Refugee Employment at the Margins

Hosting large numbers of displaced people is a challenge, and giving them a path to self-sufficiency is the key to their livelihood and success. As more countries open their borders to refugees, there is increasing evidence of the economic benefits that inclusive policies can bring.

TORONTO – In January, Ethiopia’s parliament ratified legislation that gives refugees unprecedented rights, including the right to seek employment and education, and to move freely outside the confines of refugee settlements. The United Nations High Commissioner for Refugees (UNHCR) praised Ethiopia for having “one of the most progressive refugee policies in Africa” – one that could serve as a model for others.

Refugee-hosting countries around the globe should follow the example set by countries like Ethiopia and Uganda, in particular by giving refugees better access to formal jobs and schooling, and by seeking to host them in communities rather than camps. Such an approach would not only boost refugees’ self-reliance and sense of inclusion, but also benefit host countries.

Action is urgently needed. According to UNHCR, an all-time record of 68.5 million people worldwide, including 25.4 million refugees, have been forcibly displaced as a result of persecution, conflict, or generalized violence. Because most refugees won’t be able to return home, they need to build livelihoods in their host countries to provide for themselves and their families. But they often lack the opportunities to do so, resulting in generations of undereducated and underemployed adults.

As matters stand, refugees often lack legal rights to enter the formal labor market, own property or a company, get business permits, open a bank account, or move freely outside refugee camps. Furthermore, less than one-quarter of the world’s refugees make it to secondary school, and just 1% progress to higher education, according to UNHCR. Those who do complete their education often lack the documents to prove it.

Hosting large numbers of refugees is a challenge. But as more countries open their borders to them, there is increasing evidence of the economic benefits that inclusive refugee policies can bring.

Uganda’s Refugee Act of 2006, for example, provides refugees with the right to work, plots of land, and access to schools and hospitals, while allowing them unrestricted movement. Moreover, the government ensures that aid or programs for refugees also help host communities, which receive about 30% of the benefits or resources of such schemes. These measures have stimulated economic growth by creating new markets and small businesses serving the wider community. Social integration and cohesion have improved too, with refugees increasingly seen as contributing members of their communities rather than a threat.

Several studies have highlighted the potential payoffs from such policies. Research from the Center for Global Development indicates that giving refugees access to the formal labor market boosts growth and tax revenues, potentially creates new jobs for host-country citizens, and reduces reliance on aid. In a similar vein, the International Monetary Fund has estimated that investing €1 in welcoming refugees yields nearly €2 in economic benefits for the host country within five years. And UNESCO’s 2019 Global Education Monitoring Report emphasizes that migrants and refugees have skills that can help transform the economies and societies of both their host and home countries.

Giving refugees a path to self-sufficiency is the key to their successful integration. Host-country governments should therefore focus on improving refugees’ access to education and formal employment. Education is critical. Without it, refugees will most likely lack the skills or training to contribute positively to the host country’s economy, even if they have access to the formal labor market.

Governments can take several helpful steps, starting with allowing refugees to attend local community schools. When refugees receive the same education as the host country’s citizens, they better understand and appreciate the local culture, which increases their chances of finding a job in the formal sector. In addition, governments should invest in development programs that strengthen refugees’ entrepreneurial skills and enable them to generate their own income.

Both governments and donors could help by training teachers, allowing refugees to teach, and investing in bridge programs that better equip refugee students to enter the workforce. More scholarship opportunities for refugees, and greater funding for schools within and outside refugee settlements, would also be welcome. Modest seed funding can go a long way toward helping refugee-owned businesses get off the ground.

Meanwhile, some companies and organizations – including WeWork, IKEA, and Starbucks – are developing innovative approaches to hiring refugees. Global organizations are tapping into networks of tech-savvy refugees and hiring them for online work. Some, such as Tent, encourage businesses to hire refugees and integrate them into supply chains where they live. Anecdotal evidence suggests that other firms provide refugees with internships, or with part-time contract positions that, in some cases, can pay as well as a standard full-time job.

Many governments are working to debunk the harmful notion that refugees are a burden on host countries. Countries such as Uganda and Ethiopia have shown that an inclusive approach benefits both refugees and their host countries. The world should learn from that example.

A version of this story was originally published in Project Syndicate.