Our paper “Lift the Ban? Initial Employment Restrictions and Refugee Labour Market Outcomes”, joint with Francesco Fasani and Luigi Minale has been conditionally accepted for publication on the Journal of the European Economic Association.
We assess the medium to long-term effects of employment bans on the labor market outcomes of refugees by gathering almost 30 years of data on the presence and length of employment bans across 19 European countries and combining them with cross-sectional information on refugees who arrived from 1985 onwards.
These are the key results:
1) Being banned from employment at entry reduces refugee employment probability in the medium run by 8.9 percentage points, or 15.2 percent. This negative effect is explained primarily by a 9.2 percentage point lower labor market participation rather than by a higher probability of being unemployed. This effect is quantitatively equivalent to about a 4-year delay in the integration process.
2) Exposure to longer bans has a larger negative effect than exposure to shorter ones, but the marginal effect of ban length is decreasing, implying that most detrimental effects are likely to materialize during the first months of the ban.
3) The negative effects of employment bans are highly persistent, with negative effects remaining sizeable up to 10 years post arrival despite growing smaller over time.