Implications of Forced Migration on Demographics, Labor Market, and Welfare

The seven years of the civil war in Syria has led to thousands of deaths and the flight of a quarter of the pre-war population from their homeland. This paper focuses on the effects of 3.5 million displaced Syrians on the Turkish economy via an intertemporal CGE analysis. The results highlight adverse labor market outcomes for natives and support similar findings in the related literature. On the other hand, due to increasing government expenditure intended to provide essential humanitarian services to incoming Syrians, the picture changes remarkably. Declining informal employment, lower inflation, and positive economic growth are favorable outcomes. These are traded-off against worsening the most vulnerable household groups' shares in total disposable income. Moreover, if some of the Syrians are formally employed, the economic growth and employment generation are getting stronger at the expense of even worsened size distribution of income.