Are Asylum Seekers More Likely to Work with More Inclusive Labor Market Access Regulations?

This paper evaluates whether inclusive labor market policies increase the labor market participation of asylum seekers, by exploiting the variation in asylum policies in Swiss cantons to which asylum seekers are randomly allocated. During the period from 2011 to 2014, the employment rate among asylum seekers varied from 0 percent to 30.2 percent across cantons. The authors find: (a) labor market access regulations are responsible for a substantial proportion of these differences, in which an inclusive regime increases participation by 11 percentage points; (b) inclusive labor market access regulations are more beneficial for asylum seekers who speak a language that is closer to the language in their canton of residence; (c) the activation and education of asylum seekers in integration programs is a substitute to early employment and related to slightly lower employment rates; and (d) there is no evidence that more or less generous social welfare payments are related to employment. The authors conclude that inclusive labor market access regulations substantially increase the employment chances of asylum seekers, in particular if the language distance is short.