JOBS NOTES Issue No. 13 JOBS INTERVENTIONS FOR REFUGEES AND INTERNALLY DISPLACED PERSONS KEY MESSAGES ¬ Forcibly displaced people—refugees and internally ¬ Healthcare and psychosocial support can help displaced persons (IDPs)—often struggle to refugees and IDPs overcome trauma, improve their integrate into labor markets. outlook and integrate into labor markets. ¬ The forcibly displaced face significant and multiple ¬ Relaxing legal restrictions related to if, when, and obstacles: legal restrictions, loss of assets, physical how the forcibly displaced have the right to work, and mental health issues, skills mismatches, lack of move freely and obtain permanent residency status social networks and market information, excessive significantly improves labor market outcomes. labor supply, and discrimination. ¬ In terms of job matching, intensive coaching and ¬ Interventions to help the forcibly displaced access individualized assistance seem to help, but it is labor markets must address these multiple challenging to implement them cost effectively. constraints simultaneously. How important the ¬ Interventions to build social networks and overcome different obstacles are in practice depends on the spatial mismatches seem promising and require individual characteristics of those forcibly displaced further testing and evaluation. as well as their country of origin and destination. ¬ Rigorous evidence on effects of jobs interventions for ¬ Thorough assessment of labor market demand the forcibly displaced is scarce, and mainly comes and supply characteristics is especially important from high-income countries. More rigorous research to design effective interventions in the context of is needed in low and middle-income countries, forced displacement. Assessment needs to especially related to IDPs, demand-side interventions, include the legal context and perceptions and and longer-term outcomes from interventions. aspirations of the forcibly displaced. ¬ Making up for assets lost during displacement through cash injections seems particularly important. This Jobs Solutions Note is intended to identify practical solutions for development practitioners and policymakers to design and implement policies and programs for the labor market integration of refugees and IDPs. The Note (a) identifies the specific obstacles that refugees and IDPs face when integrating the labor market, (b) highlights interventions designed to address those barriers, focusing on the World Bank, and (c) summarizes existing knowledge on what works. It builds on a comprehensive literature review on Jobs Interventions for Refugees and IDPs, and is part of a broader work on Supporting Jobs in Fragility, Conflict, and Violence Situations. The Note uses a broad definition of jobs as any income source, formal or informal, including employment, self-employment and entrepreneurship.1 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 MOTIVATION: WHAT IS THE PROBLEM? in Uganda, 3 of 4 refugees are unemployed, twice the rate of hosts.3 In Ethiopia, aid is the major source The labor market outcomes of refugees of livelihood for over 80 percent of refugees after and IDPs lag behind locals and displacement, compared to less than 10 percent before economic migrants displacement, and only 22 percent of working-age refugees are employed.4 Refugee women have even Jobs are key for the nearly 80 million forcibly lower labor force participation and employment rates displaced worldwide to become self-reliant, than refugee men in the Kalobei refugee camp in re-build their lives, and integrate into the host Kenya.5 Large employment and wage gaps also exist communities and contribute to the economy. between refugees and hosts in Jordan, Lebanon, and Having a job allows individuals to obtain an income Turkey, and these gaps are even larger for refugee and meet their needs and the needs of dependents, women. Refugees who do have work are more likely offering a pathway out of poverty. It also gives a to be working informally compared to host country sense of purpose and allows one to feel he or she is counterparts, for example in Jordan and Lebanon.6 a contributing part of a community. This is also true for those forcibly displaced by conflict, violence, Evidence on IDPs also shows negative association persecution, and human rights violations. Of the between forced displacement and employment 79.5 million forcibly displaced people worldwide, rates and wages. Using propensity score matching 45.7 million are internally displaced in their own (PSM), a study finds that IDPs in Colombia who are countries, 26 million are refugees (including 5.6 million working receive significantly less wages, compared to Palestinians), 4.2 million are asylum seekers, and 3.6 those who moved due to reasons other than violence million are Venezuelans displaced abroad. About 85 (10–29 percent for male, and 18–37 percent for percent of all the forcibly displaced worldwide live female workers, depending on the matching method in low and middle-income countries. Many are in used).7 In Georgia, compared to local residents IDPs protracted displacement situations lasting more than are less likely to be in the labor force and more likely to five years. be unemployed and receive lower wages, sometimes even after 20 years of forced displacement.8 Rigorous studies on high-income host countries in Europe and the US consistently show that Worse labor market outcomes reflect refugees have lower employment rates and specific obstacles refugees and income than locals and take longer to integrate IDPs face into the labor market than economic migrants. The gap remains, even after accounting for different Laws and regulations limit the right to work for individual characteristics between refugees, locals a majority of refugees and some IDPs. The 1951 and economic migrants, such as mental and physical Refugee Convention grants refugees the right to health, lower level of education and language skills, work. Nevertheless, some countries completely legally gender and age. Female refugees have particularly low ban refugees from working, be it as an employee or employment rates. Refugee employment rates and starting a business. Other countries restrict refugees’ wages also vary by country of origin and destination. right to work, for example by limiting sectors and Over time, however, refugees can manage to narrow geographical areas in which refugees can work, or the the employment gap.2 number of refugees a firm can employ, or by requiring refugees to have a local partner when setting up a Statistics from representative cross-sectional business.9 Refugees also often must first apply for refugee surveys in low and middle-income a work permit. Even if refugees are legally allowed countries show a similar pattern of lower to work, the processes