Rival guests or defiant hosts? The local economic impact of hosting refugees

This article investigates the local economic cost of hosting refugees. Using administrative data in France, we show that the opening of small housing centers for refugees decreases the economic activity in hosting municipalities. We demonstrate that this downturn is related to a decline in the population by around 2% due to fewer people moving to hosting municipalities. We show that this avoidance behavior of natives results from prejudices, and is unlikely to be driven by a labor market supply shock from the arrival of refugees. We also estimate the aggregate cost of hosting refugees.

Automated summary

The article investigates the local economic cost of hosting refugees in France and finds that opening small housing centers for refugees decreases economic activity in hosting municipalities, mainly due to a decline in the local population. The avoidance behavior of natives is driven by prejudices rather than a labor market supply shock from the arrival of refugees.