Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 5-2018: Should I Stay or Must I Go? Temporary Protection and Refugee Outcomes

Matilda Kilström , Birthe Larsen () and Elisabet Olme
Additional contact information
Birthe Larsen: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark

Abstract: We study a Danish reform in 2002 that lowered the ex ante probability of refugees receiving permanent residency by prolonging the time period before they were eligible to apply for permanent residency. Assignment to the new rules was completely determined by the date of the asylum application and the reform was implemented retroactively. We formulate a simple search and matching model to derive predictions that can be tested using our data. Then we study the effects on educational and labor market outcomes and find that the reform significantly increased enrollment in formal education, especially for females and low skilled individuals. In terms of employment and earnings, coefficients are in general negative but non-significant. Other outcomes of interest are also studied. The reform had a negative impact on criminal activity driven by a reduction among males. There are no effects on health outcomes and significant but relatively small negative effects on childbearing for females. The results do not seem to be driven by selection, since the reform had no significant effect on the share that stayed in Denmark in the long run.

Keywords: refugees; human capital; immigration law

JEL-codes: J15; J24; J61; K37

62 pages, May 9, 2018

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