European governments are struggling with the biggest refugee crisis since World War II, but there exists little evidence regarding how the management of the asylum process affects the subsequent integration of refugees in the host country. We provide new causal evidence about how one central policy parameter, the length of time that refugees wait in limbo for a decision on their asylum claim, affects their subsequent economic integration. Exploiting exogenous variation in wait times and registry panel data covering refugees who applied in Switzerland between 1994 and 2004, we find that one additional year of waiting reduces the subsequent employment rate by 4 to 5 percentage points, a 16 to 23% drop compared to the average rate. This deleterious effect is remarkably stable across different subgroups of refugees stratified by gender, origin, age at arrival, and assigned language region, a pattern consistent with the idea that waiting in limbo dampens refugee employment through psychological discouragement, rather than a skill atrophy mechanism. Overall, our results suggest that marginally reducing the asylum waiting period can help reduce public expenditures and unlock the economic potential of refugees by increasing employment among this vulnerable population.

Keywords

INTRODUCTION

There is a distressing refugee crisis taking place throughout the world. As people flee civil war, state failure, disease, natural disasters, and poverty, refugee-receiving countries are faced with an urgent and fundamental challenge: how best to integrate the massive number of asylum seekers who have been granted some form of refugee status, totaling 14.3 million in 2014 (1). In 2014 alone, Europe received more than 700,000 new asylum claims, a 47% increase compared to 2013 (2), and the crisis shows no signs of abating. In 2015, more than 1 million new asylum applications were lodged in Europe, and more than 3700 asylum seekers were reported dead or missing on the journey (3, 4).

Asylum seekers are trapped along a path of despair: fleeing horrific circumstances at home, undertaking a perilous and often deadly journey, and then ultimately being met with resistance and exclusion in the resettlement process. The massive influx of asylum seekers has resulted in political conflict in many receiving countries and increasingly violent native backlash against migrants including mass demonstrations, hate crimes, and even arson attacks on asylum housing facilities (5, 6). Successfully integrating refugees can help curb this rising native backlash seen throughout Europe, while also unleashing the full economic potential of the diverse skills among accepted refugees, most of whom remain in the host country for good (7). To be clear, refugee integration has been a long-standing and pressing issue in many European countries with large refugee populations, such as Switzerland (8, 9), and the current crisis exacerbates this major ongoing problem.

In the context of this crisis, receiving countries have a unique opportunity to alter the management of how asylum seekers are received and perhaps, most importantly, the policies that determine how long they have to wait to begin their new lives in the host country (10). The rules of the Dublin Regulation, which apply to European Union member states and cosignatories such as Switzerland, demand that asylum seekers be temporarily housed somewhere in the responsible country of arrival while they wait for a decision on their asylum claim. During this waiting period, the asylum seekers find themselves in a legal and social limbo in which their lives are essentially put on hold, and they operate under the threat of deportation in the case that their asylum claim is denied. Asylum seekers typically live isolated from the native population in an assigned reception center or in collective accommodation. They typically receive welfare support and face some restrictions on travel and employment, and there is an expectation that many of them will be deported (10–13). For many, this idle waiting period lasts for years until either their claim is denied and they are sent back or their claim is approved and they are granted some form of refugee status that protects them from deportation and provides temporary legal residency in the host country. The receipt of this new status marks a crucial transition point for asylum seekers, because they are now officially regarded as protected refugees, and state authorities expect that they will rapidly integrate into the host country and make their own living.

How does the length of the period during which asylum seekers are forced to wait for their asylum decision affect the subsequent integration and success of refugees in what will become their adoptive homes? Does being forced to wait longer dampen the chances that refugees will find employment and successfully navigate the difficult transition from a life in limbo to becoming productive participants in the host country economy? There are theoretical reasons to expect that longer waiting periods can act as an important impediment to subsequent integration. Psychological stress can arise when individuals face a threat to their resources or investment (14), de facto unemployment during waiting periods can lead to depression and disempowerment (15–17), and continuous uncertainty can compound the trauma already experienced by many refugees (18, 19). In addition, economic theory suggests that time out of the labor market will cause skills to atrophy, and therefore, long-term unemployed asylum seekers will face steep barriers to reentering the labor market (20).

There is a significant body of literature emphasizing the importance of the postmigration experience as it relates to refugee integration. First, several important studies have documented the economic, social, health, and psychological issues among refugees in European and other host countries (21–27). In Switzerland specifically, asylum seekers have been shown to have high levels of psychiatric disorders (28). Second, and more specific to this particular research question, there is also a large body of in-depth qualitative work illuminating the multitude of issues and challenges that arise from the uncertainty faced by asylum seekers and refugees while living in limbo (29–34). Recounting her family’s experience waiting, an asylum seeker in Switzerland captures some of the specific challenges of an uncertain future that these studies highlight: “We came here and my husband had high hopes; he thought he could find work here… five years living in real uncertainty, we didn’t know what was going to happen with us…. I can see the same with many other men, that they become a mess, and then their marriage and family and everything [falls apart]” (19). Another asylum seeker, a young Afghan in Sweden, pointedly captures the waiting process: “Even in prison they operate with a time limit! ‘This is when you are going to be free,’ they’ll tell you. But here they only tell you to wait, just wait…” (34).

Despite the immediate policy relevance of the issue and substantial qualitative evidence as to the hardships asylum seekers face during lengthy asylum procedures, it remains unknown how longer wait times causally affect the integration of refugees into receiving countries. The aforementioned studies are mostly descriptive and typically based on small-N qualitative interviews and occasional quantitative cross-sectional studies that are not designed to isolate the causal effects of specific asylum policies on refugee integration. This lack of causal evidence reflects the inherent difficulties in gathering large-scale high-quality panel data on the diverse and vulnerable refugee population that needs to be paired with details about the asylum process and integration outcomes to lend itself to a causal identification strategy.

Our contribution fills this gap by providing new causal evidence that isolates and quantifies the effect of the length of the wait time for the asylum decision on the subsequent employment of refugees who have been granted subsidiary protection in the major receiving country Switzerland. Switzerland is one of the top destination countries in Europe both in terms of stock of refugees and in terms of the number of new asylum seekers, and the composition of its refugee and asylum-seeking population is similar to that of other important receiving countries in Europe (see figs. S1 to S3).

Our quantity of interest is the effect of the length of the waiting period on the probability that refugees are employed in the year after they receive refugee status with subsidiary protection. The waiting period is measured as the number of days it took from the submission of the asylum application to a positive decision granting subsidiary protection. During their waiting period, asylum seekers are housed in accommodations in a randomly assigned Swiss canton and they are not allowed to leave this canton. They are allowed to work while waiting but face restrictions in some cantons in the sense that they can only take jobs after a mandatory waiting period of 3 to 6 months, and employers have to demonstrate that no Swiss native or permanent resident can be found for a given job, and in addition, some cantons restrict employment to only specific permissible industries. These restrictions for labor market access of asylum seekers are common in other European countries (see table S1).