Refugees and Other Forcibly Displaced Populations

When evaluating policies designed to improve the well-being of forced migrants and host communities, two critical questions arise. First, what distinguishes the challenges faced by forced migrants from other forms of poverty and vulnerability? Second, can lessons from social protection programmes for other vulnerable populations be effectively applied to forced migrants and their host communities? The answers to these questions lie in the unique vulnerabilities of forced migrants and the social cohesion challenges that can arise in host communities upon their arrival. Refugees are among the most vulnerable populations globally. They often arrive with no assets and face significant uncertainty about their rights, legal status, and access to social services. Many have endured traumatic events that led to their displacement and difficult journeys, resulting in a high prevalence of mental health issues. In their host communities, they frequently confront language barriers and discrimination, which compound their difficulties. These distinct challenges mean that social programmes may have varying levels of effectiveness for refugees compared to other vulnerable groups. This section summarises key research findings on policies designed to enhance forced migrants’ well-being and promote positive interactions with host communities. The section focuses on research focused on the case of refugees, where most evidence is available. 

Humanitarian support: Cash Transfers 

Evidence consistently demonstrates that cash transfers have short-term positive impacts on the well-being of refugees. These benefits include increased household consumption and expenditures (Hidobro et al. 2014, Özler et al. 2021, Altındağ and O'Connell 2023, Gupta et al. 2024), improved employment and wage prospects (LoPalo 2019, Quinn et al. 2024), reduced child labour, higher school enrollment (Lehrer 2010, Moussa et al. 2022, Black et al. 2022, Hızıroğlu Aygün et al. 2024) and enhanced psychological well-being (Quattrochi et al. 2022). Evidence from Kenya highlights the effectiveness of unconditional cash transfers in significantly improving subjective well-being (Siu et al. 2023). Longer programme durations further amplify these benefits, resulting in greater increases in consumption (Salti et al. 2022). However, research also indicates that the positive effects of cash transfers may not persist once the programmes end (Altındağ and O’Connell 2023). These findings underscore the importance of designing humanitarian programmes not just as temporary relief measures but as components of broader, medium- to long-term strategies aimed at achieving durable solutions. Pairing cash transfer programmes with complementary measures, such as labour market integration and initiatives that enhance self-reliance, can potentially improve their overall effectiveness and sustainability.

The Right to Work and Labour Market Integration for Refugees

Extensive evidence highlights the positive effects of labour market integration on the well-being of refugees. Employment not only provides economic stability but is also critical for maintaining positive mental health among refugees (Hussam et al. 2022). Programmes that facilitate labour market integration—such as those offering skill development, job search assistance, and language training—deliver substantial benefits for both refugees and their children. These benefits include better mental health, higher income, and improved educational outcomes (Marbach et al. 2018, Hvidtfeldt et al. 2018, Sarvimäki and Hamalainen 2016, Hainmueller et al. 2016, Battisti et al. 2019, Lochmann et al. 2019, Heller and Mumma 2023, Dalhberg et al. 2021, Foged and Van der Werf 2023, Foged et al. 2023, Arendt et al. 2024). Conversely, restrictive employment policies have long-term negative effects, with adverse labour market outcomes for refugees often persisting even after the restrictions are lifted (Ahrens et al. 2023). Policies that delay asylum processes exacerbate these challenges, resulting in significant long-term disadvantages in labour market outcomes for refugees (Hainmueller et al. 2016, Hvidtfeldt et al. 2018, Fasani et al. 2021).

Building on these findings, Colombia’s regularisation programme for Venezuelan forced migrants provides a compelling example of how enabling labour market access can yield widespread benefits. The programme, which granted forced migrants’ full mobility, work permits, and access to social services, significantly improved the well-being of forced migrants without adversely affecting host communities. Research shows no negative impact on Colombian workers’ employment, wages, or labour force participation (Bahar et al. 2021). Similarly, the programme had no significant effects on electoral outcomes or social cohesion, with voters largely indifferent to the policy (Rozo et al. 2023). On the other hand, forced migrants benefitted greatly, experiencing a 48% increase in per capita consumption, a 22% rise in monthly income, improved health outcomes, and enhanced resilience during the COVID-19 pandemic (Ibáñez et al. 2024, Urbina et al. 2023). Additional advantages included reduced crime incidence (Ibáñez et al. 2024)  and reduced fertility rates due to better family planning access and increased entrepreneurship among regularised migrants (Amuedo-Dorantes et al. 2023, Bahar et al. 2023). However, challenges remain. Many migrants sought regularisation primarily to access healthcare, leading to persistently low levels of labour market formalisation. Furthermore, issues like occupational downgrading continue to hinder progress (García-Suaza et al. 2024). 

