Impact of Syrian Refugees on the Turkish Labor Market

This research study explores the impact of Syrian refugees on the Turkish labor market, focusing on factors such as informal employment, workforce demographics, and regional effects. The analysis considers the challenges faced by Syrian refugees in accessing formal employment opportunities and the perceptions of Turkish locals regarding job competition. Various data sources and a conceptual framework are utilized to estimate the effects of refugee inflows on different segments of the labor market in Turkey.

• Syrian refugees
• Turkish labor market
• Informal employment
• Workforce demographics
• Job competition

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1. The Impact of Syrian Refugees on the Turkish Labor Market November 20, 2015 Ximena Del Carpio (GSPDR) Mathis Wagner (Boston College)

2. Syrian Refugees in Turkey 2 War in Syria: 4 million refugees, nearly 8 million internally displaced. 1.8 million in Turkey (remainder primarily in Jordan and Lebanon, and moving west) 85% have left camps, but without work permits (for foreseeable future) 2014 survey finds 56% of Turkish agree with Syrians take our jobs (69% in border provinces). Impact Syrian Refugees - Del Carpio and Wagner

3. Literature Review 3 Vast literature on voluntary migration, lack of evidence on labor market effects of forced displacement (Ruiz, Vargas- Silva 2013, Mabiso et al 2014). Most of that is on camps: Alix-Garcia Saah 2009, Maystadt Verwimp 2014, Ruiz Vargas-Silva 2015, Kreibaum 2014. Closest to work on immigration shocks, e.g. Card 1990, Friedberg 2001, Glitz 2011, Ayedemir Kirdar 2013, Dustmann Sch nberg Stuhler 2015, Calderon Ibanez 2015. Complementary to Akgunduz et al 2015 and Ceritoglu et al 2015 which use diff-in-diff and 2012 data to estimate impact of Syrians in camps. Impact Syrian Refugees - Del Carpio and Wagner

4. Data and Conceptual Framework 4 For Turkish: annual labor force survey For refugees: number in 26 regions in 2014 Idea: Refugees have not been issued work permits and so will work informally. Look at impact across groups of Turkish. Model : supply shock for those working informally, demand shock for those working formally. IV deals with measurement error. 1. 2. 3. 4. Impact Syrian Refugees - Del Carpio and Wagner

5. Descriptive Statistics (For Employed in 2011) 5 Employment Type % By Category % Informal Full/Part Time % By Category % Informal Employee 63.0 25.1 Full-time 92.5 29.7 Employer 5.1 20.8 Part-time 7.5 74.7 Self Employed 18.3 63.7 Gender Unpaid family 13.6 92.0 Male 78.3 31.9 Female 21.7 37.1 For Employed (Regular, Self or Employer) Age (years) Workplace 15 - 24 85.7 45.5 Field, garden 16.3 74.1 25 - 64 14.3 31.0 Regular workplace 72.8 24.0 Education Market place 0.6 66.9 Primary 59.3 46.8 Mobile or Irregular 7.7 76.1 High School 21.6 19.1 At home 2.5 94.9 Higher Educ. 19.1 6.0 Impact Syrian Refugees - Del Carpio and Wagner

6. Estimating Equation 6 Yitr= Rrt+ ft(Dr) + g(Xirt) + r+ t+ irt Yitr= outcome of person i in subregion r and year t Rrt= refugee / population ft(Dr) = year-specific fourth-order polynomial of distance to border r= subregion fixed effects t= year fixed effects g(Xirt) = individual covariates Impact Syrian Refugees - Del Carpio and Wagner

7. Instrument 7 1 s IVrt= psRt Tsr Tsr= distance between Syrian governorate s and Turkish subregion r s= share of all refugees from Syrian governorate s Rt= total number of refugees First-stage t-statistic = 3.6 Impact Syrian Refugees - Del Carpio and Wagner

8. Employment Impact 1 IV Estimates 8 Regular Irregular Formal Informal OLS 0.269 0.019 0.626*** -0.359 Refugee / Popn (0.166) (0.299) (0.140) (0.290) IV 1.115*** -2.425*** 1.474*** -2.612*** Refugee / Popn (0.339) (0.891) (0.555) (0.935) Note: regular is defined as employee in regular workplace, irregular is other employees Impact Syrian Refugees - Del Carpio and Wagner

9. Employment Impact 2 IV Estimates 9 Regular Irregular Formal Informal Female -0.043 (0.213) -0.02 -2.578*** (0.738) -1.32 0.218 (0.270) 0.11 -2.922*** (0.887) -1.49 Refugee / Popn Rescaled Male 2.165*** (0.618) 1.06 -2.305** (1.078) -1.13 2.550*** (0.896) 1.25 -2.330** (1.027) -1.14 Refugee / Popn Rescaled Primary 1.507*** (0.543) 0.82 -3.043*** (1.025) -1.65 1.497*** (0.546) 0.81 -3.016*** (0.977) -1.64 Refugee / Popn Rescaled Secondary 1.190** (0.470) 0.15 -1.352** (0.601) -0.17 0.690** (0.321) 0.08 -2.414*** (0.702) -0.29 Refugee / Popn Rescaled Higher 0.172 (0.875) 0.02 -0.098 (0.144) -0.01 1.781*** (0.608) 0.18 -0.863** (0.343) -0.09 Refugee / Popn Rescaled Impact Syrian Refugees - Del Carpio and Wagner

10. Wage Impact 10 Male Female Formal Informal Decomposition (in 2011 Turkish Lira - at 2% refugee / popn) 97 91 Absolute Wage Change Explained by: Observables Marginal Product 55 73 28 69 185 -93 3 94 -20 53 IV Estimates 7.228* (4.292) 4.572** (2.091) 2.409* (1.429) 3.544 -2.275 Refugee / Popn Impact Syrian Refugees - Del Carpio and Wagner

11. Placebo Tests 11 2009-11 pre-trends: 1. correlated with refugee flows (border subregions) and instrument, 2. but not significant with distance controls. 2012 education reform: 1. strongly correlated with refugee flows, 2. but not significant with distance controls. Impact Syrian Refugees - Del Carpio and Wagner

12. Thank you! Ximena Del Carpio(GSPDR) Mathis Wagner (Boston College)