This paper examines the short-term effects of refugee arrivals on labor markets, crime, and voting behavior in Germany. Between 2014 and 2015, more than one million refugees arrived in Germany.
The authors exploit exogeneous variations in the number of refugees per county within and across states to isolate the effect of refugees on labor market, crime and election outcomes.
The analysis relies on several data sources including: (1) administrative records from the 16 German states on the allocation of asylum seekers to 401 subordinate counties; (2) data on registered migrants from the federal registry of foreigners (Ausländerzentralregister, AZR); (3) information on the locations and capacities of large-scale reception centers (EAEs); (4) quarterly unemployment data from the Federal Labour Office; (5) annual data on criminal activity and criminal suspects from the Federal Criminal Police Office; (6) data on election outcomes for the federal vote in 2013 and 2017, and vote polls; and (7) a variety of county characteristics from the Federal and States Statistical Offices’ regional statistics database, including per capita GDP, age structure, shares of the population that are male/female and German/non-German, and the share of the population receiving housing benefits.
Main findings:
- Counties with small refugee and asylum seeker inflows and those with large inflows appear to follow identical time trends in terms of unemployment, crime and voting patterns.
- There isn’t any evidence of displacement of native workers by refugees. An analysis of various labor market outcomes—unemployment rates, absolute unemployment numbers of immigrants from crisis countries, employment rates, and wages—indicate that recent migrants slowly enter the labor market without displacement or strong wage effects.
- Refugees struggle to integrate into labor markets. The marked increase in non-native unemployment, which parallels the increase in the number of immigrants who were granted asylum (and who therefore became eligible to work), indicates substantial difficulties of the German labor market to absorb this labor supply shock, at least in the short run.
- Crime increases moderately with larger asylum seeker inflows. Even after immigration offences are excluded from crime statistics, the number of asylum seekers allocated to a county is significantly and positively associated with increases in crime. A one standard deviation increase in migrant inflow is associated with about 123 additional crimes per 100,000 (equivalent to roughly a 1.9 percent increase). In particular, counties with bigger reception centers experienced increases in drug offences and violent crime, and a rise in the number of non-German suspects. 200 additional EAE beds per 100,000 inhabitants are associated with an extra 7.6-12.7 drug offences per county (equivalent to roughly a 2.5-4.2 percent increase).
- Right-wing parties, and the AfD party in particular, have fared comparatively less well in municipalities with larger inflows than in those with smaller inflows. Neither refugee inflows nor EAE capacities have a statistically significant impact on the AfD Party’s vote share, the electoral success of right-wing parties in general, or election turnout. The presence and size of an EAE decreases support for the AfD significantly—a one standard deviation increase in the number of asylum seekers reduces the AfD Party’s vote share by about 0.2 percentage points.
The authors conclude that: (1) a significant labor supply shock of low-skilled prime-age workers has not had a displacement effect on native workers or earlier immigrants, nor is there any evidence for negative wage effects; (2) the presence of asylum seekers is associated with moderate increases in crime rather than a large spike in crime, possibly driven by authorities devoting more resources to policing areas with larger asylum seeker presence; and (3) while there exists evidence on a macro-level connection between electoral success of anti-immigrant parties and increased refugee migration, local exposure to asylum seekers is associated with a small drop in the electoral success of right wing parties in Germany.