Labor market situation of refugees in Europe: The role of individual and contextual factors

Kosyakova, Yuliya; Kogan, Irena

doi:10.3389/fpos.2022.977764

REVIEW article

Front. Polit. Sci., 23 September 2022

Sec. Dynamics of Migration and (Im)Mobility

Volume 4 - 2022 | https://doi.org/10.3389/fpos.2022.977764

This article is part of the Research Topic Migration and Integration: Tackling Policy Challenges, Opportunities and Solutions View all 13 articles

Labor market situation of refugees in Europe: The role of individual and contextual factors

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Corrigendum: Labor market situation of refugees in Europe: The role of individual and contextual factors
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$\nYuliya Kosyakova,$ Yuliya Kosyakova^1,2^*

Irena Kogan³

¹Department Migration and International Labour Studies, Institute for Employment Research (IAB), Nuremberg, Germany
²Chair of Sociology, Area Societal Stratification, University of Bamberg, Bamberg, Germany
³Mannheim Centre for European Social Research (MZES), School of Social Sciences, University of Mannheim, Mannheim, Germany

The paper sheds light on the patterns of labor market integration of refugees in Western countries, who arrived primarily during the 2015–2016 mass refugee migration. Its major focus lies on the role of individual and contextual factors responsible for refugees' success in the labor market. At the host country level, the extent of permeability along the ethnic lines and the welcome of reception—both on the part of the majority population and the part of the established minorities—constitute further essential moderators of refugees' labor market success. This comprehensive literature overview draws on the flourishing body of research in Europe and beyond and discusses commonalities and differences across refugee origins and destinations while paying particular attention to the time trends and meaningful heterogeneities along with refugees' socio-demographic characteristics. We conclude by identifying major avenues for future research.

Introduction

Various forms of persecution, conflict, violence, and human rights violations prompt people to leave their homes every day. In 2018, the number of forcibly displaced persons reached 70.8 million, largely driven by the conflicts in Syria, Afghanistan, Venezuela, and the Horn of Africa (UNHCR, 2019). With only a third of the displaced population seeking refuge abroad, the global dynamics of forced migration induced a worldwide increase in the number of asylum applications (UNHCR, 2019). The largest refugee¹ origin groups in 2016—Syrians, Iraqis, Afghans, Sudanese, Somalians, Eritreans, Congolese, and Rohingyas from Myanmar—were resettled predominantly in the neighboring countries—Turkey, Pakistan, Lebanon, Iran, Uganda, Ethiopia, Jordan, Democratic Republic of Congo, and Kenya (Aksoy and Poutvaara, 2021). In Europe, Germany became one of the key refugee destinations, receiving 1.6 million first-time asylum applications in 2015–2018, which is about 41% of all first-time asylum applications submitted in the European Union during that period (Brücker et al., 2019).

The 2015–2016 refugee migration was not a singular event in European history but a distinct one. In contrast to other refugee migrations to Europe since the end of the 1980s, this one was marked by a combination of a mass population inflow from countries which differed considerably from the European ones in terms of the importance of religion, traditional values and authoritarianism (Triandafyllidou, 2018; Brücker et al., 2020; Safak-AyvazoGlu et al., 2021). Other mass refugee movements to Europe occurred within the European continent. In the early 1990s, a mass within-European migration was caused by the disintegration of the Soviet Union and the Yugoslavian wars (Van Mol and de Valk, 2016). Since the beginning of 2022, Europe has been facing a massive surge of within-European refugee migration anew as the world was upended by the invasion of Russian troops into Ukraine. The UNHCR named it the largest refugee migration since the end of World War II in a short period of time: one-third of Ukrainians have been forced to flee their homes, with seven million people being displaced internally within Ukraine. A further 4.8 million have resettled across Europe (numbers are as of June 2022) (UNHCR, 2022).

Whereas the European response to the refugee migration from Ukraine was marked by solidarity and ultimate support, the refugee migration of 2015–2016 had heated debates on economic realities, national identities and social security concepts in many receiving societies (see discussion by De Coninck, 2022; Paré, 2022). Domestic debates on the policies for foreigners were reflected in the results of national elections, in which right-wing populist party movements such as the Front Nationale in France or the Alternative für Deutschland (AfD) in Germany increased their shares. These debates also exerted considerable pressure on the mainstream parties and the domestic policy approaches to, among other things, refugees rights and their access to social welfare, schooling or the labor market (Inglehart and Norris, 2017; Zunes, 2017).

Another narrative in the host countries' public discourse was to frame refugee migration as a chance to meet the demand for migrant labor due to the aging workforce and growing labor shortages in many European countries (Cohen, 2015; OECD, 2018, 137). Whether refugee migration can indeed provide a solution to local labor shortages would depend on the extent to which advantages of the refugees' relatively young age structure and potential trainability (Brücker et al., 2020; Khan-Gökkaya and Mösko, 2021) outweigh their lack of individual resources and the barriers they face in the host countries.

A considerable body of research on recent refugee migration has emerged, and the field continues to grow, not least due to the ongoing refugee migration from Ukraine. The aim of this paper is to provide a comprehensive literature overview on the topic, covering both recent and earlier refugee populations. To this end, we first present key facts on patterns of refugees' economic incorporation in Western countries, whenever possible discussing differences by refugees' destinations, origins, and gender. We further discuss major correlates of refugees' labor market success at the individual and contextual levels, as well as draw researchers' attention to the possible cross-level interactions.

At the individual level, resources that are crucial to the labor market situation of newcomers are human capital (e.g., education, training, labor market experience), cognitive and non-cognitive skills (e.g., motivational factors), health prerequisites, cultural knowledge and language proficiency, and social capital (Feller, 2005; Phillimore, 2011; Bakker et al., 2014; FitzGerald and Arar, 2018; Kogan and Kalter, 2020). The institutional characteristics of the host countries—particularly immigrant integration policies, labor markets and welfare regimes—are likely to influence immigrants' labor market prospects (Reitz, 1998; Kogan, 2007; Kanas and Steinmetz, 2021). Since refugees enter heterogeneous receiving societies, countries' existing ethno-racial hierarchies might contribute to the perpetuation of ethnic and racial stereotypes, prejudice, and discrimination. The general climate of perception and acceptance is, therefore, a key factor shaping refugees' labor market pathways.

For the literature review, we selected sociological and economic studies that rely on predominantly quantitative research methods and large-scale data sources. For this purpose, we considered mainly journal articles and some gray literature, such as discussion papers and reports on the recent refugees' labor market integration in Western societies. We relied on the backward and forward snowballing approach, that is, we identified new papers by screening the reference lists of included articles and by examining the articles cited in included papers (Sayers, 2007). Our aim is to synthesize research findings published within the past decade on the incorporation of refugees across these national contexts.

Refugees' labor market situation

Empirical studies on the labor market situation of refugees have shown that refugees are generally disadvantaged compared to other migrants in Western destination countries (DeVoretz et al., 2004; Bevelander, 2011; Brücker et al., 2019; Brell et al., 2020; Fasani et al., 2022). Overall, their employment rates are far below those of other foreign population groups and even further below those of the native-born population of the respective host countries (Dustmann et al., 2017; Brell et al., 2020). Especially in the first period after their arrival, refugees are less likely to be employed than other immigrants with the same duration of stay. There is considerable variation between the receiving countries with respect to refugees' employment entry, with employment rates two years after arrival ranging from below 20% in Finland, Denmark, Germany and Norway to 60% in Canada (Brell et al., 2020, p. 104). These compared to considerably higher employment rates of other immigrants in Europe and Northern America, with the employment gaps between refugees and other immigrants tending to be smaller in the USA and Canada than in Europe (ibid.).

With a longer duration of stay, the refugees catch up (Bevelander, 2011; Bakker et al., 2017; Dustmann et al., 2017; Brell et al., 2020; Jestl et al., 2021; Fasani et al., 2022), albeit at different speeds and to varying extents (Cortes, 2004; Connor, 2010; De Vroome and van Tubergen, 2010; Bevelander, 2011). For instance, based on the cross-national comparative data from the European Union Labor Force Survey (EULFS) 2008, Dustmann et al. (2017) demonstrate that it takes refugees, on average more than 25 years to achieve employment parity with the majority native-born in Europe. In Germany, refugees reach an employment rate of 70% 14 years after arrival, whereas other immigrants reach this level after six years of residence (Brücker et al., 2019).

Initially, refugees tend to enter temporary, marginal or part-time employment, with the proportions in atypical employment decreasing with the increasing length of stay (Jackson and Bauder, 2014; Bakker et al., 2017; Brücker et al., 2019). Despite improvements in employment conditions, refugees often occupy jobs in low-skilled and low-paid sectors (Connor, 2010; Dumont et al., 2016; Kanas and Steinmetz, 2021; Fasani et al., 2022). Their wages are in the lowest earning decile, which is not entirely in line with the wages profiles of other migrants (Connor, 2010; Brell et al., 2020; Akgüç and Welter-Médée, 2021; Fasani et al., 2022). Refugees' earning gap to economic and non-economic migrants persists over their duration of stay (Bevelander and Pendakur, 2014; Brell et al., 2020).

Migration scholars contend that the labor market integration of female refugees falls far behind that of their male counterparts (Pittaway and Bartolomei, 2001; Dumper, 2002; Koyama, 2015; Cheung and Phillimore, 2017; Salikutluk and Menke, 2021; Kosyakova et al., 2022a). In this context, the term “triple disadvantage” emerged, suggesting a cumulative disadvantage related to immigration, refugee status and gender (Liebig and Tronstad, 2018) ². Disadvantageous gender-specific labor market trajectories are particularly pronounced in the initial periods after the migration (Fasani et al., 2022). Two years after arrival, employment rates of refugee women only reach 11% of the employment rate of refugee men in Germany, which stands in sharp contrast to the female–male employment ratio among immigrants (40%) or the native-born majority (88%) (see Appendix Table A1 in Brell et al., 2020). Similar patterns are reported for Anglo-Saxon countries, albeit with much smaller gaps between employment rates of refugee men and women. For example, in Canada, the female–male employment ratio for refugees is 63%, while for immigrants and natives, it is 74 and 94%, respectively (ibid). Over time, across various refugee arrival cohorts and across various destination countries, the female refugees' labor market disadvantage decreases but never fully vanishes (Bakker et al., 2017; Brell et al., 2020; Kanas and Steinmetz, 2021; Salikutluk and Menke, 2021; Kosyakova et al., 2022a).

In sum, the literature findings point to the commonalities in labor market entry barriers for newcomers, irrespective of their status upon arrival, such as difficulties in finding employment and a higher propensity to unskilled labor. Distinct patterns of low labor force participation among refugee newcomers suggest that refugees might require more time to adjust to the labor markets of the host countries and acquire marketable skills and competitive qualifications (to be discussed in detail in Individual-level correlates of refugees' labor market integration patterns). Additionally, they might face structural constraints and institutional hurdles (to be discussed in detail in Institutional contexts of reception and refugee labor market incorporation) or even discrimination at the entry in host country labor markets (to be discussed in Social distances and discrimination).

