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February 14, 2018

Cluster-Seminar Public Finances and Living Conditions

The Impact of Initial Placement Restrictions on Labor Market Outcomes of Refugees


February 14, 2018
12:30 - 13:30


DIW Berlin im Quartier 110
Room 3.3.002A
Mohrenstraße 58
10117 Berlin


Felicitas Schikora

This paper analyzes employment effects of a policy reform that was introduced as a measure for targeted integration of foreigners into local labor markets in Germany. The Residence Rule puts additional constraints on initial residence decisions for refugees after having received a permanent residence permit. Given that this reform applies to a subset of refugees only, it creates exogenous variation that I exploit in a Differences-in-Differences analysis. Using a novel data set, the IAB-BAMF-SOEP Survey of Refugees in Germany, the results suggest a negative effect of the reform on the probability to take up employment. This effect is robust to the inclusion/exclusion of covariates. Yet, since sample size in the post-treatment period is relatively small, some specifications yield statistically insignificant effects.