The Impact of Initial Placement Restrictions on Labor Market Outcomes of Refugees
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.
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Felicitas Schikorafschikora@diw.de+49 30 89789 326
Stefan Etgetonsetgeton@diw.de+49 30 89789 369
Aline Zuccoazucco@diw.de+49 30 89789 383