to obtain work permits and employment rates and wages, and higher register a business are in practice often confusing, likelihood to work in the informal sector. In cumbersome, and costly. As a result, many refugees Uganda, 54 percent of refugees report aid as their are not formally allowed to work. As citizens, IDPs main source of income. In Kampala, 74 percent depend are in principle not confronted with these legal on remittances as their main source of income. Even challenges, but restrictions exist.10 if the legal and policy framework is very conducive 2 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 Besides the right to work itself, a complex set of The lack of assets can hamper self-employment additional laws and regulations influence labor and entrepreneurship. Liquidity constraints can also market access. How, when, and if refugees can prevent those forcibly displaced from searching for access protection, and how temporary or permanent (better) jobs. their refugee status, is a key determinant of their ability to obtain right to work and integrate into the Negative effects of physical asset loss are labor market.11 Refugees are often not allowed to reinforced if households are separated from move freely and choose where to settle in the host family members during displacement or face the country, and placed in geographically remote areas death of a breadwinner. Representative refugee with few economic opportunities. A study collecting surveys in Ethiopia, Kenya and Uganda show that data on IDPs in and outside of camps in Nigeria and refugees were often separated from family members, Somalia found that IDP camps are also further away had higher dependency ratios than hosts, and were from markets and services.12 In many countries, more likely to live in female-headed households, refugees also face restrictions on their ability to own reducing their ability to generate sufficient income.16 property and access bank accounts or other financial Because of the loss of assets or inability of a male services such as insurance and loans. These restrictions breadwinner to assure sufficient income, women affect their ability to work or start their own business. might participate in the labor market for the first time The extent to which their legal status is uncertain, or after displacement. We see this in the case of Syrian their rights are curtailed, also determines what kind refugees in Lebanon, for example.17 of investments refugees will make. Forced migrants often lack skills or certifications Forced migrants also struggle due to lack required in the new labor market. Compared to of information about their rights and face economic migrants, forced migrants usually have less discrimination. Employers are not always aware choice over their destination, are less economically that they can hire refugees. When asked if refugees selected, and have less time to prepare for their move. in Uganda were allowed to move freely or to work, Thus, they more often face a mismatch between the only around 20 percent of employers surveyed skills they have and those needed in the new labor gave the right answer.13 In focus group discussions, market. One example is when agricultural workers Congolese refugees in Rwanda named employers’ are internally displaced to urban areas. Refugees lack of knowledge of refugees’ right to work as a and IDPs are also often forced to change occupation major obstacle to their labor market integration.14 after displacement, as data from Iraq, Uganda and Employers might also discriminate against refugees Cameroon show.18 Obtaining new skills needed is as well as IDPs for other reasons, including prejudices likely to be easier for younger than for older refugees and stereotypes. Refugees and IDPs themselves and IDPs. Acquisition of education and skills, as well might not always know their rights and be able to as work experience, are likely to have been disrupted defend them. through conflict and forced displacement. Long periods of forced inactivity enact a toll on human Due to conflict and violence, or the displacement capital formation. The formal or informal qualifications itself, forcibly displaced often lose assets, which of those displaced are often not recognized at their may hamper their economic activities, especially destination, especially if they cross borders, which if self-employment is an important source of particularly affects those middle- and high-skilled. In income. A number of studies in low and middle- general, the returns to education obtained in the host income countries—for example, in Colombia, Uganda, country might be different from those obtained abroad. and Ethiopia—show negative association between forced displacement and level of household assets.15 Forced migrants may also not speak the host Refugees and IDPs have to leave assets behind, like community language, hindering employment land and livestock, and often have to deplete their or earning high wages. Research clearly finds a savings to finance their journey and replace lost positive association between language proficiency and income. At destination, those forcibly displaced labor market outcomes in high-income countries. For find it difficult to access or own land for farming. middle-income countries, the importance of language 3 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 is confirmed by a study finding that Syrian refugees with better Turkish language proficiency have a higher likelihood of being employed.19 Refugees surveyed in Uganda identified language as the main obstacle to access employment (19 percent).20 A lack of language skills may decrease the types of jobs the forcibly displaced can do, and may also represent a barrier to formation of social networks to aid in finding employment. Refugees and IDPs are more likely than the host population to suffer poor mental health, which might prevent them from working. Refugees and IDPs often suffer traumatic experiences before, during, and after their journeys and suffer from the if they might be forced to, or are planning to, move psychological effects, including depression, anxiety, again; or (c) shorter if they expect unforeseeable and post-traumatic stress disorder (PTSD).21 Stress and changes to occur to them again in the future. trauma negatively affect cognitive and socio-emotional Depending on the situation and their time horizon, functioning.22 Mental health might add to physical they might be less willing or more willing to make health issues incurred during forced displacement, language, skills, or hard asset investments in their further hindering labor force participation.23 Sometimes new location. Qualitative evidence from Colombia, for a vicious circle ensues, with mental health issues example, shows that a group of internally displaced