Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

Economists On The Refugee Path

Robert Shiller 22nd January 2016

Robert Shiller

Robert J Shiller

Today’s global refugee crisis recalls the period immediately after World War II. By one contemporary estimate, there were more than 40 million refugees in Europe alone. These “displaced persons,” as they were called at the time, were forced to flee their homes because of violence, forced relocation, persecution, and destruction of property and infrastructure.

The dire postwar situation led to the creation in 1950 of the United Nations High Commissioner for Refugees, which was expected to serve only a temporary mandate, protecting displaced people for three years. But the problem never went away. On the contrary, the UNHCR is not only still with us; it is sounding an alarm.

In its 2015 mid-year report, the agency put the number of “forcibly displaced” people worldwide at 59.5 million at the end of 2014, including 19.5 million internationally displaced, which they define as true refugees. Some countries – Afghanistan, Azerbaijan, Colombia, Central African Republic, Democratic Republic of Congo, Iraq, Myanmar, Nigeria, Pakistan, Somalia, South Sudan, Sudan, Syria, and Ukraine – each accounted for more than a half-million forcibly displaced people at the end of 2014. The report noted that the total number had certainly grown substantially since.

Unfortunately, the report underscores the incompleteness of our understanding of the refugee problem. In fact, throughout history, the fate of refugees seeking asylum in another land has largely been unstudied. Historians record wars, and they mention diasporas, but they rarely show much interest in how refugee crises arose or were resolved.

To the extent that history is written by the victors, that is not surprising. The knowledge that one’s country terrorized a minority to the point that its members had to flee, or that a substantial share of one’s forebears arrived in defeat and panic, is not exactly an inspiring source of national identity. So the stories, unheard and untold, are lost.

That is why we need more research on what can and should be done for refugees in the long term. The UNHCR has been doing an important job in protecting refugees, but it cannot possibly address their needs alone. Its budget of $7 billion in 2015 may seem large, but it amounts to only about $100 per displaced person – not enough to cover even essentials like food and shelter.

As President of the American Economic Association for 2016, I felt a moral obligation to use our annual meeting earlier this month as a setting in which to bring attention to serious economic problems. And the refugee crisis, whatever else it may be, is an economic problem. But a dearth of papers addressing it had been submitted to the meeting. So I decided to create a session entitled Sixty Million Refugees, and invited some of our discipline’s most distinguished scholars on migration. I asked them to describe the dimensions of the refugee problem in economic terms, and to propose some sensible policies to address it.

One of the papers, by Timothy J. Hatton of the University of Essex and Australian National University, examined refugee flows around the world, to see what drives them. Hatton confronts a popular argument against admitting refugees: that asylum-seekers are not really desperate, but are just using a crisis as a pretext for admission to a richer country. He finds that, contrary to some expectations, refugee flows are driven largely by political terror and human rights abuses, not economic forces. People in fear for their lives run to the nearest safe place, not the richest. There is no escape from the moral imperative to help them.

Semih Tumen of the Central Bank of Turkey presented evidence regarding the impact of the 2.2 million Syrian refugees on the labor market in the border region. Tumen’s paper, too, takes on an argument frequently used to oppose admitting refugees: that the newcomers will take locals’ jobs and drive down wages. He found that in the formal sector, jobs for locals actually increased after the influx of refugees, apparently because of the stimulative effect on the region’s economy. If further research backs up this finding, countries might actually welcome the inflow of labor.

Another paper, by Susan F. Martin of Georgetown University, described the arbitrariness of our current refugee procedures, calling for “legal frameworks based on the need for protection, rather than the triggering causes of the migration.” But formulating such rules requires some careful economic thought. The framers of a refugee system need to consider the rules’ incentive effects on the migrants themselves and on the governments of their countries of origin. For example, we do not want to make it too easy for tyrants to drive unwanted minorities out of their country.

Finally, Jeffrey D. Sachs of Columbia University detailed a major new system for managing refugees. Sachs is concerned with how such a system’s rules will shape the world’s economies in the longer run. He wants such a system to prevent encouraging a brain drain by enforcing a commitment to admitting low-skilled and desperate immigrants, not just those who are highly useful to the host country. Moreover, the rate of flow must be regulated, and economists need to develop a way to ensure equitable burden sharing among countries.

Under today’s haphazard and archaic asylum rules, refugees must take enormous risks to reach safety, and the costs and benefits of helping them are distributed capriciously. It does not have to be this way. Economists can help by testing which international rules and institutions are needed to reform an inefficient and often inhumane system.

© Project Syndicate

Robert Shiller

Robert Shiller, Professor of Economics at Yale University and Chief Economist at MacroMarkets LLC, is co-author, with George Akerlof, of Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism.

You are here: Home / Politics / Economists On The Refugee Path

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

energy transition,Europe,wind and solar Europe’s energy transition starts to speed upDave Jones
equality bodies,gender equality Setting standards for national equality bodiesEvelyn Collins
Pakistan,flooding,floods Flooded Pakistan, symbol of climate injusticeZareen Zahid Qureshi
reality check,EU foreign policy,Russia Russia’s invasion of Ukraine: a reality check for the EUHeidi Mauer, Richard Whitman and Nicholas Wright
permanent EU investment fund,Recovery and Resilience Facility,public investment,RRF Towards a permanent EU investment fundPhilipp Heimberger and Andreas Lichtenberger

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

The EU recovery strategy: a blueprint for a more Social Europe or a house of cards?

This new ETUI paper explores the European Union recovery strategy, with a focus on its potentially transformative aspects vis-à-vis European integration and its implications for the social dimension of the EU’s socio-economic governance. In particular, it reflects on whether the agreed measures provide sufficient safeguards against the spectre of austerity and whether these constitute steps away from treating social and labour policies as mere ‘variables’ of economic growth.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

The winter issue of the Progressive Post magazine from FEPS is out!

The sequence of recent catastrophes has thrust new words into our vocabulary—'polycrisis', for example, even 'permacrisis'. These challenges have multiple origins, reinforce each other and cannot be tackled individually. But could they also be opportunities for the EU?

This issue offers compelling analyses on the European health union, multilateralism and international co-operation, the state of the union, political alternatives to the narrative imposed by the right and much more!


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube