylum applications in the EU (in thousands) Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov.Dec. Source: Eurostat The numbers in perspective 3

4 Uneven impact across countries 1,4 1,2 1, First-time asylum applications, 215 Total applicants, thousands Applicants per 1, inhabitants (RHS) EU-28 DEU HUN SWE ITA AUT FIN DNK GRC LUX Source: Eurostat The numbers in perspective 4

5 Increasing numbers reflect conflicts First-time applications in the EU, by country of origin 4 (in thousands) Syria Afghanistan Iraq Pakistan Eritrea Source: Eurostat The numbers in perspective 5

6 Refugees integrate more slowly Employment relative to native workers (in percent) Years since arrival in country < > Other immigrants: Role of language skills -2 Other immigrants: Conditional gap Refugee: Role of language skills Refugee: Conditional gap -25 We proxy the refugee experience using that of immigrants from refugee-sending countries, based on the European Social Survey Empirical evidence on labor market integration 6

7 Reliance on social benefits is higher Social benefits as main source of income, relative to natives (in percent) 25 Other immigrants: Role of language skills Other immigrants: Conditional gap Refugee: Role of language skills 2 Refugee: Conditional gap < >2 Years since arrival in country We proxy the refugee experience using that of immigrants from refugee-sending countries, based on the European Social Survey Empirical evidence on labor market integration 7

8 Wage gaps are large Immigrant wage gap: Distribution of estimate across studies -9% -8% -7% -6% -5% -4% -3% -2% -1% % Note: Histogram of migrant wage gap, conditional on observables, based on 75 estimates across 9 studies on earnings assimilation of immigrants in the US, Canada and Europe. Empirical evidence on labor market integration 8

9 Net fiscal contribution depends on age 4 Germany: Present value of expected future net fiscal contributions, by age group (thousands of euro, generational account approach, base year = 212) 3 Natives 2 Migrants Source: Bonin (214). Empirical evidence on fiscal contribution 9

10 Growth effect positive, but uneven Impact on Output Level (deviation from baseline, in percent) Germany Germany slow integration EU EU slow integration ti Source: IMF estimate. Simulation results 1

11 Speed of integration affects unemployment Impact on Unemployment Rate (deviation from baseline, in percentage) Germany Germany slow integration EU EU slow integration ti Source: IMF estimate. Simulation results 11

12 Integration crucial for public finances Impact on Government Debt/GDP (deviation from baseline, in percentage points) Germany Germany slow integration EU EU slow integration ti Source: IMF estimate. Simulation results 12

13 Labor market integration Prompt integration of refugees into labor markets is key to favorable economic impact Lower barriers to work eligibility during application period Provide language and job search training early If high entry wages a concern: Temporary wage subsidies for employers Temporary, targeted exceptions to minimum wages? Tackle inactivity traps by reducing marginal taxes on lowwage workers or tapering social benefits gradually upon entering employment Policy recommendations 13

14 Product markets Ease avenues to self-employment employment and facilitate skill recognition Simplify regulatory and administrative procedures for new firms Provide start-up support and reduce effective protection for incumbent firms Accelerate skill recognition, provide targeted training i Policy recommendations 14

15 Housing and mobility Mobility to high-labor-demand areas requires affordable housing Tackle bottlenecks to low-cost housing (e.g., land use regulation, construction permits) Financial incentives to build social housing Facilitate access to basic financial services Full geographical mobility of accepted asylum seekers, within and between countries? Policy recommendations 15

16 Fiscal policy How should the short-term term fiscal costs related to refugees be handled? Many EU countries have limited fiscal space but Most countries should be able to absorb the immediate fiscal cost within their SGP targets. t Allow temporary deviations from SGP targets on a case-by-case basis. Caveat: There are major operational issues. Policy recommendations 16