Individual-level correlates of refugees' labor market integration patterns

The lack of pre- and post-migration human capital, i.e., education, training, and labor market experience, is a major barrier to labor market integration, since both are crucial skills that boost economic success. Correspondingly, refugees' adverse labor market outcomes are often explained in terms of their lower pre-migration educational attainment. Most studies conclude that refugees have lower educational levels than other immigrants (Potocky-Tripodi, 2003; Connor, 2010; Spörlein and Kristen, 2019; Brücker et al., 2020; Spörlein et al., 2020) and particularly than the population in the destination countries (Brücker et al., 2020; Spörlein et al., 2020). For instance, 40% of recent refugees in Germany arrived with no secondary schooling degree, and almost half of them have no education at all (Brücker et al., 2020). Among the adult German population, only 4% have failed to complete secondary schooling. These results are not unique to Germany (Kanas and Steinmetz, 2021; Fasani et al., 2022). The data from the EULFS ad hoc modules for 2008 and 2014 show that 45% of refugees in Europe have only obtained a primary degree, while this proportion is 36% for economic and 39% for family immigrants (Kanas and Steinmetz, 2021).

The distribution of refugees' education is bimodal: considerable shares of refugees have either rudimentary or higher education. In fact, shares of highly educated refugees of certain origins are comparable to those among other immigrants. On average, 24% of refugees, 29% of other immigrants, and 28% of natives in EU countries possess a tertiary degree (Dumont et al., 2016; Fasani et al., 2022). The educational level of refugees settling in Europe is significantly higher than the average level of education of the resident population in refugees' countries of origin (Spörlein and Kristen, 2019; Guichard, 2020; Spörlein et al., 2020; Aksoy and Poutvaara, 2021), indicating refugees' educational selectivity. Still, recognition of credentials poses a serious challenge to highly educated refugees (Riemsdijk and Axelsson, 2021; see also Credential recognition), particularly in regulated professions such as medical doctors or teachers (Smyth and Kum, 2010; Jacobsen, 2021). As a result, highly educated refugees are likely to face devaluation of their foreign degrees (Hartog and Zorlu, 2009) and find themselves in jobs for which they are formally overqualified (Duvander, 2001; Smyth and Kum, 2010; Willott and Stevenson, 2013; Dumont et al., 2016), much like other highly educated immigrants.

Large parts of the refugee population bring with them labor market experience, often in qualified jobs (Liebau and Salikutluk, 2016; Brücker et al., 2019, 2020). Yet, only few refugees succeed in earning adequate returns on their pre-migration work experience in the destination labor markets, which is very similar to other immigrant groups (De Vroome and van Tubergen, 2010; Verwiebe et al., 2019; Kosyakova et al., 2022a). In migration research, the lower transferability of pre-migration work experience is often traced back to low comparability of the origin and destination labor markets (Friedberg, 2000; Chiswick and Miller, 2009). For example, differences in healthcare systems and working cultures have been identified as crucial barriers for refugee health professionals in Germany (Khan-Gökkaya and Mösko, 2021) and refugee teachers in Scotland (Smyth and Kum, 2010) to enter suitable jobs.

Concerning refugees' post-migration human capital, there are two major lines of research. The first is related to refugees' investment intentions and the second concerns refugees' returns on these investments in the destination countries. In contrast to economically motivated immigrants, refugees arrive unprepared for integration into the destination labor markets, having lower levels of education and facing difficulties in transferability of pre-migration human capital. At the same time, refugees' longer settlement perspectives in the destination countries should contribute to higher investments in formal education and training in the destination countries (Cortes, 2004; Cobb-Clark et al., 2005; Damelang and Kosyakova, 2021). Research findings regarding refugees' acquisition of host country–specific education are equivocal: some previous studies report greater post-migration education investments among refugees compared to other immigrants (e.g., Khan, 1997; Cortes, 2004), whereas others do not (e.g., Connor, 2010). Research findings are more consistent regarding higher returns on investments in host country human capital compared to the education obtained in origin countries: refugees' post-migration educational investments are associated with higher rates of labor market participation and employment (De Vroome and van Tubergen, 2010; Zwysen, 2019), higher earnings (Cortes, 2004) and higher occupational status (Connor, 2010; De Vroome and van Tubergen, 2010).

Another crucial aspect of destination-specific human capital is destination language proficiency. Apparently, language acquisition is more consequential for refugees than for migrants arriving with economic or family-related motives. In the aftermath of their typically unprepared migration, refugees rarely arrive with any skills in destination languages (van Tubergen and Kalmijn, 2009; Brücker et al., 2020; Kristen and Seuring, 2021; Kosyakova et al., 2022b). At the same time, refugees' exposure to the traumatic experience results in potentially less efficient destination language learning after migration (van Tubergen and Kalmijn, 2009; van Tubergen, 2010). A greater linguistic dissimilarity between the languages of the origin and destination country may further exacerbate difficulties in host country language acquisition among non-European refugees (Beenstock et al., 2001; Chiswick et al., 2006; Isphording and Otten, 2014). Due to their lengthy stays in the asylum seekers centers, refugees' exposure to the native population remains low (van Tubergen, 2010). Correspondingly, the gap in destination language proficiency between refugees and economic migrants persists long after their arrival (van Tubergen and Kalmijn, 2005; Chiswick et al., 2006; Kristen and Seuring, 2021; Kosyakova et al., 2022b), translating into delayed labor market and societal integration (Connor, 2010; Grenier and Xue, 2011; Cheung and Phillimore, 2014; Dustmann et al., 2017; Auer, 2018).

