The Labor Market Consequences of Hosting Refugees

During the 1990s, the northwestern region of Tanzania experienced a large inflow of refugees. Using panel data (pre- and post-refugee inflow), we estimate the labour market consequences of hosting those refugees. Results are consistent with immigration affecting the allocation of natives across economic activities. Greater exposure to the refugee shock resulted in Tanzanians having a higher likelihood of working in household shambas or caring for household livestock and a lower likelihood of working outside the household as employees. The latter effect was particularly strong for Tanzanians doing casual work before the shock. This coincides with anecdotal evidence of refugees concentrating in casual waged work in Tanzania and competing directly with Tanzanians for those jobs.