Refugees and Other Forcibly Displaced Populations

This section explores the evidence produced between 2010 and 2024 on the effects of forced migration on host communities, focusing on labour markets, public services, political dynamics, and social cohesion. While forced migration often poses short-term challenges, such as labour market disruptions and pressure on public services, it also creates opportunities for long-term economic growth, political shifts, and improved social integration when resources and policies are adjusted effectively.

Labour Markets and Economic Growth: Short-Term Challenges, Long-Term Opportunities

Recent evidence on the effects of forced displacement on labour markets largely focuses on how refugees impact native labour market outcomes. A substantial number of studies find neutral effects in the short run, particularly on overall employment and wages for native workers (Akgündüz et al. 2015, Peri and Yasenov 2017, Olivieri et al. 2022, Gehrsitz and Ungerer 2022, Postepska and Voloshyna 2024). However, small but negative effects have been observed among certain vulnerable groups, particularly informal workers and other migrants who directly compete with refugees for low-skilled jobs in the informal sector (Calderón-Mejía and Ibáñez 2015, Alix-Garcia and Bartlett 2015, Bahcekapili and Cetin 2015, Borjas and Monras 2017, Ceritoglu et al. 2017, Bagir 2018, Malaeb and Wahba 2018, Clemens and Hunt 2019, Caruso et al. 2021). These negative effects are often concentrated among low-skilled workers, particularly women (Bagir 2018, Morales 2018, Aracı et al. 2022, Shamsuddin et al. 2022) and youth (Ceritoglu et al. 2017, Olivieri et al. 2022), who are more likely to experience reduced employment opportunities and downward wage pressures. In contrast, workers with skills complementary to those of refugees often benefit from refugee migration, as seen in cases where occupational mobility improves or labour demand shifts (Foged and Peri 2016, Fallah et al. 2019, Aracı et al. 2022, Shamsuddin et al. 2022).

The impact on businesses also varies depending on the sector and formality of operations. Self-employed individuals and small businesses in the informal sector often struggle due to increased competition with refugee workers (Rozo and Winkler 2019). By contrast, formal businesses frequently thrive in response to refugee migration, benefiting from increased consumer demand and lower labour costs (Labanca 2020, Berbée et al. 2022). Additionally, investments and firm growth tend to occur in sectors that align with refugee-origin countries' traditional strengths, as well as in service-oriented industries such as food, hospitality, and restaurants, which thrive due to rising demand from both refugees and host communities (Schuman 2017, Altındağ et al. 2020, Akgündüz et al. 2023). This dual effect—boosted demand and reduced labour costs—highlights the nuanced and often sector-specific nature of labour market responses to refugee migration.

More broadly, refugee migration shocks have been shown to generate positive economic effects in the medium to long run (Sarvimäki 2011, Schumann 2017). These benefits are largely driven by the persistence of the population shock, which stimulates economic activity and contributes to long-term growth in host communities.

Public Services: Education and Health 

Congestion pressures often arise in sectors such as education provision when local supply and public resources fail to adjust to the increased demand caused by forced migration (Contreras and Gallardo 2022, Rozo and Vargas 2024). These pressures can lead to displacement effects, where native populations shift from public to private services due to overcrowding and reduced quality. For instance, in the case of education, studies have shown that refugee inflows can push native students into private schools when public systems are not adequately expanded (Tumen 2019, Rozo and Vargas 2024). However, when resources are adjusted to meet the rising demand—through expanded infrastructure or increased funding—there is little evidence of adverse effects on native populations (Morales 2022, Assaad et. al 2023).

In terms of health outcomes, the evidence highlights both challenges and opportunities associated with forced migration. On one hand, refugee inflows can contribute to the spread of vaccine-preventable diseases if displaced populations are excluded from public health services (Ibáñez et al. 2021). On the other hand, integrating refugees and displaced populations into public health systems, particularly through programmes like vaccination campaigns, has been shown to effectively mitigate these risks and improve overall health outcomes (Muñoz-Blanco and Frattini 2024). These findings underscore the importance of inclusive health policies that address the needs of both native and displaced populations to ensure shared public health benefits.