preventing refugees and IDPs from participating in persons who received new plots of land did not the labor market, which exacerbates their mental invest in the land and only grew subsistence crops, health issues. out of fear of being displaced again.27 In Uganda, refugees planning to return to their country of origin The experience of violence and forced seem less interested in looking for local jobs.28 The displacement might also lead to a negative pay-off period for investments plays a role, and outlook on life and higher risk aversion, which can if permanent status is only granted after a long negatively affect economic activities undertaken. period of uncertainty, specific investments may no Controlling for current wellbeing and loss of assets, a longer be optimal.29 Forced migrants might also take study on internally displaced households in Colombia asset portability into consideration. They might, for finds that those who had been exposed to more example, prefer investments in human capital to severe violence have lower perceived prospects of investments in physical capital, and make sure that upward mobility relative to the mean of sampled their human capital is transferrable.30 IDPs.24 In addition, discrimination and stereotypes in the host country can affect expectations and lead to Forced migrants also lack social networks in host self-fulfilling prophecies. The experience of conflict can countries to help them overcome information increase risk aversion.25 Lower hopes and aspirations, asymmetries and integrate into the labor market. as well as higher risk aversion, can have particularly While economic migrants tend to go to where they negative effects on entrepreneurship, as entrepreneurs have social networks, the decision forced migrants should ideally be self-confident, have higher risk make on where to go is determined largely by appetite, and rebound quickly after failures.26 violence, with less forethought. In addition to language barriers, living in remote areas in camps or The time horizon of forced migrants influences in group accommodations, combined with restrictions if they are willing to make host country‑specific on freedom of movement, increases social isolation investments, and they might take asset and makes it difficult to build networks with hosts. portability into consideration. Compared to Contacts with certain groups of co-nationals or economic migrants, the time horizon of forced other forced migrants can be helpful for better labor migrants can be: (a) longer if they do not think that market outcomes but relying too exclusively on these they will return or be resettled elsewhere; (b) uncertain networks might hamper long-term integration. 4 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 Table 1 Summary of constraints for refugee and IDP labor market integration Constraint Scale Why it binds more for those forcibly displaced Lack of skills ¬ Do not choose destination primarily based on need for their skills and are less economically selected than economic migrants ¬ Disruption of education and work experience and long periods of inactivity through conflict and displacement Affects ¬ Qualifications often not recognized at destination, often cannot take certificates hosts as with them well, albeit less strongly Lack of labor ¬ Do not choose destination primarily based on available labor market demand opportunities ¬ Are often not allowed to move to and settle where economic opportunities are ¬ Tend to move together in large groups, suddenly increasing labor supply Lack of ¬ Have less time to prepare and start learning the language before departure language proficiency Lack of social ¬ Decision on where to go is more driven by violence as a push factor than by networks and networks as a pull factor information on ¬ Lack of freedom to choose where to move and settle might isolate them from labor markets Affects social networks economic ¬ Lack information on labor markets at destination migrants as Uncertain or well, albeit ¬ Often stay in intermediate destinations before secondary movement or short time less strongly resettlement horizon ¬ Uncertainty about recognition of status and duration of residence permit ¬ Might expect unexpected changes to happen again anytime Legal ¬ Often do not have the right to work or to move and settle freely challenges and ¬ Restrictions on ability to own property, open a business, and access discrimination financial services Lack of assets ¬ Have to leave assets behind and usually cannot access them anymore; have to deplete assets to make up for income loss and to finance movements ¬ Higher dependency ratios due to separation from or loss of family income earners; higher likelihood of female-headed households Affects Lower levels of mainly those ¬ Refugees tend to have lower levels of health than hosts and economic migrants health; Higher forcibly due to selection effects and experiences before and during displacement prevalence of displaced ¬ Experience of violence, traumatic experiences during displacement and post- depression and PTSD migration stressors Risk aversion ¬ Negative effects of violence and forced displacement experience on risk appetite 5 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 Forced migrants often face a lack of demand in In recent years, the World Bank Group (WBG) the host labor market. Forced migrants usually do has scaled up its support to refugees and host not choose their first destination based on available communities. Specific sources of funding are now labor market opportunities, and tend to move available for low and for middle-income countries together in large groups, suddenly increasing labor hosting refugees. In 2017, the World Bank created supply. This excess supply adds additional challenges a US$2 billion refugees and host communities to their labor market integration and might influence sub-window (RSW) as part of the 18th replenishment both short and long-term labor market outcomes. of the International Development Association (IDA-18) Together with other barriers to their labor market to help low-income countries hosting large numbers of integration, this lack of demand might lead to higher refugees. Again, up to US$2.2 billion will be available rates of self-employment among those forcibly for a dedicated window for host communities and displaced in their host countries. refugees over the next three years (2020–2023) as part of IDA-19, of which up to $1 billion will support The influence of different obstacles depends on a COVID-19 responses . The World Bank’s Global number of factors, and job interventions need to Concessional Financing Facility (GCFF) provides consider each context to address job challenges concessional financing to middle-income countries forced migrants face. The obstacles for labor hosting