Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278313 
Year of Publication: 
2023
Series/Report no.: 
KOF Working Papers No. 510
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
Refugees, and immigrants more generally, often do not have access to all jobs in the labor market. We argue that restrictions on employment opportunities help explain why immigrants have lower employment and wages than native citizens. To test this hypothesis, we leverage refugees' exogenous geographic assignment in Switzerland, within-canton variation in labor market restrictions, and linked register data 1999-2016. We document large negative employment and earnings effects of banning refugees from working in the first months after arrival, from working in certain sectors and regions, and from prioritizing residents over refugees. Consistent with an effect of outside options on wages, removing 10% of jobs reduces refugees' hourly wages by 2.8% and increases the wage gap to similar host-country citizens in similar jobs by 2.2%. Furthermore, we show that restrictions reduce refugees' earnings even after they cease applying. Restrictions do not spur refugee emigration nor improve earnings of non-refugee immigrants.
Subjects: 
Labor market integration
migration
labor market policies
labor market institutions
monopsony
refugees
employment
wages
outside options
employment opportunities
JEL: 
J08
J31
J42
J61
J68
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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