Another important difference between refugee and economic or family immigrants is the former's more adverse health status (Chiswick et al., 2008). Refugees are often more exposed to traumatic events than other migrants, both in their countries of origin and in transit countries. Likewise, refugees' flight is marked by traumatic experiences, such as physical assaults or shipwreck (Porter and Haslam, 2005; Bogic et al., 2015; Hunkler and Khourshed, 2020). After their arrival in the destination countries, refugees often live in adverse conditions (Robjant et al., 2009; Nickerson et al., 2010), experience mental stress in relation to family members remaining in the country of origin or transit countries (Nickerson et al., 2010; Löbel and Jacobsen, 2021), have to go through lengthy and demanding asylum procedures (Silove et al., 1998; Laban et al., 2004; Kosyakova and Brenzel, 2020; Kosyakova and Brücker, 2020) and face restrictions in access to healthcare services (Norredam et al., 2006; Jaschke and Kosyakova, 2021).

These experiences have a negative impact on refugees' mental and physical health (Phillimore, 2011; Walther et al., 2020; Ambrosetti et al., 2021; Jaschke and Kosyakova, 2021), which subsequently hampers their socioeconomic integration (De Vroome and van Tubergen, 2010; van Tubergen, 2010; Ruiz and Vargas-Silva, 2018). In turn, empirical research has only recently started to delve deeper into the consequences of trauma for the integration of refugees in destination countries, and the results are equivocal. While traumatic experiences are clearly negatively related to refugees' mental and physical health outcomes (Jaschke and Kosyakova, 2021), individuals with traumatic experiences seem to have better destination language skills (Hunkler and Khourshed, 2020) and invest more in job search than in educational attainment (Freitas-Monteiro and Ludolph, 2021). These unexpected patterns are attributed to a greater integration aspiration of refugees with traumatic experiences (Hunkler and Khourshed, 2020), who seem to be less forward-looking and prefer quick employment entry at the expense of job quality (Freitas-Monteiro and Ludolph, 2021).

Social networks, the importance of which has been emphasized in empirical studies dealing with immigrant labor market situation (Kogan and Kalter, 2020), are regarded as particularly essential for refugees due to their lack of destination language skills and less informed migration decisions (van Tubergen, 2011). At the same time, refugees are likely to possess fewer pre-migration social contacts in the destination countries than economic or family immigrants. Accordingly, either no or very small effects of social ties in destination countries on refugees' employment prospects or earnings have been reported (Waxman, 2001; Lamba, 2003; Allen, 2009). Evidence on the influence of post-migration social contacts is mixed. While van Tubergen (2011) found a detrimental effect of reliance on co-ethnic job-related social ties on the occupational status of refugees, the common conclusion in economic and sociological literature is that co-ethnic networks are beneficial for refugees' economic outcomes (Massey et al., 1998; Edin et al., 2003; van Tubergen, 2011; Martén et al., 2019; Gërxhani and Kosyakova, 2020; Stips and Kis-Katos, 2020). Furthermore, co-ethnic networks are essential to the emotional support that refugees need during the challenging time of finding their way in the host country (Beiser and Hou, 2017). By providing helpful information or practical assistance, co-ethnic contacts help immigrants get along and settle in destination countries (Baier and Siegert, 2018).

On the other hand, the resources that can be mobilized via co-ethnic networks of less advantageous groups, such as refugees, are less helpful for the newcomers than relationships with the native majority are. Studies have shown that being friends with natives and/or being member of a mainstream organization improves refugees' employment prospects (De Vroome and van Tubergen, 2010) and overall well being (Tip et al., 2019), similarly to other immigrants. Relying on a field experiment, Jaschke et al. (2022) further demonstrated the importance of mentoring by local volunteers for refugees' social integration and participation. However, on average refugees tend to interact less with the native population than economic migrants (Martinovic et al., 2011).

The female-specific adverse outcomes are partly explained by the presence of (small) children in the household (Kosyakova et al., 2022a), for which affordable childcare facilities are lacking (Koyama, 2015). Another important explanation relates to the differences in pre- and post-migration human capital (Kosyakova et al., 2022a). Compared to male refugees, women arrive with no or lower educational attainment and insufficient labor market experience (Brücker et al., 2020). As studies for Germany demonstrate, female refugees—particularly those with small children—invest less in country-specific human capital, such as language learning, schooling or training, after arriving in the destination country (Bernhard and Bernhard, 2021; Hartmann and Steinmann, 2021; Kosyakova et al., 2022a). While female refugees in Great Britain are more likely to participate in language programs than men, they tend to do so later because of unaffordable childcare, problems fitting classes around school hours, the absence of single-sex classes and a lack of confidence in formal education (Dumper, 2002; Cheung and Phillimore, 2017). Moreover, family responsibilities seem to hamper refugee women's social integration (Hartmann and Steinmann, 2021), which in turn translates into fewer opportunities on the labor market (Dumper, 2002; Cheung and Phillimore, 2017; Salikutluk and Menke, 2021; Kosyakova et al., 2022a), a situation which is not unique to refugee women.