large numbers of refugees. The World Bank market integration vary between refugees and IDPs. has approved US$600 million in concessional funds to They depend on the context in the host community, date, supporting projects worth over US$3.8 billion, notably where forced migrants are located (in camps benefitting Jordan, Lebanon, Ecuador and Colombia. in remote areas vs. urban areas), if they have a UNHCR is a key partner in the preparation and stable legal status, are formally allowed to work and implementation of WBG operations in the context of economic opportunities exist. Obstacles might also forced displacement. change with length of displacement and vary within and between sub-groups of forced migrants in the Support for jobs is an important part of the WBG’s same host country depending on age, gender, skill- engagement for refugees and host communities. level, language, culture, the situation in the country Nearly half of the 15 projects approved under the of origin and the causes of the displacement. GCFF, and about one-third of the IDA-18 RSW projects, aim to create economic opportunities for refugees and host communities. They provide access to capital and WHAT ARE WE DOING? training, sometimes complemented with additional interventions as part of a more comprehensive In general, jobs interventions have become more productive economic inclusion approach. Access to common in the context of forced displacement. capital in the form of grants, matching grants or loans The number of jobs interventions, notably for ranges from small amounts for the self-employed to refugees, has recently increased. This is a result of a larger amounts for business start-ups and existing global policy shift from humanitarian to development firms. Other projects aim to build socio-economic interventions in situations of forced displacement, infrastructure for refugees and hosts and include and the long-term nature of many displacement labor-intensive works, mostly as part of infrastructure situations. Previous interventions focused on skills building. Under both the GCFF and the RSW, the WBG trainings and small grants or credits. Since the start has supported policy changes facilitating the economic of the Syrian refugee crisis, public works or cash inclusion of refugees as part of Development Policy for work, value‑chain interventions, and market- Loans (DPLs), for example with Colombia and Jordan, based approaches have become more widely used. as well as Programs for Results (PforR) instruments Many programs, such as productive economic in Jordan and Ethiopia.31 This includes support to inclusion approaches, now include several types of provide refugees more stable legal status, reforming interventions. Interventions on the demand side of laws and regulations limiting refugee access to the the labor market, and interventions aiming to increase labor market, and granting the right to move and social networks, are less common. The use of wage settle freely. Support for policy changes will play an subsidies has been limited to high-income countries. even larger role under the IDA-19 host communities 6 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 studies also assess the jobs potential for refugees in certain value chains or in private sector firms. To increase knowledge about the specific challenges refugees might face, the World Bank has also helped conduct representative cross-sectional surveys on refugees and IDPs, and has promoted the integrating of refugees and IDPs into national household surveys run by National Statistical Offices. WHAT WORKS? As rigorous evidence is nascent, this section and refugees window. In addition, the International looks at emerging lessons from interventions Finance Cooperation (IFC) is engaged in efforts to targeting formal and informal employment, promote investments by firms in refugee hosting areas. self-employment and entrepreneurship, as well as hypotheses requiring further testing. Rigorous The WBG also implemented nearly 80 projects quasi-experimental or experimental evidence on jobs targeting IDPs between 2000 and 2019, of which interventions for refugees and IDPs is scarce and over one-third support jobs.32 As the recently mainly focused on high-income countries. Table 2 developed World Bank IDP strategy shows, these presents an overview of the state of evidence for each projects were implemented in over 30 countries. type of intervention. Where we do not have enough One example is the support for living standards and rigorous evidence to credibly demonstrate impacts, livelihoods of IDPs in Azerbaijan. No impact evaluation we present first emerging lessons, factors that need using a control group was conducted, but the results to be considered, as well as ideas, hypotheses, and from pre-post comparisons seem promising, notably interventions that might be useful to test in the future. for the development of income-generating activities Given the restrictive legal framework and general lack with self-help groups. The location of the micro- of employment opportunities in the formal sector in businesses in IDP settlements limited the profitability many host countries, we use a broad definition of jobs and growth potential of such projects, however. as any income source, formal or informal, including employment, self-employment and entrepreneurship. The World Bank and other actors are also engaged in creating more evidence on refugees Jobs interventions for those forcibly displaced and IDPs. The World Bank is funding several must take the legal obstacles into account and, randomized control trials (RCTs) of jobs interventions if possible, support reforms in this area to allow for refugees and IDPs. This includes RCTs on economic other interventions to be truly successful. Legal inclusion approaches in Afghanistan and Niger under frameworks are especially important in determining the Foreign, Commonwealth and Development Office relationships of those forcibly displaced with the labor (FCDO) “Building the Evidence on Protracted Forced market. As evidence from OECD countries shows, the Displacement: A Multi-Stakeholder Partnership’’ length of waiting before legally allowed to enter a labor program, and on innovative entrepreneurship market is associated with employment gaps, which take opportunities for Jordanians and Syrian refugees many years to fill due to scaring effects, deterioration under the Jobs Umbrella Multi-Donor Trust Fund. of human capital, and lower motivation.33 Decreasing Innovations for Poverty Action (IPA) is also funding the period of uncertainty about the prospects of stay RCTs. Examples include comparing different variations leads to better labor market outcomes, possibly by of the productive economic inclusion approach for giving refugees a longer time horizon and incentivizing