IMF urges EU to open job market to refugees
The tide of Middle East refugees should boost European economic growth over the short term, but their longer-term impact will depend on efforts to integrate them, the IMF said on Wednesday. In a new study to be presented at the World Economic Forum in Davos, Switzerland this week, the International Monetary Fund (IMF) said that governments making strong efforts to bring refugees into the workforce can lessen the chance that they will become a burden on the state budget. "Quick labour market integration can unlock the potential economic benefits of the refugee inflow," said the IMF study, "The Refugee Surge in Europe: Economic Challenges."
"It would also minimise the risk of social exclusion for the newcomers and maximise their net contribution to the public finances in the longer term." The report comes as governments across Europe wrestle with the political, social and economic implications of admitting huge numbers of migrants fleeing the conflicts in Syria and elsewhere.
More than one million refugees flooded into Europe last year seeking asylum, and in many countries, the administrative appa- ratus for handling such a large influx is overwhelmed.
Focused solely on the economic impact, the IMF study said economies in countries receiving the migrants would grow more at the initial stage, due to public spending to accommodate them. That could add 0.1 percentage point to GDP growth by next year over the 28-nation European Union, but more in the countries with the largest numbers of newcomers.
However, the IMF said: "In the long run, the economic impact will depend on the speed of integration of refugees into the labour market." The study acknowledged the deep worries over the possibility of migrants taking away local jobs, especially in a period of already elevated unemployment.
But it said studies of previous episodes of migrant influx show that the impact is usually not that substantial on opportunities for native workers. "Past experience with both economic and humanitarian immigration indicates that adverse effects on wages or employment are limited and temporary, possibly because of low substitutability between immigrants and native workers." But there is a possible exception in the case of Syria, in that a large percentage of the refugees is well-educated, with one-fifth reporting having tertiary educations.