This report focuses on asylum seekers and refugees and presents a first assessment of the impact of the unexpected influx of these persons on the economies of the EU. Based on available information, the number of asylum seekers in the EU more than doubled between 2014 and 2015 to around 1.26 million people. Some recent studies show that the average level of education of asylum seekers is lower than that of natives, with a relatively high share of low-skilled people, and that the level of education of the population in the country where the asylum seeker has citizenship appears to be lower than in the country where the asylum seeker is a citizen. the EU Member States (1).
These trends have changed significantly since the introduction of new policies in spring 2016, in particular the implementation of the EU-Turkey statement of 18 March. This Institutional Paper considers the possible short- to medium-term economic impact of the recent large influx of asylum seekers.
CHARACTERISING THE ASYLUM SEEKERS ARRIVING IN THE EU
According to Article 2(b) of the Directive, "beneficiary of international protection" means a person who has been granted refugee status or subsidiary protection status as defined in points (e) and (g)". These trends have changed significantly since the introduction of new policies in spring 2016, such as the implementation of the EU-Turkey statement of 18 March. More than 85,000 asylum applications were submitted in Austria in 2015, which is about 1% of the total population.
Based on the country of origin and the so-called Koenigstein Key quota system, the asylum seeker will move from the initial reception facility to a. Although not part of the official asylum procedure, asylum seekers must also register at the local residents' 'registration offices' upon arrival at the responsible reception centre. On 13 July, the Commission presented proposals to complete the reform of the common European asylum system.
In its proposal, the Commission clarifies and makes the use of the concepts of safe countries mandatory. The German consensus, as summarized by the Organization for Economic Co-operation and Development (OECD) recent economic review of Germany, (22) is that "The educational level of most refugees appears to be low, although information on the qualification structure of the refugees is still scarce" . This means that in Afghanistan, the third most important country of origin for asylum seekers, 69% of the population is illiterate.
Data from the 2014 Labor Force Survey (LFS) Ad Hoc Module on Migrants (24) show that almost half of working-age refugees arriving in the EU in 2014 had low levels of education (44 %), compared to just over a third of other migrants (37%) and a quarter of natives (27%).
FISCAL ASPECTS OF MIGRATION
In 2017, the budgetary impact is expected to increase at a slower pace or to remain stable at 2016 levels, although this largely reflects the no-policy-change assumption used in the Commission's forecasts. The Treaty does not allow for specific treatment of one type of expenditure compared to others, but there is a flexibility embedded in the SGP that allows countries to accommodate exceptional expenditure related to unusual events beyond the government's control, both under the preventive and corrective parts of the pact. In its Communication on the overall assessment of Draft Budgetary Plans (DBPs) of 16 November, the Commission indicated its intention to use the .
As regards 2015, the Commission made a final assessment on a case-by-case basis, including the amounts in question, on the basis of observed data as provided by the authorities. The lower net impact reflects the fact that the government reallocated resources from the development aid budget to cover part of the increase in spending related to newly arrived migrants. For 2016, a final assessment, including the eligible amounts, will be made in spring 2017, based on the observed data as provided by the authorities.
In the medium term, the fiscal impact of migration tends to be low and it takes some time before it becomes positive for asylum seekers. On the other hand, migrant workers make a strong positive contribution to the host country's economy. For example, the Australian migration model highlights the importance of length of stay, as immigrants' outcomes tend to converge to those of natives over time.
In the long term, migrants can help strengthen fiscal sustainability - if they are well integrated.
ECONOMIC IMPACT
In addition, international capital mobility could lead to a shift in the labor demand curve, which could reduce or avoid the fall in incomes of indigenous workers. For the EU as a whole, the simulations are based on a number of technical assumptions, such as an additional increase of the EU population of 2.5 million over the period. The assumption on the number of asylum applications for 2016 has been revised compared to the simulations presented in the European Commission's Autumn 2015 Forecast to take into account the most recent policy actions, with special reference to the EU-Turkey Statement.
