The Impact of Refugee Crises on Host Labor Markets: The Case of the Syrian Refugee Crisis in Turkey

The civil war in Syria has culminated into major refugee crises in its neighboring countries. By the end of 2013 more than half a million people were seeking shelter in cities and refugee camps in Turkey. We analyze how the Syrian refugee influx in Turkey has affected food and housing prices, employment rates and internal migration patterns in regions of Turkey where refugees are being accommodated. Refugee camps are geographically concentrated near the Syrian border, which enables us to employ the rest of regional Turkey as control group with a difference-in-difference approach to analyze the impact on local economies. Our findings suggest that housing and to a lesser degree food prices increased, but employment rates of natives in various skill groups are largely unaffected. Incumbent natives appear to be staying put considering the limited migration out of the region, but there is a significant decline in internal migration into regions hosting refugees. Nevertheless, the decline in internal in-migration is less than a tenth of the refugee influx, implying that there is little evidence of refugees crowding out natives in local labor markets

Export prices, imported inputs, and domestic supply networks

We study the impact of import intensity in production of exporters and their suppliers on exchange rate pass-through to export prices. For identification, we use rich micro-level databases – domestic firm-to-firm sales and firm-product-level customs – from a large emerging market, Turkey. We find that ignoring suppliers’ import reliance misses nearly half of the picture: while exporters’ degree of reliance on own imported goods is 24%, this number reaches nearly 40% once their suppliers are taken into account. A higher degree of import reliance by exporters’ suppliers significantly increases pass-through to export prices by inducing higher imports-driven marginal costs passing over to downstream exporters. Moreover, exporters with a higher concentration in their domestic supply networks have a higher pass-through

Two and a half million Syrian refugees, skill mix and capital intensity

We investigate how the rapid increase in the low-skilled labor supply induced by the inflow of 2.5 million Syrian refugees changed the tasks performed by native workers and the amount of capital used by firms in Turkey. Despite the unexpected nature of the refugee inflow, location choice of the refugees may be endogenous to the labor market opportunities of hosting regions. To handle this endogeneity issue, we use an instrument for the refugee intensity based on the distance of Turkish regions to the Syrian ones. The results based on Labor Force Survey suggest that the inflow of refugees increased natives’ task complexity, reducing the intensity of manual tasks, and raising the intensity of abstract, routine and ICT tasks. This effect is particularly strong for natives with medium level of education. Exploiting the administrative firm data that contains the entirety of firms in the country, we find that the firms reduced their fixed assets. The fixed asset reduction is largest in machinery and equipment, which can be interpreted as a decline in the capital intensity of production. We conclude that tasks provided by Syrian refugees are substitutes for natives’ manual tasks and firms’ capital, and complementary to natives’ more complex tasks

Two and a half million Syrian refugees, tasks and capital intensity

We investigate how the rapid increase in the low-skilled labor supply induced by the inflow of 2.5 million Syrian refugees changed the tasks performed by native workers and the capital intensity of firms in Turkey. We use both survey and administrative data to estimate the effects. The results based on the Labor Force Survey suggest that the inflow of refugees increased natives' task complexity, reducing the intensity of manual tasks, and raising the intensity of abstract tasks. This effect is driven by highly educated and young natives. Exploiting the administrative firm data that contains the entirety of firms in the country, we find that manufacturing firms reduced their capital intensity and investments. Reduction in capital intensity and investment is largely driven by smaller sized firms. We conclude that tasks provided by Syrian refugees are substitutes for manual tasks and capital inputs, and complements to more complex tasks

Training in two-tier labor markets: The role of job match quality

This study examines training investments in two-tier labor markets, focusing on the role of job match quality. Temporary workers are in general more likely than permanent workers to leave their employer and therefore are less likely to receive employer-funded training. However, as firms prefer to continue productive job matches, we hypothesize that the negative effect of holding a temporary contract on the probability to be trained diminishes with the quality of the job match. Using a recent longitudinal survey from the Netherlands, we find that temporary workers indeed participate less frequently in firm-sponsored training. However, this effect is fully driven by mismatches: holding a temporary contract does not significantly decrease the probability to receive training for workers in good job matches. Depending on match quality, a temporary job can either be a stepping stone or a dead-end

