Asylum seekers are not initially allowed to work in many European countries. There is now evidence that this practice is counterproductive over the long term: a study by the Immigration Policy Lab of ETH Zurich and Stanford University reveals that refugees in Germany who are prevented from working for a shorter period, find a job quicker on receiving permission to work than those who are excluded for a longer spell. Five years following the expiry of the waiting period, the employment rate is 20 percentage points higher among refugees subjected to a shorter labour market ban.
A shorter ban brings faster integration
The researchers compared two homogeneous groups and their employment rates following the end of their exclusion from the labour market: the refugees from ex-Yugoslavia who fled to Germany in 1999 and 2000. The reason for this comparison is that the waiting period for asylum seekers in Germany was reduced to 12 months in 2000. The refugees who arrived in 2000 thus had a shorter waiting period by seven months than those who arrived in 1999. The 1999 arrivals were not allowed for work for between 13 and 24 months, depending on when they arrived.
The shorter waiting period and homogeneity of the two groups enables the correlation of the differences in employment with the different waiting periods.
Forced unemployment demotivates
The researchers used statistical methods to exclude the impact of other contributing factors, such as the economy. They traced the higher labour market participation rate of the refugees who were excluded for a shorter duration back to their not having been demotivated by a long labour market ban and forced unemployment. This impedes integration. “Preventing people from working is shortsighted”, says Moritz Marbach, co-author of the study. “Instead of making refugees dependent on social welfare for years, countries like Germany should exploit their initial motivation and quickly integrate the refugees into the labour market.”
The authors also argue that the state pays a high price for this labour market exclusion. If the refugees who left ex-Yugoslavia for Germany in 1999 had achieved the same level of employment as their 2000 counterparts, due to a shorter labour market ban, the state would have saved in the region of EUR 40 million a year in lower welfare expenditure and higher tax revenue.
