Impact of refugee population on development: A comparative analysis for the case of host economies

Issue: 1/2018

Mohamed Kouni

Assistant professor of economics at the Higher Institute of Business Administration, University of Gafsa, Rue Houcine Ben Gaddour, Sidi Ahmed Zarroug, Gafsa, 2112, Tunisia.

This study was carried out to investigate the relationship between refugees and development in host economies from a macroeconomic point of view. The results obtained show that this relationship is non-linear. The empirical results demonstrate that refugees have a positive and significant direct effect in high and lower-middle-income countries. A positive and significant indirect effect of refugees through labor force and RD channels is also present in the same groups. In upper-middle-income and low-income countries, the direct effect of refugees is negative and significant. Similarly, the indirect effect of the refugee population on development through labor force channel is also negative and statistically significant. However, the indirect effect of refugees through RD channel is statistically significant only for the low-income country group.

DOI: 10.2478/revecp-2018-0005
JEL: O1, C32, O4, F22
Keywords: Economic development, GMM-method, growth, refugees.

ALIX-GARCIA J., SAAH D. (2008). The effect of refugee inflows on host communities: evidence from Tanzania. Working Paper, University of San Francisco. Available at:

ARELLANO M., BOND S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies 58: 277-297

ARELLANO M., BOVER O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics 68: 29-51

BAEZ J. E. (2011). Civil wars beyond their borders: The human capital and health consequences of hosting refugees. Journal of Development Economics 96(2): 391–408.

BLUNDELL R., BOND S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87: 115—143. DOI: 10.1016/S0304-4076(98)00009-8

BORJAS G. J. (1994). The economics of immigration. Journal of Economic Literature XXXII: 1667-1717.

FREIDBERG R. M., Hunt J. (1995). The impact of immigrants on host country wages, employment and growth. The Journal of Economic Perspectives 9(2): 23-44. DOI: 10.1257/jep.9.2.23

GOMEZ M. P., CHRISTENSEN A., ARAYA Y. Y., HARILD N. (2010). The impacts of refugees on neighboring countries: a development challenge. World Development Report background papers, 2011. Washington, DC: World Bank. 

GROSSMAN G., HELPMAN E. (1991). Innovation and Growth in the Global Economy. MIT Press, Cambridge MA.

JACOBSEN K. (2002). Can refugees benefit the state? Refugee resources and African state building. Journal of Modern African Studies 40(4): 577–596. DOI: 10.1017/S0022278X02004081

JACOBSEN, K. (2001). The forgotten solution: Local integration for refugees in developing countries. New issues in refugee research paper, 45.

KIBREAB G. (1985). African refugees: Reflections on the African refugee problem. Trenton, NJ, USA: Africa World Press.

KREIBAUM M. (2016). Their Suffering, Our Burden? How Congolese Refugees Affect the Ugandan Population. World Development 78: 262–287. DOI: 10.1016/j.worlddev.2015.10.019

LI P. S. (2008). World Migration in the Age of Globalization: Policy Implications and Challenges. New Zealand Population Review 33/34: 1-22.  

MAYSTADT, J., VERWIMP Ph. (2009). Winners and losers among a refugee-hosting population. CORE Discussion paper. May.

ROMER P. M. (1990). Endogenous technological change. Journal of political economy 98(5): 71-102. DOI: 10.1086/261725

SHELLITO, K. (2016). The Economic Effect of Refugee Crises on Host Countries and Implications for the Lebanese Case.  Joseph Wharton Research Scholars. Available at

UNHCR, (2010). Convention and protocol relating to the status of refugees.