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Giovanni Hermosillo
Economic Implications of the Syrian Refugee Crisis
University of Texas at El Paso
BUSN 3304

Economic Analysis: Refugee Crisis

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The economic effects of the refugee crisis can be simply summarized in three main areas.
To begin with, the short term effect that is most prominent is the increase in social spending that
a country must partake in order to welcome these individuals. Then, there is the issue of how the
migrants alter the local job market. Do they take jobs away as many individuals argue? It
actually depends. There is research that argues that it might yet there is other that finds that
migrants work jobs that are undesirable to locals. Yet, maybe both implications can occur. On a
more positive note, migration increases aggregate demand. New immigrants are potential sources
of revenue and markets for services. The article Admitting Syrian Refugees is Good Economics
states, according to the theory of economic agglomeration, population density encourages
companies to relocate to a region in order to gain access to customers (Smith, pg.1). The graph
below shows Syrian refugees as % of population per country accepting over 100 refugees.

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In the Business Insider article titled, The economic impact of Europes refugee crisis,
the author Jeffrey Kleintop describes the impact. First, there would occur a short term economic
boost from increased government spending. There is an increase in government spending to aid
the humanitarian effort and increase infrastructure to secure national borders. Second, increase
the number of working age adults and therefore achieve higher levels of economic growth.
Thirdly, the resurgence of far right political parties is outweighed by charitable citizenry who
have voted against major right wing parties. This has been seen in both Norway and Greece.
Fourth, a resolution to the conflict in Syria caused by the increase government involvement
generated by the refugee crisis. Fifth, the integration and solidification of the European Union as
they encounter and solver problems. The author concludes, the economic impact of the refugee
crisis is likely to be modest in the short and long-termwe believe investors do not have much
to fear from Europes refugee crisis (Kleintop, pg.5). The graph below shows how immigrants
have made a net contribution to government and therefore a positive fiscal influence.

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Economics correspondent, Ferdinando Giugliano, agrees with Kleintop in that the long
term effects of the immigration influx are positive. In addition, Giugliano points out that
contrary to popular perception they (i.e. studies) show that asylum seekers do not depress the
wage of natives (Giugliano, pg. 2). On the contrary, natives seek higher paying jobs and do not
compete with the recent immigrants. Yet, this may not be true of all countries. It appears larger
and more developed nations have different effects to immigration as do smaller and less
developed nations. For example, Patricia Mouamar, advocacy and communications officer for
World Vision Lebanon says, if you talk to Lebanese, many say they have lost their jobs because
Syrians are willing to work for less (Mouamar, pg. 2). This would not correlate to what is seen
in Europe. Wolfgang Schuble, Germany finance minister stated the short-term costs are
manageable, while the long-term benefits are potentially substantial (Proctor, pg. 5). If the
problem is the same, i.e. immigration influx, then why are these countries having different
effects? The graph below demonstrates that education level also plays a role in the effect
immigration has on native workers. The higher the education level, the lower the effect of
immigration on wages.

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A difference between Europe and the Middle Eastern countries of Lebanon or Jordan is
that Europe faces a demographic problem that could actually be relieved by the increase in
immigrant population. Jonathan Portes, Director of the National Institute of Economic and Social
Research, states indeed, if it werent for migration, the EUs working age population would
already be shrinking (Portes pg. 2). In other words, Europe should accept the immigrants with
open arms as their fertility rate is so low. If more people are dying than they are being born then
the population must come from somewhere else if there is to actually be a population. Yet,
countries like Lebanon, Jordan, and Afghanistan do not face population shortages. The increase
in population to these countries is detrimental as they already face economic hardship and social
service shortages as it is. It is important to note that most refugees are in Lebanon and Jordan.

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Among researchers of the refugee crisis the danger of pro-immigration legislation is the
rise of far-right nationalist parties. The implication of far-right and nationalist parties would be
that of increasing spending on border security and limiting foreign immigration and aid. It is also
important to note that the effects on immigration are not the same in Europe as they are in the
Middle East. More developed nations are able to cope with social services such as health,
education, or waste management better than those who are already having issues dealing with
such basic services. Every nation has its own issues and economic implications to deal with
when an increase in population occurs. Currently, Germany leads the developed nations in
refugee resettlement.

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Bibliography

Connolly, Kate. "Refugee Crisis: Germany Creaks under Strain of Open Door Policy." The
Guardian, 8 Oct. 2015. Web. 3 Apr. 2016.

Economic Voice Staff. "CHART OF THE WEEK: Fiscal Effect of Immigration." The Economic
Voice, 6 Nov. 2013. Web. 3 Apr. 2016.

Guigliano, Ferdinando. "A Short-term Burden, Refugees May Yet Boost Sagging EU
Economy." Financial Times (2015): 1-4. Web. 3 Apr. 2016.

Kleintop, Jeffrey and Charles Schwab. "The Economic Impact of Europe's Refugee Crisis."
Business Insider (2015): 1-6. Wed. 3 Apr. 2016.

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Matthews, Dylan. "Five Things Economists Know about Immigration." The Washington Post, 29
Jan. 2013. Web. 3 Apr. 2016.

Mouamar, Patricia, Laura Sheahen, and Dawn Chatty. "Viewpoints: Impact of Syrian Refugees
on Host Countries." BBC. N.p., 24 Aug. 2013. Web. 3 Apr. 2016.

Nixon, Simon. "Politics Hold Sway in Economic Impact of Europes Refugee Crisis." The Wall
Street Journal (2015): 1-2. Web. 3 Apr. 2016.

One Europe. "Infographic: Germany Comes First for Syrian Refugee Resettlement." One
Europe, 17 Nov. 2014. Web. 3 Apr. 2016.

Portes, Jonathan. "Immigration Is Good for Economic Growth. If Europe Gets It Right, Refugees
Can Be Too." The Huffington Post. TheHuffingtonPost.com, 2015. Web. 3 Apr. 2016.

Proctor, Keith. "Syria's Refugees Are a Golden Opportunity for Europe."Fortune Syrias
Refugees Are a Golden Opportunity for Europe Comments. N.p., 15 Sept. 2015. Web. 3
Apr. 2016.

Sharma, Rakesh. "The Economic Costs of Europe's Migrant Crisis."Investopedia. N.p., 21 Sept.
2015. Web. 3 Apr. 2016.

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Smith, Noah. "Admitting Syrian Refugees Is Good Economics." Bloomberg View (2015): 1-2.
Web. 3 Apr. 2016.

Swanson, Ana. "The Big Myth about Refugees." Washington Post. The Washington Post, 2015.
Web. 3 Apr. 2016