Institutional contexts of reception and refugee labor market incorporation

At the contextual level, the legal requirements as well as the characteristics, structures and institutions of the host societies—the labor markets, the education systems and the social protection systems (Reitz, 1998; Kogan, 2007)—are of central importance to the integration prospects of the newcomers. The general climate of acceptance—the welcoming culture—as well as the extent of prejudice and discrimination against immigrants influence the integration process significantly. Specific for refugee migration is the context of refugee admission and special programs for the settlement and integration of refugees. As discussed below, the duration and smooth running of the asylum procedure, organization of asylum accommodation, granting of extended residence status and provision of integration courses by the government are important cornerstones for the integration of refugees.

Legal status

In most destination countries, refugees are subject to specific procedures to examine their asylum applications. During this process, refugees' access to the labor market and educational systems of the host countries is usually restricted (De Vroome and van Tubergen, 2010; Hainmueller et al., 2016; Bakker et al., 2017; Kosyakova and Brenzel, 2020). This limitation also applies in the case of rejected applications. The legal status can likewise indirectly affect labor market integration, for example by impairing refugees' investment into country-specific education and training (Damelang and Kosyakova, 2021) or destination language skills (Kosyakova et al., 2022b). The lower motivation for destination-specific investments could partially be attributed to the lower subjective probability of obtaining asylum and remaining in the destination country (Phillimore, 2011). The clarification of legal status, i.e., the decision and outcome of asylum procedures, is therefore a key factor in labor market integration (see Krahn et al., 2000). In Germany, just having a decision on an asylum application accelerates the start of a first employment and the transition to the first language course among refugee migrants (Kosyakova and Brenzel, 2020).

In contrast, long asylum procedures have been found to be detrimental to the social and economic integration of the newcomers due to legal insecurity, devaluation of human capital and potential depletion of working aspirations during the waiting period. This, in turn, may postpone or even impede the process of integration in the labor market and society of the host country. For instance, results for Switzerland have shown that each additional year of asylum procedures reduces the employment probability by 4–5% (Hainmueller et al., 2016). Also in Germany and in the Netherlands, a long duration of the asylum procedure produced negative effects on refugees' labor market integration (De Vroome and van Tubergen, 2010; Bakker et al., 2014; Kosyakova and Brenzel, 2020), impair destination-language proficiency (Damen et al., 2022) and delay entry into language courses (Kosyakova and Brenzel, 2020).

Settlement and residency requirement

Another distinctive aspect of asylum integration policies relates to the policies of refugee settlement and refugees' legal mobility restrictions. Concerned about the displacement effects on housing markets, residential segregation of refugees and the capacity of local labor markets to absorb large groups of refugees (Lastrapes and Lebesmuehlbacher, 2020; Fasani et al., 2022), many destination countries (e.g., Australia, Denmark, Germany, Ireland, Norway, Sweden, Switzerland, the UK, and the US) enforced spatial dispersal policies, which required refugees to settle in specific locations within the destination country (Larsen, 2011; Bansak et al., 2018; Martén et al., 2019; Brücker et al., 2020; Fasani et al., 2022). These settlement policies play a role in refugees' integration insofar as refugees are often allocated to municipalities in which housing is available but employment opportunities are scarce (Bevelander and Pendakur, 2014). Empirical evidence reveals that the labor market conditions refugees encountered upon arrival determine their economic and social integration (see e.g., Åslund and Rooth, 2007 for Norway; Larsen, 2011 for Denmark; Fasani et al., 2022 for cross-comparative evidence; Kanas and Kosyakova, 2022 for Germany).

Beyond restricting residency choice, some countries impose residency obligation rules that prohibit regional mobility. For instance, in 2016, Germany introduced a residency obligation for approved refugees with the aim to prevent geographical mobility and ethnic concentration. In a nutshell, refugees' receipt of social benefits is conditional on their residence in the federal state (or even municipality) in which their asylum application was processed for at least three years after approval of the application (Brücker et al., 2019). Similarly, in Switzerland, refugees with subsidiary protection are constrained to reside in the initial location for five years after arrival, which emphasizes the role of the first local reception context in refugees' labor market prospects (Martén et al., 2019). A practice of restricted residency requirements impairs geographical mobility among immigrants—and particularly among refugees—and as a result diminishes their employment chances (Brücker et al., 2019). Residing in areas with more favorable opportunity structures, including the structural conditions of the housing and labor markets, on the other hand, improves immigrants' labor market prospects (Edin et al., 2003; Fasani et al., 2022). Larger cities, for example, offer greater opportunities to access ethnic networks, which are considered beneficial in the initial stage of refugee settlement (e.g., Rooth, 1999). At the same time, refugees in rural areas seem to have regular exposure to the native speakers' networks, which could be beneficial for refugees' destination language acquisition (Khalil et al., 2022).

(Limited) provision of social services

The massive inflow of refugees in Europe in 2015 put their housing high on the agenda of local policymakers. In Germany, a rapidly growing number of newcomers and shortage of well-organized accommodation capacities forced authorities to seek for emergency solutions and organize living spaces in schools, former barracks, empty hotels, former business premises, and tent cities or container villages (Baier and Siegert, 2018). The growing shortage of housing in Sweden urged authorities to change their policy from economically compensating municipalities that are willing to take in refugees to imposing mandatory acceptance of refugees assigned by the state and organization of their accommodation (Emilsson and Öberg, 2021). However, predating the 2015 “reception crisis,” many destination countries failed to provide adequate accommodation for refugees (ECRE, 2019).