refugees and host communities and exploring the country specific investments. In addition, settling those potential of wage subsidies for refugees in Uganda. forcibly displaced where labor market opportunities Another looks at inclusion of imagery in a soft skills are, or allowing them to move and settle freely has a training program to increase the motivation of IDP positive effect on their labor market outcomes. One entrepreneurs in Colombia. World Bank and IFC example for reforms in this regard is the new refugee 7 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 law in Ethiopia, which grants refugees the right to groups is their particular need to make up for the loss work and allows them to reside out of camps. How of assets and income associated with their [unplanned] lowering the regulatory barriers for formal labor market migrations. Notably in low-income countries, but also participation of refugees or helping them overcome the in middle-income countries, self-employment is an administrative hurdles will impact their labor market important source of income usually requiring certain outcomes will depend on the context.34 In Jordan the assets. Liquidity constraints can also prevent those introduction of work permits had limited uptake and forcibly displaced from finding (better) employment.36 impacts at the beginning, likely due to the limitation In response, financial capital injections are even more of work permits to a small number of sectors that did important compared to other contexts. Skills training not match the skills and aspirations of the refugees and should be linked to cash injections or access to credit the fact that work permits were tied to employers.35 to be more effective. Where relevant, this would need Follow-up reforms in Jordan now aim to grant more to include granting access to land for farmers, which, flexible work permits, waive work permit fees and allow besides financial capital, requires the availability of land Syrian home-based businesses, which is particularly that can be purchased or used. We would, however, important for Syrian refugee women. Even if refugees expect short time horizons or uncertainty about length mostly continue to work in the informal sector, because of stay, as well as very restrictive legal frameworks for of their skill levels and the size of the informal sector in refugees, to limit the benefits of such cash injections. the respective country, they will do so on a more equal footing with natives in terms of bargaining power if Skills training alone does not have a promising they have the right to work. Anti-discrimination laws track record, and training needs to adapt to the and communication about rights of those forcibly specific constraints of those forcibly displaced. displaced aim to address discrimination against refugees Because refugees and IDPs are usually not able to and IDPs, but there is a lack of rigorous evaluations on choose their locations based on host community the benefits of such policies and interventions. labor market needs, there is a higher likelihood of skills mismatch. Training programs could help address As refugees and IDPs usually face multiple barriers the lack of skills those forcibly displaced might face to enter the labor market, the evidence for using in destination labor markets, but the track record of integrated interventions that address several “skills only” interventions is not promising.37 Training constraints at once seems more promising. Such programs in forced displacement context also need interventions range from the combination of training to tailor trainings to skills that are appropriate and with cash injections or work experience to full-fledged marketable in view of the legal framework and productive economic inclusion-type of approaches. As location of forced migrants, which often limit integrated interventions are usually more expensive, economic opportunities. Training programs should more evidence is needed to make the “black box” directly address the greater skills mismatch by focusing more transparent to understand which program on people that need to change occupation after elements are most effective and efficient. Compared displacement. Qualitative and descriptive evaluations to other target groups, certain types of interventions show positive results for IT skills such as coding, but that consider the specific situations of refugees and the potential for scaling up programs teaching these IDPs might deliver larger benefits. Table 2 summarizes kind of skills needs to be proven.38 Besides taking the different types of interventions, their rationale in general gender-relevant aspects into account—such the context of forced displacement, and what we as gender-barriers to access certain jobs, or social know about how they affect refugees and IDPs. norms that make it difficult for women to leave the house—interventions need to adapt to a potentially Where combined interventions are not possible, increased number of female-headed households financial capital injections seem particularly and higher dependency ratios. Trainings need to important as the loss of assets and income design implementation modalities to allow female holds those forcibly displaced back. Cash and participants to attend, for example including childcare other capital-based support has an encouraging track or adapting the hours of the training. Language record, even in situations of fragility, conflict, and training can also be helpful to improve employment violence (FCV). One way in which refugees and IDPs opportunities, but to be effective this training needs differ from other types of migrants or poverty-affected to adapt to different education levels and link to job 8 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 assistance can have positive effects on labor market outcomes even in low and middle-income countries, but these types of assistance tend to be more costly.42 Interventions to overcome spatial mismatches, such as transportation and housing subsidies, seem promising and need further testing and evaluation.43 While not an effective instrument to create jobs, subsidized employment could help forced migrants increase their employability. Wage subsidies in the private sector show promising effects for refugees and other migrants, but evidence is limited to high-income countries and short-term effects.44 Other monetary opportunities. Assessment and recognition of skills benefits for employers need to be adapted to firm and qualifications could be helpful, notably in more profiles and forced migrants’ skills and preferences. The formalized labor markets and for those with middle or 2016 EU-Jordan Compact on Syrian refugees represents high-skill levels, but more evidence is needed. prominent example, where only a few