Why Syrian refugees have no negative effects on Jordan’s labour market
By: Jackline Wahba
Forced displacement is a global challenge. The number of displaced people rose from 43m to 69m between 2007 and 2017, with the highest growth primarily due to the Syrian conflict, which started in 2011. Since then, more than 6.3m Syrians have fled to neighbouring countries and beyond. This humanitarian crisis has generated public sympathy as well as concern about the implications of such a massive flow of people.
Jordan, which shares a border with Syria, has experienced a substantial influx of refugees. Around 1.3m Syrians live in Jordan, which has a total population of just 6.6m. The impact of so many people on members of the host community is a subject of great importance and debate.
One area of particular concern tends to be the job market. Jordan gives a unique insight into this as it signed an agreement with the EU in 2016, agreeing to allow Syrian refugees to enter legal employment in return for humanitarian aid, financial assistance and trade concessions from the EU. Known as the Jordan Compact, I studied its effect on the Jordanian labour market with colleagues Belal Fallah and Caroline Krafft. We found that the compact did not have a negative effect on Jordanian jobs or wages.
Using data that represented the whole country, combined with information on where most refugees live (which is fairly concentrated in certain areas of the country), we were able to identify the effects that Syrians had on Jordanians’ job prospects by comparing Jordanians’ labour market outcomes before and after the Syrian influx.
We found that Jordanians living in areas with high concentrations of refugees had no worse labour market outcomes than Jordanians with less exposure to the refugee influx. This result held across all labour market outcomes, including unemployment levels, hours, wages and characteristics of employment (such as sector, occupation and whether the work was formal or informal).
Our findings contrast with most of the very recent literature on the impact of the Syrian refugee influx, which to date had been limited to evidence from Turkey. Here, research found that natives who were employed informally were affected by Syrian refugees. But the global literature generally finds a similar mix to our findings of refugees having no or small specific negative effects on native job markets. This could be due to the demographics of refugees in Turkey and the fact that refugees aren’t legally allowed to work there, among other reasons.
There are several reasons why the massive influx of Syrian refugees has had a minimal impact on the job situation in Jordan. The demographics of the Syrians in Jordan may have played an important role. Almost half are under the age of 15 and only 23% of Syrian refugees in Jordan are in the labour force (45% of men and 4% of women).
The aim of the Jordan Compact was to provide 200,000 Syrian refugees access to work permits and formal work. But the take up of work permits by Syrians has been very low. According to Jordan’s Ministry of Labour, by the end of 2017 only 87,141 work permits to Syrians were issued. This means there are few Syrians competing in Jordan’s (formal) labour market, making their effect on the labour supply relatively small.
Despite the massive inflow of Syrian refugees, the number of non-Syrian immigrants has not decreased in Jordan over the same period of time. According to Jordan’s 2015 population census, Jordan hosted an additional 1.6m non-Syrian foreigners. Other research has shown that Syrians mainly compete with economic immigrants in the informal sector where they don’t get given contracts, such as construction and some sales jobs. Here there is limited competition between refugees and Jordanians.
Demand and supply
The inflow of foreign aid has also been a potential mechanism for creating jobs for Jordanians. To help address the needs of the Syrian refugees, Jordan has received foreign aid from multiple sources. This aid has been channelled to help offset the budget deficit, finance public projects and support public services such as schools, hospitals and transport nationwide. Both direct assistance to refugees and aid to the government can create jobs, the latter disproportionately in the government and public sectors.
Finally, the increase in demand for public services by refugees, in particular education and health, has resulted in the Jordanian government increasing the provision of those services, which in turn increased the demand for workers (almost exclusively Jordanians) in these sectors.
Overall our results suggest that providing legal work opportunities to refugees is not detrimental to the native job market. The inflow of foreign aid to Jordan to assist with some of the needs of refugees, as well as the conditions of the Jordan Compact, which included aid and trade concessions and employment support for Jordanians, may have played an important role in creating labour demand for Jordanians. So it is vital to ensure sufficient resources and public services are in place to support refugees and the host economy.
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