Events at CERGE-EI

Gabriel Ulyssea, Ph.D.

University of Oxford, United Kingdom

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Abstract: The Syrian war has generated the largest flow of war-displaced people since World War II. Turkey alone has received over 2.8 million Syrian refugees, making it the largest host country in the world. This massive inflow of refugees has two distinguishing features. First, refugees were not granted work permits until 2016 but had high employment rates. Their arrival therefore represents a well-defined informal labour supply shock. Second, these inflows were heterogeneous across regions, with a substantial variation in the magnitude of the shock. We develop and estimate a quantitative spatial model to assess the micro and macro effects of this sudden and massive migration wave. We combine SMM and direct estimation from micro data to characterize the pre-shock, baseline Turkish economy and use the estimated model to perform counterfactual exercises. The results show that the inflow of Syrian refugees induces an increase in informality among low skill workers, but also generates both a reduction in informality among high skill workers and a rise in the skill premium. Furthermore, while the regions receiving larger numbers of refugees experience larger effects, the shock spreads to all regions due to regional migration of native workers.
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