firms took advantage of the opportunity to have rules of origin Interventions addressing the psychological and relaxed when exporting to the EU if Syrian refugees mental health effects of forced displacement are made up a certain percentage of the workforce. Public very promising. Several rigorous impact evaluations works and cash-for-work programs have become have shown that short-term therapy interventions popular in the context of forced displacement. They can improve the mental health of refugees and can confer important short-term benefits, providing IDPs.39 First evidence—for example from RCTs in Iraq, temporary employment and increasing income and Uganda, and Thailand—also shows that therapy can assets even in very fragile and poor environments, be successfully implemented cost effectively even in and where refugees face legal obstacles to integrate low-resource settings lacking professional counselors the labor market. Medium to longer-term effects on and psychotherapists.40 We need to better understand, employment, however, seem less promising.45 however, which types of support can facilitate labor force participation, and how such support can be Value-chain and other market-based interventions best integrated into broader jobs interventions. Jobs seem promising, but rigorous evaluations are interventions in general need to understand changes needed. In the context of forced displacement, in mental health and economic behavior due to humanitarian and development actors increasingly forced displacement—which can affect risk appetite, implement interventions aiming to develop or aspirations, and willingness to invest, as discussed— strengthen links along value chains and provide market and incorporate them into intervention design. Job information, often combined with other measures.46 interventions also need to address the potential scaring These interventions aim to increase demand for goods effects of long periods of inactivity and consider that and services of the self-employed. As for public works beneficiaries may no longer be used to work. programs, rigorous evaluations are lacking. “Matching” interventions can be promising but All interventions should include those forcibly need to be adapted to the specific labor market. displaced as well as their hosts on a needs- Job search assistance or “matching” programs based approach and promote social cohesion. are associated with positive effects on refugees’ A recent review of the literature shows that the employment in high-income countries, where job majority of studies do not find significant impacts of a opportunities in the formal sector exist.41 The little forced displacement inflow on host community labor existing evidence from low and middle-income market outcomes, but there is evidence that certain countries seems less promising. Beyond public subgroups in the host community can be negatively matching services, refugees and IDPs need support impacted.47 Jobs interventions should help to address to build up social networks. In addition, first evidence such potential negative impacts for host community shows that intensive coaching and individualized members and target those forcibly displaced as well 9 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 as their hosts on a needs-based approach, to avoid the local population, that can then be expanded to increasing social tensions. Interventions should also refugees and IDPs. Promoting social cohesion will align benefits for those forcibly displaced with those help those forcibly displaced build up social networks provided to the host community. Ideally, effective and decrease discrimination, which could in turn help interventions and systems should be developed for them find jobs.48 Table 2 Types of interventions, challenges they address, and existing evidence Specific challenges Intervention Evidence of addressed Rationale Type effects* (in order of importance) Improve legal Legal ¬ Grant right to work → increase employment and job Promising** framework and challenges quality, prevent exploitation information about ¬ Reduce wait time for right to work → avoid delaying rights obtention of host-country specific work experience and demotivation → increase speed of employment, job quality and income trajectories ¬ Increase certainty about prospects of stay → increase time horizon → increase incentive for host-country specific investments ¬ Grant freedom of movement and settlement → can move to where economic opportunities and their social networks are ¬ Remove other legal obstacles like access to financial services and ability to own property → increase self- employment / entrepreneurship ¬ Anti-discrimination laws and information about rights → increase employment and job quality, prevent exploitation Repeated transfers Loss of ¬ Allow households to cover their basic needs → improve Positive*** assets and their mental health, allow households to search for higher income quality jobs and take more risks Lack of social ¬ Indirectly increase social cohesion → decrease networks discrimination on the labor market ¬ Increase investments in education and health → improve labor market outcomes in the future / of the next generation One-off transfers Loss of ¬ Increase productive assets → increase income from Promising when (grant or credit) assets self‑employment or entrepreneurship combined with Lack of labor other demand interventions* Vocational, Lack of skills ¬ Diminish skills mismatch → increase income from Mixed*; more business and other employment and self‑employment promising when skills training, and combined with ¬ Provide evidence for skills for employers recognition of other skills interventions 10 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 Specific challenges Intervention Evidence of addressed Rationale Type effects* (in order of importance) Language training Lack of skills ¬ Better match employers’ needs; increase income through Promising, if Lack of social self‑employment and entrepreneurship well designed networks and ¬ Allow to build up social networks → improve mental and combined information health, increase information on job opportunities with other on labor interventions** market Healthcare and Physical and ¬ Improve health → increase ability to participate in labor Positive*** psychosocial psychological market and productivity support health Job search Lack of social ¬ Overcome search and matching frictions including Mixed** assistance, networks and information asymmetries regarding the qualifications of matching and information those forcibly displaced coaching ¬ Allow them to move to where economic opportunities and their social networks are Wage subsidies Lack of skills ¬ Increase employability by earning host-country work Promising but Lack of social experience evidence limited