Syrian refugees and the economy

For a while it looked like the populations of developed countries would be more willing to provide refugee status to Syrians.

However, that hope was short lived, and the final remnants of it vanished with the Paris attacks. Soon after, Turkey and the EU signed a provisional agreement which stipulates Turkey’s hosting of Syrian refugees in return for 3 billion euros worth of funds and several other concessions. The reasons for the unwillingness of citizens of developed nations to embrace Syrians can be summarized in three ways: Syrians are not like them; they are “others” in every imaginable sense. Secondly, they will increase crime rates, particularly terror-related ones. Finally, they will be of great expense to the public financially and take jobs from local populations. Although these worries are understandable, careful empirical studies suggest that they are not always true. American economist Michael Clemens, who specializes in migration issues, defines anti-refugee hysteria as “missing facts.” For example, on the relationship between crime rates and refugees, he states: “Scholars have studied immigrants for decades and have found no statistical connection between immigration and crime in general or violent crime in particular. There is no evidence that refugees are any different. You are at least as much at risk from your current neighbor as you are from any resettled refugee. … Attacks in the United States by home-grown terrorists like Michael Page are responsible for five times as many deaths as attacks by American Muslims, according to Professor Charles Kurzman of the University of North Carolina.”

The worry about the effect of migrant influxes on government budgets seems to be overblown as well. An Organization for Economic Co-operation and Development (OECD) policy note released last month estimated that the cost of Syrian refugees to government budgets would be less than 1 percent of gross domestic product (GDP), even for countries like Turkey. Moreover, these extra expenditures would boost aggregate demand and in return might have a positive impact on income growth and public finances. The same report also suggests that the impact of Syrian refugees on labor markets would be negligible. There are also many studies which show the overall positive effect of migrant workers on receiving country economies since most migrant workers are very hard working. However, in some cases the integration of migrants into the social structure of a receiving country proved difficult even in the long run. Naturally, when migrants are unable to integrate into a host country they cannot contribute to its economy, either, though positive outcomes are common enough to be optimistic.

Moreover, Kalena Cortes of Princeton University has shown that the positive contributions of refugees to host countries are greater than immigrants who migrate for economic reasons. According to Dr. Cortes’ analysis, refugees adapt to life in a host country faster than economic migrants. They overcome language barriers more effectively, spend more on education and increase their earnings faster than economic immigrants. As a result, we have more reason to believe that Syrian refugees would contribute more to host countries and integrate better into their social fabric than regular migrant workers. However, it looks like Europeans do not want Syrians with refugee status and expect Turkey to keep them at bay. The EU wants Turkey to provide a more hospitable environment for Syrians in Turkey so that they do not push the gates of Europe. Included in the EU wish list is a work permit for Syrian “temporary guests” and the provision of legal status for Syrian migrants in Turkey. The establishment of special safe zones within the borders of Turkey is recommended by Western academics and policy circles. In these safe zones, special rules would be implemented to enable Syrian enterprises to flourish. Moreover, more robust border security has also been demanded of the Turkish government.

Although the pro-refugee arguments I summarized are also true for Turkey, I have several reservations. First, although Syrians are culturally closer to Turkish people than they are to the citizens of European nations, the sheer number of them will make it very difficult for them to integrate into Turkey. Furthermore, it is highly probable that Turkey will have political problems with the new country(ies) or new regime(s) established in Syria after the civil was is settled. Thus, a large Syrian population in Turkey would create credible threats to Turkey. On the economic front, Turkey is poorer than many other European countries. The Turkish government does not have as much money as European governments to spend on refugees. With regards to the labor market, the timing is very bad. The Turkish government is planning to increase the minimum wage rate by 30 percent very soon. Many are afraid that this will increase rates of employment in the informal sector. The existence of millions of Syrians can make things worse in this respect.

I believe that embracing Syrians migrants is not only an ethical requirement but also good for the economies of Turkey as well as Europe. However, letting Syrians work in Turkey and opening a special safe zone in Gaziantep is not enough. We should also allow them to work in European cities and open similar safe zones in places like Munich, Milan, Birmingham and Marseille.