New publication: Ethnic Enclaves, Self-employment, and the Economic Performance of Refugees: Evidence from a Swedish Dispersal Policy

The study focuses on approximately 14,000 refugees from ten different countries who arrived in Sweden during 1990–1991. Refugees at this point in time were spatially placed in various municipalities by Swedish authorities as part of a dispersal strategy. The fact that the newly arrived refugees did not themselves initially decide on their place of stay is utilized to investigate the causal effects of the municipal conditions.

The study primarily asks if refugees, who were placed in municipalities with more coethnics, as well as with more coethnics with certain traits, entered self-employment to a greater extent.

The study provides two main results:

First, refugees who were placed in municipalities with more coethnics were not more likely to enter self-employment. This conclusion holds irrespective of whether the frequency of coethnics is measured using the absolute number, or the share of coethnics living in the municipality of arrival. The estimated null effect also applies to lower geographical levels, such as parishes.

Second, refugees who were placed with more self-employed coethnics did enter self-employment to a greater extent during the next few years. This result cannot be explained by the general business conditions in the municipality, the tendency for certain ethnic groups to become self-employed, or by the degree of marginalization within a particular ethnicity. The results are instead likely explained by networks and knowledge transfers. In other words, meeting skilled coethnics with business experience, matter greatly for self-employment entry.

Moreover, the results suggest that being placed with a larger share of self-employed co-ethnics is negatively related to refugees’ long-term disposable income; however, assuming there is no or little selection of high-ability refugees into self-employment, this negative relationship can be counteracted by the choice of self-employment. The study adds new knowledge on the arguably crucial topic of socio-economic integration of an important group of international migrants — namely, refugees

Download the article "Ethnic Enclaves, Self-employment, and the Economic Performance of Refugees: Evidence from a Swedish Dispersal Policy"from International Migration Review'swebsite.