networks ¬ Compensate for employers’ lack of information on to high-income qualification settings** Lack of labor demand ¬ Compensate for lower productivity of those forcibly displaced due to language or other barriers → Increase probability of future employment Subsidized public Loss of ¬ Allow to save, build up social networks, increase skills on the Less promising sector assets job or through accompanying trainings, prevent idleness, employment allow them to take risks through providing a form of Lack of skills insurance → increase probability of future (self-) Lack of social employment networks ¬ Indirectly: Have multiplier effects through cash injections Lack of labor in the local economy and public infrastructure built; demand ¬ If massive: lead to (temporary) increase in wages Access Lack of social ¬ Develop or strengthen links along the value chain, increase Promising to markets / value networks and information → increase income from self-employment chain information and micro-enterprises interventions Lack of labor demand *** = rigorous quantitative evidence for LMIC; ** = rigorous quantitative evidence focused on HIC; * = qualitative and less rigorous quantitative evidence for LMIC; no star = lack of evidence 11 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 WHAT’S NEXT? The design of jobs interventions must address the specific obstacles refugees and IDPs face in accessing labor markets. This Note drew on a nascent but growing body of evidence to highlight the specific obstacles refugees and IDPs face on the labor market compared to locals and economic migrants. Low and middle-income countries need more data—notably panel data—to better understand the challenges forcibly-displaced individuals face. Even more than in other contexts, thorough assessments of both labor market supply and demand need to inform program design. Assessment must include because programs such as cash transfers, which show legal context and the perceptions and aspirations little to no benefits on employment rates, may have of the forcibly displaced. Programs such as skills hidden positive effects in increasing quality of work trainings have often not assessed if and in which type conditions. Self-reliance indices might help measure of activities and sectors those forcibly displaced are intervention effects over time.49 allowed to work nor market demand where refugees and IDPs were located, which has limited the benefits More experimentation is needed to evaluate from such programs. Jobs interventions also usually promising interventions that have not yet been do not seem to consider how forced displacement widely implemented. This includes interventions experience impacts economic behavior and investment that aim to: calculations of their target group. •  Enact policy reforms addressing legal challenges refugees face. Evidence from OECD countries More rigorous evidence is needed on how shows that such policy reforms could also confer to design jobs interventions for the forcibly large benefits in low and middle-income countries. displaced in low and middle-income countries, As the experience from the Jordan Compact shows, with more focus on IDPs. For many types of experimentation is needed to understand how to interventions, rigorous evidence only comes from best design these policies in specific labor market high-income countries. The vast majority of evaluations and political contexts, and to address specific focus on refugees. Future evaluations should refugee population profiles and aspirations. include more low and middle-income countries and •  Expand social networks of the forcibly displaced interventions working with IDPs, but also should look to help them find jobs. Notably in low and middle- at longer-term impacts. Evaluations should focus on income countries, public matching services cannot interventions, but where rigorous evaluations are replace private networks and refugees and IDPs might missing, such as value-chain and other market-based benefit from support to build up such networks. and economic-inclusion approaches. Future research can exploit recent changes in legal frameworks to •  Cover the costs of job search and overcome improve refugee labor market access in countries such spatial mismatches. Even when allowed to move as Jordan, Colombia, and Ethiopia to broaden our freely, forced migrants might need support to knowledge of policy impacts in low and middle-income actually do so. Programs supporting transportation settings. Evaluating the impacts of interventions in the or providing housing allowances for urban centers forced displacement context should not be limited can allow forced migrants to move to access to basic needs outcomes, such as food security: economic opportunities. One first adaptive evaluations should also consider employment and targeted field experiment found positive impacts jobs outcomes, which may indicate more substantive of a cash-transfer labeled to pay for costs of job integration into a host community with longer-term search among Syrian refugees in Jordan.50 Programs sustainable benefits. Moreover, these interventions aiming to overcome spatial mismatches in terms should also consider the quality of work, including of employment opportunities have proven quite wages and exposure to hazardous conditions. This is successful in other contexts.51 12 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 KEY REFERENCES A full bibliography of underlying evidence can be found at https://www.jobsanddevelopment.org/wp-content/ uploads/2020/10/Bibliography-Solutions-Note-Jobs-Interventions-for-Refugees-and-IDPs.pdf. Caria, Stefano et al. 2020. “An Adaptive Targeted Field Experiment: Job Search Assistance for Refugees in Jordan.” CESifo Working Paper, No. 8535, Munich Society for the Promotion of Economic Research—CESifo GmbH, Munich. Gimenez-Nadal, Jose Ignacio, José Alberto Molina, and Edgar Silva-Quintero. 2019. “On the Relationship between Violent Conflict and Wages in Colombia.” The Journal of Development Studies 55 (4): 473–489. Loiacono, Francesco, and Mariajose Silva Vargas. 2019. “Improving Access To Labour Markets for Refugees: Evidence from Uganda.” International Growth Center C-43445-UGA-1. Mejia-Mantilla, Carolina, Besufekad Alemu, Johanna Fajardo, and Nobuo Yoshida. 2019. “Informing the Refugee Policy Response in Uganda. Results from the Uganda Refugee and Host Communities 2018 Household Survey.” Washington, DC: World Bank Group. Moya, Andrés. 2018. “Violence, Psychological Trauma, and Risk Attitudes: Evidence from Victims of Violence in Colombia.” Journal of Development Economics 131: 15–27. Neuner, Frank, Patience Lamaro Onyut, Verena Ertl, Michael Odenwald, Elisabeth Schauer, and Thomas Elbert. 