For Germany, the participation rate was assumed to gradually converge over the years to 60% in the high-skill scenario and to 40% in the low-skill scenario. Assuming a skills distribution similar to that of EU citizens (high skills scenario), GDP could be around 0.2% higher by 2017 in the EU compared to a baseline scenario. Turning to the second scenario, where labor force growth is based on low-skilled workers, the positive impact on growth is more limited.
In the model, a drop in wages compared to baseline brings the labor market back into equilibrium. The simulations indicate an increase in the level of GDP by 0.4-0.8 % by 2017, depending on the skill level assumed. If the influx consisted only of low-skilled workers, the impact on growth in the medium term would be reduced to 0.3-0.4 %.
Employment is projected to increase by around 1.3% in the high-skill scenario in 2020, compared to 0.6% in the low-skill scenario.
A COMPREHENSIVE POLICY RESPONSE
2014) find that a long stay in asylum accommodation (eg more than five years) had a negative impact on the labor market integration of refugees in the Netherlands. Inaccessible rental markets and the lack of social housing can limit not only the chances of finding suitable accommodation, but also of integrating into the labor market. Some of the labor market measures needed to facilitate the integration of migrants into labor markets would also improve the employment prospects of local workers.
This is the case, for example, with the strengthening of active labor market policies (APL) or measures to promote entrepreneurship among refugees. Conversely, measures aimed at improving the functioning of the labor market and reducing unemployment should benefit both domestic workers and refugees. Certain groups, such as family migrants who arrived earlier, may face challenges that are very similar to those of refugees – and addressing these challenges in the labor market can help both.
In particular, female non-employment is a major contributor to the employment gap between the non-EU born and native born, therefore a special focus on integrating women into the labor market seems indispensable, although this may be a challenge given cultural differences in the countries of origin of many asylum seekers. Recognizing that newly arrived asylum seekers face significant information barriers beyond language barriers, active labor market policies, job training, proactive job placement and coaching, as well as the establishment of entrepreneurial centers, can help migrants find work or become self-employed. To the extent that the skills and work experience of refugees are such that their marginal productivity is low, the overall labor costs when they enter the labor market may discourage hiring, sometimes even at minimum wage.
Among active labor market policies, wage subsidies paid to private sector employers have been found to be particularly effective in helping to integrate migrants into the labor market (63) and are considered the 'most effective' in improving the likelihood of refugees finding regular employment employment in Denmark. 64) Against this background, carefully designed employment subsidies, targeted programs designed to temporarily reduce the tax burden, or more gradual reductions in the withdrawal of benefits could significantly facilitate the gradual integration of refugees into the labor market.
CONCLUSIONS
Borjas J Grease Immigration the Wheels of the Labor Market?’, Brookings Papers on Economic Activity. Commissariaat-generaal voor de Vluchtelingen en de Staatlozen, Office of the Commissioner General for Refugees and Stateless Persons in Belgium, (website) www.cgrs.be. The European Agency for the Management of Operational Cooperation at the External Borders of the European Union (Frontex), Council Regulation (EC) 2007/2004.
European Commission, (2015), "Managing the refugee crisis: The state of play of the implementation of priority actions under the European Agenda on Migration" and annexes, COM final of 14.10.2015. European Commission, (2015), 'Proposal for a Regulation of the European Parliament and of the Council on a European travel document for the return of illegally staying third-country nationals', COM(2015) 668 final, dated 15.12.2015. European Commission, (2016), 'Communication from the Commission to the European Parliament and the Council on the state of implementation of priority actions within the European Agenda on Migration', COM(2016) 85 final, dated 10.2.2016.
European Commission, (2016), "Communication from the Commission to the European Parliament and the Council: Towards a reform of the Common European Asylum System and improving legal options for Europe", COM(2016) 197 final, dated 06.04.2016. Directive 2013/33/EU of the European Parliament and of the Council (2013), "Establishing standards for the reception of applicants for international protection (recast)", Official Journal of the European Union, 26 June 2013. EUROSTAT, Online Database on Asylum and Dublin Statistics , Statistical Office of the European Union Foged, M.
IMF Staff Discussion Note, (2016) 'Refugee growth in Europe: economic challenges', SDN Nr 16/2 Immigratie-en Naturalisatiedienst, Immigration and Naturalization Service, Netherlands Ministry of Security and Justice.
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