Taking in refugees may be the right thing to do, but what chance to they have to achieve the American dream? A new study gives us the details.
Whether because of war, climate change or persecution, 21 million refugees are adrift in the world, according to the United Nations. Under President Barack Obama and his predecessors, America welcomed large numbers. For example, the Obama administration committed to accepting 110,000 Syrian refugees this fiscal year, a 57 percent increase over fiscal 2015. (The Syrian war and drought have produced 4.8 million refugees since 2011.)
Under President Donald Trump’s “America First” agenda, this number will surely be rolled back. Trump’s attempt to impose a 120-day hold on all new refugee admissions has been blocked by federal courts. Still, the number of those entering the country has dropped sharply.
Between arguments over morality vs. nationalism (and fears of importing radicals), we know surprisingly little about the economic effects of refugees. (My colleague Daniel Beekman profiled some refugees in Washington last month). Most economists agree that immigrants are a net plus for the economy, but that looks at a much larger segment of the population than refugees.
University of Notre Dame professors William Evans and Daniel Fitzgerald advance our understanding with a new paper filed with the National Bureau of Economic Research. They used the invaluable data from the Census Bureau’s American Community Survey (hope the new administration doesn’t kill it).
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The findings are mixed. Resettlement costs are real, but over time most refugees more than repay them. Evans and Fitzgerald write, “Most economic outcomes such as employment and earnings improve as refugees age in the country, while enrollment in government transfer programs tends to decline considerably over the same period.” After six years in the country, most refugees have higher labor force participation rates and employment that native-born Americans.
Over their first 20 years, refugees pay an estimated $21,000 more in taxes than government benefits they receive.
On the other hand, most never rise high on the economic ladder. This is partly because of language barriers. Another is lower educational attainment. The younger the refugees when they arrive, the better their chances of economic advancement. Still, “they never earn as much on average as similarly-aged natives.”
It will be interesting to see long-term, inter-generational results. In the past, the children of low-skilled immigrants went on to become business owners or factory foremen, and their grandchildren members of Congress and CEOs. That was an America with a ladder up. Now, many of the rungs have been pulled out.
Today’s Econ Haiku:
Seattle’s new tax
Would sprinkle, not soak, the rich
If courts don’t drown it