Saving Syrian Refugees Won't Hurt the Economy

The economic evidence is in, says Matthew La Corte in this guest post: Doing the right thing doesn’t cost anything in the long-run.

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New Zealand plans to take an extra 600 Syrian refugees over the next two-and-a-half years. The US plans to resettle 10,000 Syrians next year. Many eye that news with concern. Critics fear that refugee resettlement, though a compassionate program, will prove to be a far too costly endeavour.

Yet economic evidence clearly suggests that, despite upfront costs, the long-run impact of resettlement will be neutral — and could actually trigger modest economic stimulus.

From a humanitarian angle, it is hard to argue against resettling Syrians. Seven and a half million Syrians have been internally displaced, and 4 million externally displaced since 2011. Over 200,000 civilians have been killed since the onset of the civil war four years ago. Life expectancy has dropped by 20 years, and 80 percent of Syrians now live in poverty.

Resettlement is one of the only ways to save refugees from a nightmare situation back home.

Fiscal conservatives, however, worry that an influx of refugees will dramatically strain government budgets and take jobs from local citizens. These are understandable concerns. Yet current case studies largely alleviate them, making the case against resettling refugees substantially weaker.

Take Lebanon, for example. Since 2011, the country has taken in more than a million refugees. The World Bank found their economy has continued to grow, despite the influx. In 2013, real GDP increased 0.9 percent. In 2014, it increased 2.0 percent. For 2015, projections find an increase of 2.5 percent.

In Jordan, where over 600,000 Syrians have been resettled, the International Labour Organization reports that unemployment rate has remained virtually unchanged.

In Turkey, where more than 1.8 million Syrians have been resettled, the World Bank found a small displacement of low-educated workers. However, the World Bank also reported that the inflow of refugees created new, higher-wage jobs, allowing for the “occupational upgrading of Turkish workers,” and increased the earnings for the average native worker.

Between 1994 and 2008, Denmark resettled over 80,000 refugees from Yugoslavia, Somalia, Iraq, and Afghanistan. During that time, lower-skilled refugee workers pushed native Danes into higher-wage jobs, resulting in a positive effect on wages and employment opportunities.

Lebanon, Jordan, Turkey and Denmark are countries with moderate-sized economies. When it comes to resettling refugees into larger economies, the numbers are even more impressive, because these economies are more adept at leveraging refugee skills. Oxford Economics, a UK-based forecasting and analysis firm, finds that if Germany accepts a million refugees in the next three years, its GDP would jump by 0.6 percent by 2020.

What’s more, Syrian-Americans that currently live in the US have outpaced other Americans in terms of earnings.

Syrian-Americans are a good proxy for what Syrians can do in a new country when unencumbered by the war and disaster of their own. The Cato Institute’s Alex Nowrasteh found that Syrian-Americans have a median household income of over $65,000, which is $10,000 more than the native-born median household income.

When refugees resettle in the US, they start businesses, make existing businesses better and spend money on goods and services, all driving further economic activity. Refugees and their families pay taxes that bolster government budget at all levels. Refugees also tend to be younger than native-born citizens and are prone to having large families, good news for a country with a declining birth rate and deteriorating worker-to-retiree ratio.

And if the upfront costs are considered too high, using private sector funding and sponsorship options for refugee resettlement is always an option. In fact, Canada’s private refugee program has helped resettle more than 230,000 refugees since 1978.

Finally, the 600 Syrians to resettle in NZ represent just 0.015% of the total NZ population; the 10,00 to resettle in the US in 2016 represents just 0.003 percent of the total US population (which would be just 0.25% of the NZ population). The argument that, even given the figures given above were wrong, that such a small and diffuse uptick in population would harm native-born employment prospects is far-fetched at best.

Images of desperate, bedraggled Syrian refugees pouring across borders might make it difficult to imagine they they’re capable of contributing to a high-tech, fast-paced economy.

But refugees are not homeless by choice. They are people with skills who have been pushed out of their homes by war, and are now working harder than most of us ever have to work, and in the most adverse conditions, simply to return to a semblance of productive, normal life.

Many refugees are driven, skilled, experienced workers. These are not people who aim to limp through life in a foreign land. These are people who will–and do—pull their weight.

Some refugees turn out to do spectacular things.

Former Secretary of State Madeleine Albright, Intel CEO Andrew Grove, Google cofounder Sergey Brin, and Yahoo co-founder Jerry Yang were all refugees. The American children of Syrian immigrants have a pretty impressive track record, too. If you’ve never heard of the award-winning Syrian-American novelist Mona Simpson, maybe you’ve heard of her Syrian-American brother, Steve Jobs.

Refugee resettlement is, at worst, economically neutral in the long run, and is unequivocally the most effective and humane way to handle the refugee crisis. And who knows? A Syrian refugee might just mastermind the next Yahoo or Google. Or give you your next job.

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Matthew La Corte is a Research Associate at the Niskanen Center where he focuses on immigration policy.
This post is based on articles at Anything Peaceful and the Niskanen Center.