2008. “Treatment of Posttraumatic Stress Disorder by Trained Lay Counselors in an African Refugee Settlement: A Randomized Controlled Trial.” Journal of Consulting and Clinical Psychology 76 (4): 686. Pape, Utz Johann, Benjamin Petrini, and Syedah Aroob Iqbal. 2018. “Informing Durable Solutions by Micro-Data: A Skills Survey for Refugees in Ethiopia.” The World Bank, Washington, DC. Pape, Utz Johann, Ambika Sharma, Taies Nezam, Benjamin Petrini, Menaal Fatima Ebrahim, Jacob Udo-Udo, Felix Konstantin Appler, et al. 2019. “Volume B: Country Case Studies.” Washington, DC: World Bank Group. Schuettler, Kirsten and Laura Caron. 2020. “Jobs Interventions for Refugees and Internally Displaced Persons.” Jobs Working Paper Issue No. 47, Washington, DC: World Bank. Torosyan, Karine, Norberto Pignatti, and Maksym Obrizan. 2018. “Job Market Outcomes of IDPs: The Case of Georgia.” 11301. IZA Discussion Papers. World Bank, and UNHCR. 2020. “Understanding the Socioeconomic Conditions of Refugees in Kalobeyei, Kenya. Results from the 2018 Kalobeyei Socioeconomic Profiling Survey.” UNHCR and World Bank Group. Zetter, Roger, and Héloïse Ruaudel. 2016. “Refugees’ Right to Work and Access to Labor Markets—An Assessment (Part 1)” KNOMAD Study, Washington, DC: World Bank. ENDNOTES 1 World Bank 2012. 2 Dustmann et al. 2017 for EU with 2008 European Labour Force Survey (EULFS) data; Fasani, Frattini, and Minale 2018 for EU with 2008 and 2014 EULFS data; Baum, Lööf, and Stephan 2018 and Åslund, Forslund, and Liljeberg 2017 for Sweden; Bakker, Dagevos, and Engbersen 2017 for the Netherlands; Lens, Marx, and Vujić 2019 for Belgium; Sarvimäki 2017 for Finland; Spadarotto et al. 2014 for Switzerland; Connor 2010; Cortes 2004; Evans and Fitzgerald 2017 for the US; Aydemir 2011 for Canada; Ruiz and Vargas-Silva 2018 for the UK; Anders, Burgess, and Portes 2018 for East African Asians in the UK. 3 Mejia-Mantilla et al. 2019. 4 Pape, Petrini, and Iqbal 2018. 5 World Bank and UNHCR 2020. 6 Fallah, Krafft, and Wahba 2019; Srour and Chaaban 2017. 13 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 7 Gimenez-Nadal, Molina, and Silva-Quintero 2019. 8 Torosyan, Pignatti, and Obrizan 2018. 9 Zetter and Ruaudel 2016. 10 One example is Azerbaijan, where legal restrictions to the employment, accommodation and schooling of IDPs continue to exist (World Bank 2017). 11 Zetter, Ruaudel, and Schuettler 2017. 12 Pape et al. 2019. 13 Loiacono and Silva Vargas 2019. 14 Bilgili and Loschmann 2018. 15 Ibanez and Moya 2007 for Colombia; Fiala 2009 and Mejia-Mantilla et al. 2019 for Uganda; Pape, Petrini, and Iqbal 2018 for Ethiopia. 16 Pape, Petrini, and Iqbal 2018 for Ethiopia; World Bank and UNHCR 2020 for Kenya; Mejia-Mantilla et al. 2019 for Uganda. 17 World Bank 2013. 18 For Iraq Al-Shami et al. 2019; for Uganda Mejia-Mantilla et al. 2019; and for Cameroon Barbelet 2017. 19 Kayaoglu and Erdogan 2019. 20 Vemuru et al. 2016. 21 Studies vary greatly in the levels of incidence and prevalence of symptoms they report, due likely to context as well as different measures and methods used. See the literature reviews and meta-analyses by Hollifield et al. 2002; Porter and Haslam 2005; Steel et al. 2009; Bogic, Njoku, and Priebe 2015. 22 McEwen and Sapolsky 1995. 23 For refugees in the UK and the Netherlands: Ruiz and Vargas-Silva 2018; De Vroome and Van Tubergen 2010; for mental health impacts on labor force participation generally: S. Banerjee, Chatterji, and Lahiri 2017; Savoca and Rosenheck 2000; Ettner, Frank, and Kessler 2016; Frijters, Johnston, and Shields 2014. 24 Moya and Carter 2019. 25 Moya 2018; Jakiela and Ozier 2018; Voors et al. 2012; Callen et al. 2014. Forced migrants might also be selected based on their risk- attitude, i.e. be more risk averse to begin with (Ceriani and Verme 2018). 26 Levine and Rubinstein 2017. 27 Matijasevic et al. 2007 via Ibáñez and Moya 2007. 28 Loiacono and Vargas 2019. 29 Dustmann et al. 2017. 30 Becker et al 2018; Ivlevs and Veliziotis 2018. 31 For additional examples of policy changes as part of the IDA-18 RSW see p. 16–17 http://documents1.worldbank.org/curated/ en/515831563779134705/pdf/IDA19-Second-Replenishment-Meeting-Special-Theme-Fragility-Conflict-and-Violence.pdf 32 World Bank Group IDP Strategy (forthcoming). 33 Marbach, Hainmueller, and Hangartner 2018; Hvidtfeldt et al. 2019; Hainmueller, Hangartner, and Lawrence 2016. 34 Clemens, Huang, and Graham 2018. 35 Gordon 2019. 36 Existing evidence on this aspect is focused on Syrian refugees (Caria et al. 2020; Chaaban et al. 2020; Lehmann and Masterson 2014; Giordano et al. 2017). 37 Ayoubi and Saavedra 2018. Also in other contexts, vocational training programs have only shown modest impacts on employment. 14 Jobs Interventions for Refugees and Internally Displaced Persons OCTOBER 2020 38 Hatayama 2018; Francis 2019; Mason 2018. 39 Such positive impacts have also been found in fragile and conflict-affected settings more broadly. 40 Knaevelsrud et al. 2015 for Iraq; Neuner et al. 2008 for Uganda; and Bolton et al. 2014 for Thailand. 41 Battisti, Giesing, and Laurentsyeva 2019; Joona and Nekby 2012. 42 CWS 2018. 43 McKenzie 2017; Caria et al. 2020. 44 Clausen et al. 2009; Bilgili 2015; Butschek and Walter 2014. 45 Lombardini and Mager 2019; Gehrke and Hartwig 2018. 46 Nutz 2017. 47 Verme and Schuettler 2019. 48 For example, cash, food, and voucher transfers have been found in an RCT for Colombia refugees and their hosts in Ecuador to significantly increase social cohesion and social participation for refugees, probably because of joint targeting of refugees and poor host community members, and because of interaction at required training events (Valli et al. 2018). 49 Self-reliance indices aim to measure the social and economic ability of refugees or IDPs to meet essential needs in a sustainable manner (Leeson et al. 2020; Refugee Self-Reliance Initiative 2020). 50 Caria et al. 2020. 51 McKenzie 2017. 15 This note was prepared by Kirsten Schuettler (Jobs Group). It is based on Kirsten Schuettler and Laura Caron. 2020. “Jobs Interventions for Refugees and Internally Displaced Persons.” Jobs Working Paper Issue No. 47, World Bank, Washington, DC. This Note was prepared as part of the Knowledge Program for Jobs: From Jobs Analytics to Support for Jobs Operations (P170399; Siv Tokle, Task Team Leader). The author would like to thank Meriem Ait Ali Slimane, Jan von der Goltz, Alvaro Gonzalez, Melissa Johns, and Phillippe Leite for useful comments. The production and publication of this report has been made possible through a grant from the World Bank’s Jobs Umbrella Multidonor Trust Fund (MDTF), which is supported by the Department for International Development / UK AID, the Governments of Norway, Germany, Austria, the Austrian Development Agency, Italy, and the Swedish International Development Cooperation Agency. 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