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Investing in refugees pays off: study

Dagmar BreitenbachMay 18, 2016

Investing in refugees in the EU can net nearly twice the amount within just a few years, according to a new study. Its author urges a more positive outlook and the right policies to maximize contributions by refugees.

man showing refugee job Copyright: picture-alliance/dpa/P. Pleul
Image: picture-alliance/dpa/P. Pleul

The study's message is simple: "Refugees are not a burden but rather an opportunity to be welcomed," says its author, Philippe Legrain.

"Our key finding - based on IMF [International Monetary Fund] figures - is that investing 1 euro ($1.13) in welcoming refugees to the EU can yield nearly 2 euros within five years," he told DW.

Legrain, an independent London-based writer, commentator and consultant, is the author of "Refugees Work: A humanitarian investment that yields economic dividends" - a comprehensive international study co-published by Legrain's Open Political Economy Network and the US-based Tent foundation, launched last year to help refugees.

And according to that study, refugees have a lot to contribute as workers, entrepreneurs, innovators, taxpayers, consumers and investors.

Advantages outbalance burdens

Two women sweing Copyright:DW/N. Müller
Integration is much easier with a jobImage: DW/N. Müller

Refugees can help fill the many skills shortages in EU nations including Sweden, the Netherlands and Germany, the study points out.

At a time when the world faces its biggest refugee crisis since World War II, the study provides clues as to how refugees can contribute to the economy. Given the political backlash to Europe's refugee situation and the "policy confusion about how best to make use of refugees," the analysts felt "sound economic evidence and policy recommendations are needed right now," Legrain said.

Apart from literacy and language training, the main priority is to get refugees working quickly, Legrain said, adding that it's a problem in most European countries that asylum seekers can't work before their asylum claim has been determined.

"They often end up languishing unemployed, and that's a huge waste of their talent," he said.

Refugees have already suffered enough, says the study, which concluded that it's in everyone's interest to make the most of their talents and energy.

According to the study, the EU spends up to 12,000 euros ($12,960) per asylum seeker in the first year.

Hardship and failure

Other priorities include speeding up asylum application processes, ensuring refugees have the right skills, recognizing qualifications, matching them to job opportunities - and ensuring jobs are available.

The study points out that governments also often settle refugees in parts of the country where housing is cheap and there are few jobs.

Global differences in handling refugees are pronounced, according to Legrain. The US "gives refuges a burst of initial help and then expects them to fend for themselves." But refugees there start working quickly, and are more likely to be employed than people born in the country - while for instance in Sweden, refugees have been treated as charity cases.

"Many EU countries are the worst of both worlds: not generous to refugees and with high barriers to start refugees working," said Legrain. "The result is hardship for the refugees, and misplaced resentment toward them."

Demographic dividend

Ageing societies can certainly benefit from the arrival of younger refugees who are on average in their early 20s, Legrain said.

The EU's retirement-age population (aged 65 and over) is projected to rise by 8.5 million between 2015 and 2020, and by 27.9 million by 2030.

elderly citizens, heads Copyright: picture-alliance/dpa/P. Pleul
Germany's population is ageing fastImage: picture-alliance/dpa/P. Pleul

Germany, in particular, is looking at a dismal demographic development: without migration, the working-age population is projected to shrink by a sixth - 8.7 million people - by 2030, while the retirement-age population is likely to grow by more than a quarter to 4.7 million people. Germany, the study warns, would then have only two people of working age for each person of retirement age.

'Workplace a key element of integration'

Governments should understand they are welcoming refugees for humanitarian reasons, but that these people also have a lot to contribute. "It's in their interest and the interest of society that we put in place policies where they can contribute as quickly as possible," said Legrain.

It's also the best road to integration, he added, as "the workplace is a key element of integration into society. It's how you build relationships with local people, learn the language and feel valued."