Similarly, in Kenya, research by MacPherson and Sterck (2021) contrasts two refugee assistance models: the Kalobeyei settlement and the Kakuma refugee camp. In Kakuma, refugees were confined to camps with limited opportunities for income-generating activities, relying largely on in-kind food rations. In contrast, the Kalobeyei model embraced a development-oriented approach, replacing most in-kind food rations with mobile-money transfers through the Bamba Chakula system and encouraging small-scale agriculture. Refugees in Kalobeyei reported significantly better dietary diversity, improved food security, and higher calorie intake. Additionally, they expressed greater happiness and a sense of independence from humanitarian aid compared to those in Kakuma. However, despite these successes, the study found no significant effects on asset accumulation or non-food expenditures, underscoring the ongoing challenges of fostering broader economic self-reliance within restrictive refugee-hosting environments.

Programmes that integrate multiple support mechanisms also show great promise. In Uganda, Baseler et al. (2024b) evaluated a programme that combined cash grants with group-based business mentorship for micro-entrepreneurs, including refugees. These mentorship groups fostered peer support and information-sharing while offering incentives for collaborative success. Results showed significant improvements in business outcomes and profits, with mentorship providing added benefits, particularly for male participants. A similar approach in Denmark matched refugees to occupations facing local labour shortages and provided basic job training (Foged et al. 2022). This initiative increased refugee employment rates by 5–6 percentage points within the first year and by 10 percentage points after two years, proving particularly effective for male refugees and those with some secondary education. These findings demonstrate the potential of innovative, multi-dimensional programmes to address labour shortages while promoting economic integration.

Addressing Trauma: The Critical Role of Mental Health in Refugee Integration

A fundamental challenge for forced migrants worldwide is the high prevalence of mental health issues. These often arise from traumatic experiences in their countries of origin, perilous migration journeys, and the discrimination they face in host communities. Mental health is not only critical for the overall well-being of forced migrants but also essential for their successful integration into labour markets. Poor mental health has significant economic consequences, with recent research showing that a one-standard-deviation increase in psychological distress reduces refugees' probability of employment by nearly 12% and weekly earnings by over 20% (Dang et al. 2023). Addressing these challenges requires robust governmental support and targeted interventions to mitigate the negative effects of psychological distress and facilitate better integration outcomes.

Promising interventions are being developed to address these mental health challenges and improve outcomes for forced migrants and their families. Parenting and mental health support programmes have demonstrated considerable success in enhancing both caregiver and child well-being. For instance, a psychosocial programme for Rohingya refugee mothers in Bangladesh, which included psychoeducation and play-based activities, significantly reduced psychological trauma and depression among mothers while improving children’s cognitive, motor, and emotional development (Islam et al. 2024). Similarly, in Colombia, a programme targeting caregivers in conflict-affected settings showed that improving caregiver mental health directly enhanced early childhood development, fostering stronger child-caregiver interactions and reducing toxic stress among children (Moya et al. 2024).

To overcome stigma barriers to mental health care, innovative approaches have been developed. A field experiment with Syrian refugees in Jordan demonstrated the effectiveness of using peer “senders” to share information about mental health services. This approach significantly increased outreach by leveraging social cover, wherein senders disclosed financial compensation for sharing information, thus bypassing stigma (Smith 2024). Such interventions highlight the need to address both psychological and social barriers to accessing mental health care for displaced populations, ensuring that mental health services are both accessible and acceptable.

Bridging Divides: Strategies to Strengthen Social Cohesion in Refugee-Host Dynamics

Another significant challenge faced by forcibly displaced populations is the discrimination and negative attitudes they often encounter in host communities. These reactions create barriers to labour market opportunities, reduce access to education, and adversely affect mental health, compounding the vulnerabilities of displaced individuals. Addressing these challenges requires designing and evaluating policies that improve social cohesion between host communities and forced migrants, fostering environments where both groups can thrive.

