Free «The Effect of Syrian Refugees Wave on the EU Labour Market» Essay Sample

Introduction

It is undeniable fact that a wave of Syrian refugees produces multiple impacts on the social, cultural, and economic insights of the European Union. If social and cultural issues are less tangible and significant, economic implications are the primary concern nowadays. There has been a little agreement on what exact effects will be produced with the surge of Syrian refugees, but a growing anxiety within European community is explicitly observable. This evidence is unpredictable and uncontrolled in many ways due to the external influences. Nevertheless, reaction of the European Union on the issue can be forecasted or at least discussed as a process of an independent economic entity. Besides, the basic rules of labour markets are applicable to this case. Hence, the wave of Syrian refugees produces moderate impacts on the labour market of the European Union as the situation is manageable owing to multiple factors. 

Theoretical Framework

Causes

It is becoming increasingly apparent that economic migration emerges due to low wages within the country of immigrants’ origin. Thus, immigrants and refugees move to countries with better employment rates and higher wages. Moving from the country of origin to a host country presupposes costs, which are often substantial. As a result, economic migration is possible under circumstances of affordable moving to the host country. Nevertheless, an extremely high salary may become a stronger factor in spite of the fact that moving is unaffordable (Foders & Langhammer 2006). Such evidence can be justified with the fact that an immigrant is able to benefit from an expensive moving after a long term of employment in the host country. Overall, correlation between wages in the host country and expenses on migration is the main determinant of economic migration. In such way, it can be presented with a formula: PV^h – PV^o– M where PV^o is wages in the country of origin, PV^h  - wages in the host country, and M is costs of moving.

As a consequence, an ability to grow a larger capital is available in countries with better employment rates and economics. Purchasing needs of immigrants and refugees considerably differ from needs of the local citizens of the host countries, so that immigrants find much better opportunities there (Czaika 2009). At the same time, they are still able to satisfy their purchasing needs in the country of origin, where standards of such needs have a lower value (Omari & Paull 2016). Purchasing needs of refugees, however, change within a period of living in the host country. Consequently, the need arises to find a better job for satisfaction of their new demands. In the majority of cases, it is not possible because refugees do not have the same rights as the citizens of the host country (Verme et al. 2016). Even though host countries are usually unable to address this issue immediately, economic migration exists in such form within the European Union.

Effects

A higher number of workers implies depreciation of the labour produced by a single worker. Hence, average wages become lower (Borjas 2012). It is a simple principle of labour market, but it is not entirely applicable to the cases of employing immigrants and refugees. Labour market is closely attached to business, so that value of wages is also determined by the production of a single good, capital (stock, as well as rented), and meeting a current demand (Borjas 2012). This is the plainest market model and it suggests that wage elasticity will worsen in a short term. Conversely, depreciation of wages is highly unlikely in a long perspective, provided that distribution factor is not changed (Borjas 2012). Increase in workforce available leads to facilitation of production and distribution, which positively reflects on meeting current demands (Borjas 2012). In terms of homogeneous economy, distribution itself will be enhanced, while influence on wages does not have any long term implications (Card 1990). At the same time, long-term effects can potentially emerge due to unpredicted factors (Borjas 2012). As a result, economy and labour market of host countries may experience three sorts of scenarios: integration of refugees and further employment; development of small business by refugees; and static situation, which should be addressed in terms of appropriate policy-making. 

Integration of refugees is usually a long process due to poor participation and unwillingness to change a lifestyle in the host country (Pachauri 2015). It is justified evidence, once refugees initially seek for a safer accommodation and living conditions. Nevertheless, many of them are reported to receive a tertiary education and adjust to applying for a new occupation in the host country (Pachauri 2015). As a result, the employment of refugees can be a positive effect, as long as they are able to become an equal substitution for local workforce. Surprisingly, gaining of such effect can be hardly observed within the European Union because many employers place social, cultural, and educational barriers for Syrian immigrants (Pachauri 2015). Under these circumstances, a wave of Syrian refugees’ surge could be a distinct benefit for the EU in case the governments deploy a reasonable policy-making.

Empirical Evidence

Statement of Current Impacts

The recent forecasts and predictions suggest that the wave of Syrian refugees will not make a significant impact on the European labour market. Allocation of occupation skills is almost the same among Syrian refugees in comparison with citizens of host countries (Aiyar et al. 2016). Consequently, the employment rates will be nearly unaffected in a short perspective. Considering a long term goals, an expected change will be not higher than 1% within the following year (Aiyar et al. 2016). At the same time, integration of immigrants is predicted to result in a progressive form of employment, which will be beneficial for the European labour market and economy as a whole (Aiyar et al. 2016).