Training in two-tier labor markets : The role of job match quality

This study examines training investments in two-tier labor markets, focusing on the role of job match quality. Temporary workers are in general more likely than permanent workers to leave their employer and therefore are less likely to receive employer-funded training. However, as firms prefer to continue productive job matches, we hypothesize that the negative effect of holding a temporary contract on the probability to be trained diminishes with the quality of the job match. Using a recent longitudinal survey from the Netherlands, we find that temporary workers indeed participate less frequently in firm-sponsored training. However, this effect is fully driven by mismatches: holding a temporary contract does not significantly decrease the probability to receive training for workers in good job matches. Depending on match quality, a temporary job can either be a stepping stone or a dead-end

"Who'll take the chair?" Maternal employment effects of a Polish (pre)school reform

This study examines the impact of preschool availability on the employment of mothers of preschool-aged children. We exploit a transitional phase of a 2009 Polish education reform that simultaneously lowered the primary school age from 7 to 6 and provided a statutory right to preschool to 5-year-olds. As a significant share of 6-year-old children moved into primary schools a year earlier, their preschool seats effectively became available for younger children. The reform thereby led to a substantial rise in the number of available preschool seats for 3- to 5-year-olds. Using regional variation in the degree of preschool expansion, we estimate the impact of the increased availability of preschool seats on maternal employment. Our results indicate a significant and sizable employment effect: a 10% points increase in the ratio of preschool seats to preschool-aged children increases maternal employment by around 4.2% points. The effect seems to be concentrated among highly educated mothers and mothers with a youngest child of age three

Refugees and housing: evidence from the mortgage market

This paper investigates the impact of large-scale Syrian refugee inflows on the Turkish housing market. Employing a micro-level data set of the population of mortgaged houses in Turkiye between 2010 and 2017, it identifies the dynamic effects using a difference-in-differences approach. As the regional distribution of Syrian refugees is presumably not exogenous, it is instrumented in the estimations. The instrument is constructed using the distance from Turkish provinces to each Syrian region, while weighting each Syrian region by their population and distance to Turkiye compared to other destination countries. The results show that house prices increased in response to the arrival of Syrian refugees. The effects are mostly driven by low-priced housing and faded after 2014. The results further show that construction permits and sales increased, while the average age of purchased houses declined, indicating an increase in supply that may explain the fading-out effect over time. Finally, the findings provide suggestive evidence that houses that are sold after the arrival of refugees decline in size, which further points to a squeeze in the housing market for natives

Global capital conditions and SME performance [Küresel sermaye koşulları ve KOBİ performansı]

This paper studies how a tightening in global capital conditions, led by the United States Federal Reserve (Fed)’s taper tantrum policy in 2013, affects small and medium-sized enterprises (SMEs) performance in Türkiye, specifically focusing on credit access, investment, and sales growth. Our findings reveal that the global tightening led to adverse effects on domestic credit conditions, resulting in SMEs experiencing their lowest credit access in 2013. As a result, SMEs' investment and sales growth experienced a significant decline with a one-year delay in 2014. However, the estimated negative effects on SME performance gradually diminished over the subsequent three years

Consequences of a massive refugee influx on firm performance and market structure

This study combines an administrative dataset of the full population of Turkish firms and the setting of the sudden mass migration of Syrian refugees to Türkiye to identify the effect of migrants on firm performance and market structure. As a result of the migrant shock, existing firms expand and become more efficient in generating sales from assets, and new firms are established. There is suggestive evidence that market concentration shows less concentration, implying more competition. Quantitatively, a 10 percentage-point rise in the migrant-to-native ratio increases firm sales by 3.8%, sales-to-asset ratios by 2.3%, the number of active firms by 5.8%, and reduces firms’ average market share by 4.1%. We further document an increase in the export volume and variety of exported products to the Middle East and North Africa (MENA) region among existing exporters. New firms are also more likely to export to the MENA region. In addition, we observe a decline in export prices, implying a rise in the competitiveness of exporting firms. The results also indicate evidence for an effect of migrants’ skills and networks on exports, as the export value and variety of products to the MENA region increase more than those to the EU region while the prices of products exported to the two regions show similar changes