Promising interventions to reduce stereotypes and foster inclusion have demonstrated significant potential across various contexts. For instance, programmes targeting biases in schools have shown meaningful impacts. Revealing implicit biases to teachers using Implicit Association Tests (IAT) has proven effective in reducing discriminatory grading behaviours. Teachers made aware of their own stereotypes adjusted their behaviour more significantly than those who received general debiasing messages, closing the grade gap between native and immigrant students (Alesina et al. 2024). Similarly, teacher training programmes focused on diversity awareness in Turkey nearly halved the absenteeism gap between native and refugee students, with the effects persisting into the next academic year. These findings emphasise the crucial role of education-based initiatives in promoting broader inclusion and fostering long-term awareness across school systems (Tumen et al. 2023).

Beyond education, framing information about humanitarian aid sources has emerged as a powerful strategy to shift perceptions. Research from Uganda and Kenya demonstrates that explicitly linking aid grants for host communities to refugee integration policies can improve host community attitudes toward refugees. This approach fosters greater acceptance and support for policies like work rights and freedom of movement (Baseler et al. 2024a). Empathy-driven interventions also show promise. Perspective-taking exercises, where participants imagine themselves in the shoes of refugees, significantly improved inclusionary behaviours, such as increased support for refugees in the United States (Adida et al. 2018). Similarly, in Colombia, online interventions using video narratives and interactive games enhanced trust and prosocial behaviours toward Venezuelan forced migrants, illustrating the scalability of low-cost, empathy-based approaches (Rozo and Rodríguez Chatruc 2024). While interesting the evidence around the effectiveness of perspective taking is based on survey experiments which has some limitations related to the perceived demand effects of respondents, for example. Future work should aim at testing prejudice reduction methods such as perspective taking in field settings.

The effectiveness of intergroup contact between displaced populations and host communities, however, remains mixed. In Mozambique, structured dialogue between internally displaced persons (IDPs) and local hosts significantly improved social cohesion. Participants in joint community meetings reported greater tolerance, reduced discriminatory attitudes, and strengthened mutual trust in both the short and medium term (Barros 2024). Conversely, in Afghanistan, a vocational training programme fostering prolonged intergroup contact through collaborative skill-building activities showed no measurable impact on locals’ attitudes or behaviours toward IDPs, even after extensive interaction. This underscores the difficulty of overcoming deeply entrenched stereotypes and resource competition in conflict settings, where sustained contact alone may be insufficient (Zhou and Lyall 2024).

Recent evidence also highlights the unintended consequences of aid programmes that exclude host communities. For example, in Jordan, a housing subsidy programme for Syrian refugees unintentionally strained relations with Jordanian neighbours. Visible improvements in refugee housing amplified perceptions of inequity, leading to a significant decline in social cohesion and increased resentment toward aid recipients (Tamim et al. 2024). By contrast, programmes that indirectly benefit host communities have mitigated such tensions. In Lebanon, cash transfer programmes boosted local spending, indirectly improving host community well-being and reducing anti-refugee hostility (Lehman and Masterson 2020). Inclusive programmes that directly benefit both refugees and host communities, such as those implemented in Mozambique, have also shown positive effects on trust and social cohesion. However, these gains remain fragile and vulnerable to external shocks, such as climate-induced disasters, which exacerbate resource scarcity and competition (Beltramo et al. 2023).

These findings underscore the importance of designing aid programmes that incorporate host communities as stakeholders. Inclusive approaches not only improve social cohesion but also enhance the sustainability of humanitarian interventions, reducing the risk of tensions and ensuring longer-term success.

Key Takeaways for Policymakers: Lessons from Second-Generation Evidence

Second-generation evidence underscores the importance of designing policies that move beyond short-term humanitarian relief to foster long-term resilience and integration. Humanitarian assistance, while essential for immediate needs, should be paired with initiatives that build economic self-reliance. Labour market integration has proven transformative, yielding higher incomes, better mental health, and reduced dependency on aid. Successful models, like Colombia's regularisation programme, show the potential for mutually beneficial outcomes for both migrants and hosts. Mental health challenges, a critical barrier to refugee integration, require targeted interventions that not only improve individual well-being but also enhance employability and community stability. Furthermore, inclusive policies that share the benefits of aid between refugees and host communities are vital for maintaining social cohesion. Examples from Uganda and Lebanon demonstrate that when both groups see tangible benefits, tensions diminish, and trust grows, highlighting the risks of exclusionary approaches that can exacerbate divisions.

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