Average impacts of the refugee wave are also estimated in regards to formal and informal types of employment. Therefore, informal employment may suffer 4% of decrease meanwhile formal employment will be generally unaffected (OECD 2015). It is certainly true, since formal employment presupposes requirements that can be hardly met by an average Syrian refugee. Beyond a doubt, long-term effects are still possible. Shifts in economic layout, social, and political insights are unavoidable in that regard (OECD 2015). It is fair to ask in what exactly way such changes will occur, but a wide range of external factors make this question impossible to answer at least now (Chapman 2014). Extents of integration or hypothetical possibility of backward outflow of refugees would be underpinned with outcomes of military conflict in Syria and other involved countries (OECD 2015). At any rate, present impacts of the refugees’ wave from Syria are measurable.

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Extents of Produced Effects

First of all, it is informative to note that a current extent of impacts produced on the European labour market with the wave of Syrian refugees is not strong (Dustman & Peterson 2005). As it has been already mentioned, integration of refugees will take a considerable time, which is why a large presence of refugees within the European Union does not involve an instant effect (Tumen 2016). In addition, wage elasticity will be not affected much in a short term meanwhile a long perspective will leverage presence of skilful Syrian workers (Tumen 2016). Integration will facilitate high employment rates among refugees, so that they will obtain a previously unavailable market niche (Cortada 2015). A large presence of recently graduated refugees will provide European business with a profitable source of workforce capital investment (Aldcroft & Morewood 2013). In such way, the effects of the refugees’ surge will be completely revealed after a longer period.

However, a positive connotation of such extents is possible in the event of appropriate decision-making and policing of the European governments. For now, extents of the produced effects suggest that the European Union has to make a right decision otherwise the wave of refugees’ surge may have adverse results (Tumen 2016). It is certainly true, which is why all outcomes are expected in the future. The current situation does not involve any initiatives of policy-making aimed at simplification of refugees’ employment (Kerr & Kerr 2011). On the one hand, it is a justified process: the European Union is currently busy with provision of minimal accommodation for refugees, and the issue of labour market is currently not discussed properly (Tumen 2016). Generally, current extents of the produced effects are moderate, as long as many outcomes will produce their effect in the future, and major part of them depends on external factors and decision-making of the European governments. Consequently, only potential outcomes can be predicted.

Possible Outcomes

The most frequently discussed outcome of the Syrian refugees’ wave is a gradual integration of the immigrants with a significant contribution to the labour market of the European Union. It is becoming increasingly difficult to ignore the fact that politicians, as well as researchers share an optimistic view on the issue. In contrast, it has already been mentioned in the current study that the process of integration could be boosted provided that the governments simplify conditions for employment and education of refugees. Recently employed Syrians occurred to possess the same amount of working skills with relatively the same quality, so that absence of favourable policies is an obstacle in the current situation (Noblit & Pink 2016).

In the event of the Europe’s negligence of facilitating policies, an impact of arriving Syrian refugees will worsen labour market. A number of employed workers formally, as well as informally will be unable to meet growing demands, since refugees will still have minimal purchasing needs. As a result, the European Union will have to adjust to this situation otherwise adverse effects will respectively worsen (Jazairi 2013). Experts assume that the European government will be capable of adjusting to such a drastic change, but the cost and outcomes will be entirely different from the first scenario (Thompson 2015). As a result, a drastic change in policies is the third potential scenario. It is the least possible strategy, due to the evident problems with accommodation and registration of arriving Syrians. Besides that, social protests keep emerging in various European cities, which is why a considerable change in the governmental framework concerning refugees’ employment is not expected in that regard (Bystrom & Frohnert 2013). Surprisingly, situation with impacts on the European labour market cannot be addressed until social and cross-cultural issues are a persistent obstacle (Schriwer & Lenze 2014). Thus, the first scenario is the most possible and justified in regard to the present factors.

Conclusion

It is appropriate to make a general comment on the fact that the wave of Syrian refugees makes a currently moderate impact on the labour market of the European Union. It can be explained by the fact that many outcomes will become explicit in a long perspective and under specific circumstances. The second explanation of such statement is based on the fact that increase in the workforce does not necessarily mean a substantial decrease in wages. On the contrary, the growing number of qualified workers will enable the European business meet better demands and obtain new market niches. The future of the labour market, as well as of the European economy as a whole still depends heavily on reasonable decision-making, which is predicted with the majority of researchers. They suggest that as soon as Syrian refugees integrate, they will obtain qualification of the same quality and hence form a good sector for capital investment.