How Do Refugees Impact Labor Markets in the United States?

AP Photo/A.M. Ahad

November 29, 2018

Project Summary

Current crises around the world, from Syria to Venezuela, have displaced an estimated 25.4 million refugees. Historically, the United States has played a leading role in permanently resettling the world’s refugees, maintaining a refugee admission ceiling around 70,000 per fiscal year over the last two decades. However, the current ceiling has been lowered to 45,000 for fiscal year 2018, its lowest level in history. The global refugee population, by contrast, is growing.

At times, this reduction has been framed as a way to protect U.S. workers from foreign competition. The crux of the debate over optimal refugee flows largely comes down to determining the degree of substitutability between refugees and native workers. Refugees in the United States typically work low-paying jobs, which suggests that they are likely to compete with low-skilled workers and perform labor which complements the work of highly-skilled individuals. Therefore, holding all else constant, an increase in the supply of labor from refugees should worsen labor market outcomes for low-skilled native workers while improving the circumstances of high-skilled native workers. That accepting refugees may cause some U.S. workers to lose jobs or face wage reductions has been the basis for many criticisms of refugee resettlement. The findings from empirical research, however, are not so cut-and-dry.

This paper summarizes the academic research on the impact of refugees on labor markets in the United States. In short, workers in U.S. labor markets are dynamic and adapt in multiple ways to the entrance of refugees. Most estimates find no negative effects on native workers from influxes of refugees. The paper analyzes the localized effects of the influx of thousands of Cuban refugees to Miami in 1980, takes a holistic perspective and examines the aggregate effects of refugees on the U.S. labor market, and concludes with a discussion of the policy implications of existing research.

Project Authors

Josh T. Smtih