Thursday

30th Jun 2022

Magazine

Refugees will give EU economy a boost

  • Some refugees do dirty, difficult, dangerous and dull jobs, freeing locals to do higher-skilled jobs. (Photo: Tax Credits)

Welcoming refugees is not only a humanitarian act, it is also an investment that can yield significant economic benefits.

Investing €1 in welcoming refugees could yield nearly €2 in economic benefits within five years, said a Tent Foundation report.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Investing one euro in refugee assistance can yield nearly two euros in economic benefits within five years. (Photo: PROEDUCTUS BILDBANK)

It is authored by Philippe Legrain, a former economic adviser to the president of the European Commission.

The key message of the study is that policymakers and practitioners should stop considering refugees as a "burden" to be shared, but rather as an opportunity to be welcomed.

Calculations based on IMF data suggest that welcoming refugees would increase public debt by €68.8 billion between 2015 and 2020, but cumulative GDP over the same period would be €126.6 billion higher.

But that is not the only benefit from welcoming refugees.

"Ageing societies with a shrinking native working age population, such as Germany's, benefit from the arrival of younger refugees whose skills complement those of older, more experienced workers. Refugees can also help care and pay for the swelling ranks of pensioners," read the study.

Legrain says it is a common misconception that refugees' economic contribution depends on their skill level, with highly skilled refugees making a positive contribution and less-skilled ones having a negligible – or even a negative – impact.

Once they start working, some refugees do dirty, difficult, dangerous and dull jobs that locals spurn, freeing locals to do higher-skilled jobs that they prefer, his report concluded.

Business incentives

The real problem is rather that European countries have inflexible labour markets that privilege insiders at the expense of outsiders.

There is a spectrum of models for welcoming refugees to chose from.

At one extreme, the US gives refugees a burst of initial help, after which they are expected to fend for themselves.

At the other extreme, Sweden has traditionally provided refugees with generous social support, but made it hard for them to work.

While Sweden now focuses much more on getting refugees into work, barriers to employment remain high. But overall, the US is much more successful than European countries at getting refugees into work, the study found.

"Arguably, an ideal refugee welcome programme would combine the active assistance of the Swedish model with the job and enterprise opportunities of the US one," the report concluded.

Many provide the worst of both worlds: little help for refugees and high barriers to employment and enterprise.

Skills aren't much use without job opportunities. So refugees should be resettled in areas where there are jobs, not in areas where cheap housing is available and jobs aren't, recommended the report.

An opportunity to be welcomed

Yet, with so many positive indications of refugees bringing long term positive contributions to society, why are so many Europeans hostile?

"On the economic side, both the opponents of refugees and the supporters of refugees tend to believe they are cost. Opponents say it is a cost that we can't afford to bear and supporters say it is a cost that we have a duty to bear for humanitarian reasons," Philippe Legrain explained to EUobserver.

"And so they both talk about a burden and that is a misconception as the report documents."

"So they ought to be looking at this as an opportunity to be welcomed. You need to start changing the language to show refugees contribute."

However, he also recognised there were issues to add to the economic rationale, such as culture, security and terrorism.

"They need to be addressed separated," he said.

The report can be found here: Refugees work: A humanitarian investment that yields economic dividends.

This story was originally published in EUobserver's 2016 Business in Europe Magazine.

Click here to read previous editions of our Business in Europe magazine.

Sweden must put refugee women into work, OECD says

The Organisation for Economic Co-operation and Development says Sweden is a model for integration of refugees, but says more should be done to address housing shortages and support those with low labour skills as well as unaccompanied minors.

Magazine

What is European Business?

EUobserver, in its new Business in Europe Magazine, looks at business in the EU context

Magazine

The Business of Nature

The European Commission plans to unveil a new bioeconomy strategy on Thursday. EUobserver's third edition of Business magazine looked at the many aspects of the bioeconomy – the parts of the economy that use renewable biological resources.

Magazine

A sustainable death wish

No one can escape death. But choices over how one's body is disposed of could either lessen or increase your carbon footprint.

Magazine

Bioeconomy is a win-win strategy for Finland

"The big problem in the world today is a lack of resources and a lack of bio-diversity," says Finnish environment minister Kimmo Tiilikainen. His country plans to produce what the world needs the most.

Magazine

The Business of Nature

The European Commission plans to unveil a new bioeconomy strategy on Thursday. EUobserver's third edition of Business magazine looked at the many aspects of the bioeconomy – the parts of the economy that use renewable biological resources.

News in Brief

  1. Russia threatens Norway over goods transit
  2. Russia urges Nato not to build bases in Sweden, Finland
  3. New president for European Committee of the Regions
  4. Gas flows from Spain to Morocco, after Western Sahara row
  5. BioNTech, Pfizer test 'universal' coronavirus vaccine
  6. UK sanctions second-richest Russian businessman
  7. Hungary permits emergency supervision of energy firms
  8. Bulgaria expels 70 alleged Russian spies

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  2. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  3. Council of the EUEU: new rules on corporate sustainability reporting
  4. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  5. Reuters InstituteDigital News Report 2022
  6. EFBWW – EFBH – FETBBHow price increases affect construction workers

Latest News

  1. If Russia collapses — which states will break away?
  2. EU Parliament interpreters stage strike
  3. EU's post-Covid billions flowing into black hole
  4. Nato expands and reinforces on Russian flank
  5. EU Commission says it cannot find messages with Pfizer CEO
  6. EU ministers sign off on climate laws amid German infighting
  7. EU presidency still looking for asylum relocation pledges
  8. Finland and Sweden to join Nato, as Erdoğan drops veto

Join EUobserver

Support quality EU news

Join us