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Economic integration of refugees into their host
country is important and benefits both parties
Refugee migration has increased considerably
since the Second World War, and amounts to more than 50 million refugees.
Only a minority of these refugees seek asylum, and even fewer resettle in
developed countries. At the same time, politicians, the media, and the
public are worried about a lack of economic integration. Refugees start at a
lower employment and income level, but subsequently “catch up” to the level
of family unification migrants. However, both refugees and family migrants
do not “catch up” to the economic integration levels of labor migrants. A
faster integration process would significantly benefit refugees and their
new host countries.
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The European migration crisis of 2015–2016
exposed weaknesses in the asylum system that have been only partly
addressed
The migration crisis of 2015–2016 threw the
European asylum system into disarray. The arrival of more than two million
unauthorized migrants stretched the system to its breaking point and created
a public opinion backlash. The existing system is one in which migrants risk
life and limb to gain (often unauthorized) entry to the EU in order to lodge
claims for asylum, more than half of which are rejected. Reforms introduced
during the crisis only partially address the system's glaring weaknesses. In
particular, they shift the balance only slightly away from a regime of
spontaneous asylum-seeking to one of refugee resettlement.
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Benefiting from highly skilled immigrants
requires a complementary mix of immigrant selection and economic integration
policies
There is increasing global competition for
high-skilled immigrants, as countries intensify efforts to attract a larger
share of the world's talent pool. In this environment, high-skill immigrants
are becoming increasingly selective in their choices between alternative
destinations. Studies for major immigrant-receiving countries that provide
evidence on the comparative economic performance of immigrant classes
(skill-, kinship-, and humanitarian-based) show that skill-based immigrants
perform better in the labor market. However, there are serious challenges to
their economic integration, which highlights a need for complementary
immigration and integration policies.
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Liberalizing access to citizenship improves the
economic and social integration of immigrants
The perceived lack of economic or social
integration by immigrants in their host countries is a key concern in the
public debate. Research shows that the option to naturalize has considerable
economic and social benefits for eligible immigrants, even in countries with
a tradition of restrictive policies. First-generation immigrants who
naturalize have higher earnings and more stable jobs. Gains are particularly
large for immigrants from poorer countries. Moreover, citizenship encourages
additional investment in skills and enables immigrants to postpone marriage
and fertility. A key question is: does naturalization promote successful
integration or do only those immigrants most willing to integrate actually
apply?
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It is vital to measure language proficiency
well, as it crucially determines immigrants’ earnings
Over recent decades, Western countries have
admitted many immigrants from non-traditional regions (e.g. Philippines,
India, China), which has coincided with poor economic integration. Language
proficiency is an important determinant of economic integration; in addition
to being a component of human capital, it plays a key role in facilitating
the transmission of other components of human capital. Examining the
strengths and weaknesses of objective and subjective measures of language
proficiency is crucial for good integration policy, as is understanding the
relationship between these measures and earnings, a key indicator of
economic integration.
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Enforcement deters immigration but with
unintended consequences
Border enforcement of immigration laws raises the
costs of illegal immigration, while interior enforcement also lowers its
benefits. Used together, border and interior enforcement therefore reduce
the net benefits of illegal immigration and should lower the probability
that an individual will decide to illegally migrate. While empirical studies
find that border and interior enforcement serve as deterrents to illegal
immigration, immigration enforcement is costly and carries unintended
consequences, such as a decrease in circular migration, an increase in
smuggling, and higher prevalence of off-the-books employment and use of
fraudulent and falsified documents.
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Where STEM immigrants were educated strongly
influences their economic success and possibly their impact on
innovation
Canada, the US, and most Western countries are
looking to STEM (science, technology, engineering, and mathematics)
immigrants to boost innovation and economic growth. Canada in particular has
welcomed many STEM immigrants over the past quarter of a century. In the US,
there is an ongoing debate about whether the H–1B visa program is being used
effectively to attract more STEM immigrants. Interestingly, significant
differences exist between the two countries in earnings and likely the
innovation activity of highly educated immigrants, which highlights the
likely role of immigration policy in determining such outcomes.
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With rising international migration, how
transferable are benefits, and how can transferability be increased?
The importance of benefit portability is
increasing in line with the growing number of migrants wishing to bring
acquired social rights from their host country back to their country of
residence. Failing to enable such portability risks impeding international
labor mobility or jeopardizing individuals’ ability to manage risk across
their life cycle. Various instruments may establish portability. But which
instrument works best and under what circumstances is not yet
well-explored.
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Sustained economic growth led to reduced
unemployment and real earnings growth, but prosperity has not been equally
shared
Since 1991, the Australian economy has
experienced sustained economic growth. Aided by the commodities boom and
strong public finances, the Australian economy negotiated the global
financial crisis without falling into recession. Over this period there were
important structural changes, with increasing labor force participation
among the elderly and the continuing convergence of employment and
unemployment patterns for men and women. However, some recent negative
trends include a rise in unemployment, especially long-term unemployment, a
deteriorating youth labor market, and a stagnant gender earnings gap.
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The world’s second largest economy has boomed,
but a rapidly aging labor force presents substantial challenges
China experienced significant economic progress
over the past few decades with an annual average GDP growth of approximately
10%. Population expansion has certainly been a contributing factor, but that
is now changing as China rapidly ages. Rural migrants are set to play a key
role in compensating for future labor shortages, but inequality is a major
issue. Evidence shows that rural migrants have low-paying and undesirable
jobs in urban labor markets, which points to inefficient labor allocation
and discrimination that may continue to impede rural–urban migration.
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