The Refugee Crisis: Burden or Opportunity for Europe?

By Andrea Ursi and Thomas Rivera

The political discourse surrounding the refugee crisis has largely been focused on how to share the burden of the mass immigration of Syrian refugees to Europe. While it has been mentioned time and time again that immigration can have positive long-term effects, for example to combat the ageing population of Germany, these opportunities are often overshadowed by more short-term economic fears. One such fear is that a large influx of low skilled workers will create competition for low skilled jobs, pushing down wages and adversely affecting the natives who have fewer opportunities for work elsewhere. While such a concern is well founded, it is inherently a short-term phenomenon that can easily be counteracted through the appropriate government mechanisms. In fact, if the immigration of Middle Eastern refugees is handled correctly there seems to be far more opportunities to be gained for the natives of Europe than misfortunes. 

First, there is a lack of evidence that immigrants create any medium to long-term burden for the countries to which they migrate. Even for low skilled natives harboring fears of losing their jobs to migrants, a recent study points out that the workers most likely to be crowded out of the labor force are recent or foreign-born immigrants as they are the most likely to be substitutable for refugees in labor markets. In contrast, migrant workers can easily complement native workers by reducing costs of certain services, such as kitchen work, which makes it easier for businesses to expand, increasing demand for native services, such as waiting tables. Even as recent immigrants vie for low skilled jobs, they will simultaneously be increasing demand for domestic goods and services thereby creating the need for jobs throughout the entire spectrum of skill and ability. Interestingly, one study on U.S. immigration points out that, through this mechanism, immigration tends to increase wages for high skill jobs while having neutral effects on low skill pay.

IMG_6310Given this evidence, it is possible to assert that the refugee crisis can help to expand the European economy, even in the short-term, if supported by proper political solutions. Berlin has, however, recently changed its perspective toward migration, as evidenced by intentions expressed by Angela Merkel who was recently quoted as saying “We need to dramatically reduce the number of refugees this year because we need to integrate them.” This change came both as a result of the events of New Year’s Eve in Cologne and the reintroduction of border controls by some states, such as Sweden, Denmark, Austria, and other European states who have effectively imposed their own response to the refugee crisis while the European Union has been paralyzed over what to do.

If European countries do not quickly inact unified and coherent policies on immigration, they are likely to turn the arrival of migrants from opportunity to misfortune. These governments should work together to ensure the best results of assimilation by investing in infrastructure, education, hospitals, and public services. Such investments will help these states to both accelerate the economic recovery, which has been sluggish since the financial crisis, and to permit immigrants to be more involved in the labour force in exchange for favorable treatment.

It is well known that African and Middle Eastern migrants who come to Europe are culturally, religiously, and linguistically more different from the average European than, for instance, Syrian refugees are from the Turks or Jordanians. Therefore, unsuccessful integration could not only lead to the loss of the economic opportunities to be gained from immigration, but can transgress into serious problems for security. Without wanting to match migration and terrorism, it cannot be hidden that social decay conditions increase the risk of radicalization for outcast individuals. For these reasons, it is extremely important that Europe unifies in its approach to dealing with the refugee crisis and does so with haste.


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