Upon their arrival, refugees are usually allocated to transitional accommodation, often with many other refugees, before they can move to permanent housing. The residential arrangements can influence refugees' quality of life and their structural integration, since life in temporary collective accommodations compromises privacy and autonomy and increases isolation from the local community (Adam et al., 2021; Siegert, 2021). The importance of stable and secure housing for refugees' mental health and overall life satisfaction is well-documented (e.g., Porter and Haslam, 2005; Walther et al., 2020; Ambrosetti et al., 2021; Jaschke and Kosyakova, 2021). However, the role of refugees' residential arrangements in the structural dimensions of integration (in the education system and the labor market) is subject to controversy. Whereas several studies report a negative correlation between residence in collective accommodations and the speed of transition into the first job (Bevelander et al., 2019; Kosyakova and Brenzel, 2020), others show that residence in collective accommodation is positively associated with school grades of refugee offspring (Will and Homuth, 2020).

Provision of language courses and labor market preparation activities

To facilitate the economic integration of refugee populations, European governments have established various policy tools, ranging from language courses (Bilgili et al., 2015; Konle-Seidl, 2018) to skills assessment and work preparation measures (Konle-Seidl, 2018; Kanas and Steinmetz, 2021; Riemsdijk and Axelsson, 2021). The mandatory language courses are often accompanied by integration courses and civic education to a “basic knowledge of the host society's language, history, and institution” (Goodman, 2011) and are more often available for refugees than for other immigrants in most EU countries (Zwysen, 2019; Kanas and Steinmetz, 2021). Overall, such language courses positively affect the economic integration of the newcomers (Clausen et al., 2009; Lochmann et al., 2019; Kanas and Kosyakova, 2022). Recent studies on refugees suggest that the successful completion of such targeted training is positively associated with destination language skills (van Tubergen, 2010; Kosyakova et al., 2022b) and labor market integration (De Vroome and van Tubergen, 2010; Battisti et al., 2019; Fossati and Liechti, 2020; Kosyakova and Brenzel, 2020).

Most European countries focus on mandatory measures such as knowledge of the language and the country to improve refugees' labor market integration (e.g., Austria, France, Germany, Netherlands, and the UK). Some countries—Denmark, Finland and Sweden—focus on refugees' economic incentives for participating in integration programmes and consider incentive-based measures as being more effective for refugees' integration (Qi et al., 2021; Riemsdijk and Axelsson, 2021). To create economic incentives and foster refugees' employment entry, Danish government, for example, sharply reduced welfare benefits for approved refugees in 2001, which effectively increased their economic integration (Rosholm and Vejlin, 2010; Andersen et al., 2019). Likewise, Swedish reforms that reduced duration of benefits' access but increased its amount simultaneously improving access to labor market preparation activities had beneficial effects on refugees' employment and earnings (Qi et al., 2021). Also in Germany, labor market and career counseling programmes were found to have a positive effect on refugees' integration prospects (Kosyakova et al., 2022a).

Credential recognition

As discussed above, immigrants' economic disadvantage in the destination country can be traced back to the difficulties in the transferability of certified skills from the origin countries and the low signaling value of foreign degrees for local employers (Damelang et al., 2019). Without formally recognized credentials, highly qualified refugees have restricted access to licensed occupations and have difficulties in properly signaling their skills to potential employers. For refugees, credential recognition appears to be even more challenging, since many of them arrive without formal documentation of their skills and education (Konle-Seidl, 2018) and have limited access to information about where and how to apply for recognition (Liebau and Salikutluk, 2016).

Licensing bodies' reluctance to recognize foreign educational and occupational credentials has been named a serious obstacle to refugees' integration in Canada (Swan et al., 1991; Aycan and Berry, 1996), particularly among professionals (Basran and Zong, 1998). Compared to other immigrants, refugees are more likely to have their applications for credential recognition rejected in Germany (Liebau and Salikutluk, 2016). German authorities have also been found to discourage some refugees from applying for credential recognition (Sommer, 2021). In Sweden, too, refugees are diverted to other career options (Khan-Gökkaya and Mösko, 2021). Many find themselves disenchanted and adjust their aspirations toward lower-qualified jobs (Smyth and Kum, 2010; Frykman, 2012).

In recent decades, many immigrant-receiving countries have developed and implemented policies and practices for skill and credential recognition (Konle-Seidl, 2018; Andersson, 2021). The procedure includes assessing whether foreign educational credentials are comparable to those in destination countries. Particularly in the so-called regulated occupations, e.g., teaching, nursing, and medicine (Smyth and Kum, 2010; Konle-Seidl, 2018), credential recognition is a prerequisite for entering the job market. Correspondingly, many highly skilled immigrants with qualifications in teaching, nursing, and medicine face considerable obstacles in (re-)entering their professions (Andersson, 2021) in destination countries with strictly regulated labor markets and vocationally specific skills requirements, e.g., Germany or Austria (Sommer, 2021).

Integration policy packages

Only few attempts have been made to assess whether immigrants and refugees perform better in labor markets in countries with more comprehensive integration policies (Cangiano, 2014; Kanas and Steinmetz, 2021). Empirical evidence suggests that more extensive labor market policies improve immigrants' structural integration and reduce refugees' disadvantage compared to other immigrants (Kanas and Steinmetz, 2021). Specifically, refugees' disadvantage is effectively reduced in countries with more extensive work and social security rights, policies that grant equal access to trade unions, equal working conditions and access to social security and housing benefits (Cangiano, 2014; Hooijer and Picot, 2015; Kanas and Steinmetz, 2021). Policies facilitating labor market access promote immigrants' structural integration by increasing their employment opportunities. By easing the transferability of immigrants' credentials and skills acquired in the countries of origin, policies that focus on access to general and targeted support (public employment services, education and training, credential recognition, and validation of skills acquired abroad) improve immigrants' structural integration. Overall, these policies seem to be less effective in reducing refugees' labor market disadvantages (Kanas and Steinmetz, 2021).