Political Effects

Most of the evidence on the political effects of forced migration focuses on refugee migration. In developed countries, evidence consistently shows that an increase in refugee migration leads to greater support for anti-immigration agendas and a shift in voter preferences away from left-leaning parties toward right-wing parties (Barone et al. 2016, Harmon 2016, Halla et al. 2017, Dustmann et al. 2019, Edo et al. 2019, Dinas et al. 2019, Bratti et al. 2020, Campo et al. 2024, Steinmayr 2021). These political effects tend to be stronger in affluent areas, where local populations may perceive refugees as a threat to economic or social stability. However, the effects are less pronounced in regions with a history of exposure to previous immigration waves, suggesting that familiarity with migrants can reduce opposition (Campo et al. 2023).

In developing countries, the political effects of forced migration are generally more neutral or context-dependent (Fisunoğlu and Sert 2018, Altındağ and Kaushal 2020). In some cases, forced migration can have positive political outcomes when it is accompanied by increased humanitarian aid and improved public services, which benefit both refugees and host communities (Zhou et al. 2023). However, the dynamics can also vary significantly. For instance, in Colombia, the arrival of Venezuelan refugees led to increased support for right-wing parties. This shift occurred because the migration influx made the failures of Venezuela's leftist regime—seen as responsible for the crisis—more salient in public discourse (Rozo and Vargas 2021).

These findings highlight the complexity of political outcomes driven by forced migration, showing that local economic conditions, prior exposure to migration, and the quality of humanitarian interventions play a critical role in shaping political responses.

Attitudes, Perceptions, and Social Cohesion

The existing evidence on the social effects of forced migration focuses primarily on refugee migration. Generally cultural proximity between host communities and refugees plays a significant role in shaping perceptions and attitudes toward migrants. When hosts and refugees share cultural, linguistic, or religious similarities, acceptance tends to be higher, while greater cultural distance often leads to more resistance (Alrababa’h et al. 2020, Barron et al. 2023).[1]1. Although this is generally true this is not always the case. In fact, violence against a marginalised migrant population can be prevalent even when host and refugees share cultural and religious markers, as has been the case in South Africa (Kerr et al. 2019) and Colombia (Knight and Tribin 2023).  However, perceptions are not solely driven by cultural factors—considerations related to refugees' employability and their potential economic contributions are also important in influencing attitudes (Bansak et al. 2016).

Negative attitudes and perceptions are more prominent among individuals who are in direct competition with refugees for economic opportunities. This includes groups such as young males, people with lower wealth, and those employed in blue-collar occupations, where labour market competition is often more intense (Rozo and Urbina 2022, Aksoy et al. 2023). These groups may perceive refugees as a threat to job security, wages, or overall economic well-being, which can exacerbate negative sentiment.

Nevertheless, recent suggestive cross-country evidence provides a different perspective. A study examining refugee arrivals over a 14-year period in low- and middle-income countries finds little evidence that large-scale refugee inflows have significant short-term negative impacts on host communities' attitudes toward immigrants (Aksoy et al. 2024). While the findings are both useful and provocative, the study relies on a single measure—whether respondents consider their area a good place for immigrants to live. Future research should expand on this analysis by incorporating additional questions on migrant and refugee acceptance in nationally representative surveys.

These findings emphasise the complexity of host attitudes, where cultural, economic, and demographic factors interact to shape responses to refugee arrivals. Understanding these mediators is crucial for designing policies that foster positive host-refugee relations and minimise tensions in receiving communities.

Key Takeaways for Policymakers: Lessons from First-Generation Evidence

The evidence on the effects of forced displacement reveals a wide range of outcomes across labour markets, public services, political dynamics, and social cohesion. In labour markets, most studies find neutral short-term effects on native employment and wages, although vulnerable groups, such as informal workers, women, and youth, often experience small but negative impacts due to increased competition. Conversely, workers with complementary skills and formal businesses often benefit from refugee migration through increased occupational mobility, demand-driven growth, and reduced labour costs. Public services, such as education and health, can experience congestion when resources fail to adjust to increased demand, leading to displacement effects for natives. However, evidence shows that proactive investments in infrastructure and inclusive policies, such as expanding health services and vaccination programmes, mitigate these pressures and improve outcomes for both host and displaced populations. Politically, refugee migration often drives support for anti-immigration agendas and right-wing parties in developed countries, particularly in affluent regions. In contrast, political effects in developing countries are more neutral or context-specific, with positive outcomes linked to increased humanitarian aid and service provision. Finally, host communities’ attitudes and perceptions toward refugees are shaped by factors such as cultural proximity, economic competition, and historical exposure to migration.

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