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Friday, September 18, 2015

The Effect of Refugee Resettlement on Trade

While we are on the topic of refugees, let me follow up on my previous post by citing further evidence on the potential benefits of refugee resettlement to receiving countries. It appears that resettlement plays a big part in the formation of migrant networks, which in turn facilitate trade with origin countries.

Here's some evidence from Parsons and Vezina (forthcoming) using the exodus of Vietnamese boat people in 1975 as a natural experiment. They argue that refugees were exogenously allocated across US States during this period. 20 years after, the share of exports going to Vietnam were larger and more diversified in States which received a higher allocation of refugees:

We provide cogent evidence for the causal pro-trade effect of migrants and in doing so establish an important link between migrant networks and long-run economic development. To this end, we exploit a unique event in human history, i.e. the exodus of the Vietnamese Boat People to the US. This episode represents an ideal natural experiment as the large immigration shock, the first wave of which comprised refugees exogenously allocated across the US, occurred over a twenty-year period during which time the US imposed a complete trade embargo on Vietnam. Following the lifting of trade restrictions in 1994, the share of US exports going to Vietnam was higher and more diversified in those US States with larger Vietnamese populations, themselves the result of larger refugee inflows 20 years earlier.

Friday, September 11, 2015

Burden? What Burden?

A very smart, evidence-based piece from the Washington Post:
Refugees are often described as a "burden" for the countries they settle in. The usual thinking is that they are drain on limited government coffers and a weight on sluggish economies, but that countries ought to take them in for moral and legal reasons...

However, research that has looked at the effect of refugees around the world suggests that, in the longer run, this view is often wrong. From Denmark to Uganda to Cleveland, studies have found that welcoming refugees has a positive or at least a neutral effect on a host community's economy and wages. 
...Clemens cites a study by Kalena Cortes, a Texas A&M professor who followed refugee and non-refugee immigrants who arrived in the U.S. in the late 1970s. Cortes found that it took the refugees a few years to get on their feet. But soon the refugees were out-earning non-refugee immigrants, and adding more value to the economy each year than the entire original cost of receiving and resettling them.
Plus this factoid, you might have never known, on famous American refugees. And from that already illustrious list, you might also add Steve Jobs (son of Syrian refugee)
A long list of innovative and important Americans were refugees, including former Secretary of State Madeleine Albright, Jerry Yang of Yahoo, and Sergey Brin of Google. Andrew Grove, who fled Hungary at the age of 20, helped build the modern semiconductor industry at Intel, without which your iPhone wouldn't exist.
Also check out this graph on twitter by @henrysherrell. Among Australian migrants, those on humanitarian visas are most likely to be entrepreneurs in the future.