Social distances and discrimination

Refugees' difficulties in the host country's labor markets might also be related to hostility and prejudice on the part of the majority population (Esses et al., 2017). Aksoy et al. (2020) have convincingly demonstrated that negative attitudes toward migrants influence refugees' economic integration negatively. Furthermore, discrimination refugees might experience in the access to employment, housing and in everyday interaction might slow down their economic progress in the host country (Montgomery and Foldspang, 2008; Foroutan et al., 2017; Diekmann and Fereidooni, 2019). Whereas survey-based research and in-depth interviews capture self-reports of refugees' experiences with racism and labor market discrimination (Pichl, 2017; Diekmann and Fereidooni, 2019; Röder et al., 2021), experimental research is likely to directly quantify the extent of discriminatory behavior on the part of employers. In a series of correspondence tests, Arai et al. (2016) uncovered discrimination against job applicants with Arabic-sounding names in the Swedish context, with men being particularly affected.

The economic and cultural threat explanations—derived from the integrated threat theory of prejudice (Stephan and Stephan, 2000; Stephan and Renfro, 2002)—and particularly the classical differentiation between realistic (e.g., threat to one's well being) and symbolic (e.g., perceived threat to one's values and beliefs) types of threat are likely to account for negative attitudes toward newcomers. Whereas economically vulnerable groups largely fear labor market competition from the newcomers, the majority population of receiving societies are generally particularly worried about the threats newcomers might pose to their way of life, cultural values, and societal norms. There is further evidence that established immigrants and their offspring might also harbor resentment against newcomers, viewing them as potential competitors for the scarce resources and social welfare in the host country (Van Der Zwan et al., 2017). Yet, compared to the (Christian) majority population without a migration background, individuals with a migration background and those of Muslim faith appear to side more with newcomers (De Coninck, 2020).

Research demonstrates time and spatial variation in attitudes to refugees (Crawley et al., 2013; Friedrichs et al., 2019) as well as differences in attitudes to refugees and other immigrants (Coenders et al., 2004; De Coninck, 2020; Abdelaaty and Steele, 2022). For instance, young male asylum seekers are found to have a harder time to have their asylum claims recognized in regions with higher levels of xenophobia, in which young males are more likely to be classified as bogus immigrants (Ward, 2019; Gundacker et al., 2021). The same holds true for applicants of Muslim origin in regions with a particular anti-Muslim bias (Bansak et al., 2016; Gundacker et al., 2021). Notably, several studies report that refugees are perceived more positively than other immigrants in a number of European countries (Esses et al., 2013; Meidert and Rapp, 2019; De Coninck, 2020). De Coninck (2020) attributes this difference to the media framing of the two groups, whereas Meidert and Rapp (2019) discuss the role of deservingness in favorable attitudes to refugees. Abdelaaty and Steele's study (2022) has shown that individual support for economic immigrants is more consistently related to the respondents' economic situation, whereas attitudes toward refugees are moderated more by the host countries' political climate.

On the other hand, various studies demonstrated that the dramatic increase in refugees inflow in recent years provoked anti-refugee sentiments. For instance, Hangartner et al. (2019) have shown that natives' hostility toward refugees grew proportionally to the numbers of arrivals. Deiss-Helbig and Remer (2022), in turn, attributed deteriorated attitudes toward refugees not to the presence of refugees per se but to a rapid increase in refugees' group size in the neighborhood. Other studies demonstrated that terrorist attacks has driven anti-refugee sentiments (Czymara and Schmidt-Catran, 2017; Frey, 2021) or even induced xenophobic violence (Jäckle and König, 2017, 2018; Frey, 2020).

So far, little is known about whether refugee origins play a role in their public perceptions, and the existing findings are equivocal. In a conjoint experiment carried out in 15 European countries, Bansak et al. (2016) detect minor differences in attitudes to asylum seekers of different origins. Notwithstanding that, asylum seekers from Kosovo are least likely to be accepted, whereas those from Syria and the Ukraine are most likely to be accepted. The attitudes to those fleeing Afghanistan, Iraq, Pakistan, and Eritrea are somewhere in between. De Coninck's (2020) cross-national study of Belgium, France, the Netherlands and Sweden reports more positive attitudes toward newcomers (both refugees and immigrants) of European origin. von Hermanni and Neumann (2019), on the other hand, report lower acceptance of refugees from Eastern Europe than of refugees from Africa or the Middle East in Germany. These findings thus seem to resonate, albeit inconsistently, with previous research that has identified a stable ranking of ethnic groups, with North Europeans at the top, followed by East and South Europeans, and African and Middle Eastern groups at the bottom of the ranking (Hagendoorn, 1993).

The sociopsychological mechanisms named responsible for such ethnic hierarchies are stable ingroup preferences (Tajfel, 1982) and stereotypes (Allport, 1954). Cultural and socioeconomic status differences are among possible sociological explanations for existing ethnic hierarchies, particularly under conditions of perceived threat from the outgroup (Pepels and Hagendoorn, 2000). Hagendoorn (1995) contends that the criteria for assigning social status may differ for majority and ethnic minority groups: Whereas majority groups rank order ethnic groups primarily based on cultural differences, ethnic minorities rank order ethnic groups primarily in terms of socioeconomic status differences.

Concluding remarks

Building on a considerable body of research on the recent refugee migration, this paper provided a comprehensive literature overview on the patterns of refugee labor market integration in Western countries and the determinants of its success or failure. Our focus laid on the major correlates at both individual and contextual levels, demonstrating their unique contributions and interdependencies.

Considering the massive refugee inflow in European countries, the question about the medium and long-term integration prospects of newly arrived refugees becomes more and more relevant. Although the pertinent empirical research is still in its infancy due to the recency of refugee migration, the existing migration scholarship could provide variants for possible scenarios. The first scenario is more pessimistic and suggests that newcomers who face strong initial labor market barriers in the European host countries might be trapped in the lower segment of the labor market and face limited opportunities for occupational upgrading. Under certain conditions, these refugees' labor market inferiority might perpetuate and develop into persistent ethnic disadvantages. A more optimistic scenario is also possible, as the growing number and geographical concentration of newcomers might contribute to boosting these groups' economic success (Semyonov, 1988; Tolnay, 2001). The economic enclave perspective (Portes and Manning, 1986; Zhou, 1992; Logan and Alba, 1999) advocates that the urban areas with large concentrations of newly arrived may provide greater opportunities, especially for minority-owned businesses. These businesses, in turn, recruit employees of the same ethnic origin and thus increase their compatriots' employment and occupational prospects.

Which scenario prevails depends on the individual characteristics of the newly arrived refugees, on the one hand, and the structural characteristics and institutional regulations in the host countries, on the other hand. Given the regional allocation and restrictive mobility refugees face in many destination countries, it is up to future research to examine whether refugees with more favorable resources can circumvent the adverse consequences of initial labor market conditions.

The most recent research on refugees' incorporation is predominantly based on studies of young single men from Middle Eastern and African countries who face institutional and structural constraints and largely unwelcoming societal attitudes. Whether patterns of refugee integration pertaining to refugees arriving in 2015–2016 will be comparable to those of the Ukrainian refugees of 2022 is an open empirical question. What is already known is that there are striking differences to refugees in 2015–2016 regarding their socio-demographic structure, on the one hand, and reception situation, on the other hand.

The proportion of women among refugees from Ukraine is much higher than among other refugees due to the general military mobilization and the ban on leaving the country for men of working age, as well as the lower flight risks for women owing to open borders within the EU's due to visa-free travel and the activation of the EU's “Temporary Protection Directive”³ and shorter travel distances. On the individual level, a high proportion of minors and older people could imply that a considerable proportion of refugees from Ukraine will have to perform care tasks (Brücker, 2022), which is likely to slow down their economic integration. Yet, a high level of education among Ukrainian women and their pronounced labor market participation (The World Bank, 2022) promises favorable integration outcomes. On the contextual level, the EU's “Temporary Protection Directive” grants refugees from Ukraine a temporary residence permit without an asylum procedure (at least for one year) and gives full access to the labor market. Accordingly, Ukrainian refugees face legal certainty (at least in the short term) and bypass integration obstacles due to asylum procedure. Likewise, remarkable solidarity and ultimate support for the refugees from Ukraine (De Coninck, 2022) create a beneficial environmental context for economic and societal integration. Still, many refugees from Ukraine face a high level of uncertainty about the further course of the war and their potential return. This uncertainty, in turn, affects all aspects of labor market integration, which in one way or another depend on costly investments in host-country-specific human capital, including the acquisition of host-country language skills, the recognition of foreign degrees, and the acquisition of further vocational qualifications in the host country. Analogously, hiring workers also requires investment on the part of employers, which can also be hampered if the prospects for staying are uncertain (Bertola, 1988; Dixit and Pindyck, 1994).

The topics of refugees' medium- and long-term stratification patterns and the heterogeneity in refugee economic and social integration depending on their origin, individual characteristics and institutional contexts of their reception are possible avenues for future research. On the one hand, such research should help us better understand how immigrant selectivity shapes the outcomes of their economic and social integration. On the other hand, pronounced differences in a reception context among refugee arrival cohorts would provide a unique opportunity to understand which structural characteristics and institutional regulations are the most effective tools for refugees' economic incorporation. However, the precise role of structural characteristics and institutional regulations in the host country can only be determined with appropriate research designs, designs that allow for sufficient variation at the macro-level of host countries, regions or across time. Future research should also more actively utilize natural experiments to determine the causal effects of institutional factors in refugee economic incorporation. Thus, we close with a call for theoretical and methodological innovations in research on individual and contextual factors for refugees' labor market integration, which are likely to push forward our understanding of immigrant integration at large.

Author contributions

All authors listed have made a substantial, direct, and intellectual contribution to the work and approved it for publication.

Funding

YK acknowledges general funding from the Institute for Employment Research (IAB). IK acknowledges research funding from the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement No: 864683, Principal Investigator: IK).

Conflict of interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher's note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Footnotes

1. ^Henceforth, the term “refugees” is used colloquially and includes all persons who move to another country for humanitarian reasons (e.g., as refugees or asylum seekers) independent on their legal situation in the hosting country.

2. ^Originally, the existence of a triple disadvantage was shown for women from less developed nations in Asia and Afrika (Raijman and Semyonov, 1997).

3. ^The full name of the Directive is “Council Directive 2001/55/EC of July 20, 2001 on Minimum Standards for Giving Temporary Protection in the Event of a Mass Influx of Displaced Persons and on Measures Promoting a Balance of Efforts between Member States in Receiving Such Persons and Bearing the Consequences Thereof.” It is also known under “Mass Influx Directive”.

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