Refugee Crisis Will Test a European Economy Under Pressure
Cohen, Patricia. “Refugee Crisis Will Test a European Economy Under Pressure.” The New York Times, 16 Mar. 2022, https://www.nytimes.com/2022/03/16/business/economy/ukraine-refugee-crisis-europe-economy.html
This article provided an overview of the economic effects of the war in Ukraine. The conflict has led to the world’s fastest-growing refugee crisis since World War II. More than three million people fled Ukraine within three weeks of Russia’s invasion. The article gave information that led me to believe that the structural economic effects of the humanitarian crisis could create a stigma about Ukrainian refugees among Europeans.
The estimated cost of housing, transportation, food, and healthcare associated with the humanitarian crisis is $30 billion in the first year alone. Furthermore, the European Union has granted Ukrainians immediate permission to stay up to three years, get a job, and enroll in school systems. Some European countries such as Romania and Poland have also agreed to allow Ukrainian refugees to benefit from the same social and health benefits as their citizens. These benefits will be polarizing to Europeans because of the high taxes that they pay to receive public benefits which are allocated to refugees for free.
Ukraine has a relatively similar labor force compared to many western European nations. The refugees have similar education, work experience, and robust networks in destination countries. If refugees choose to seek asylum and settle in western Europe long-term, this will increase the labor supply. In the short run, this will increase competition for jobs among natives and drive the initial wage down. In the long run, the labor market will neutralize because those that cannot find employment will leave for new countries. Furthermore, the immigrants will create increased demand for goods and services, which will require more jobs. However, in a recovering economy with 13 million people unemployed in the European Union as of January, I believe that this will perpetuate the stigma of refugees among many Europeans.
4 thoughts on “Refugee Crisis Will Test a European Economy Under Pressure”
I’m curious about the exact details of this process, and I imagine it to be quite a disaster. The pure number of migrants heading toward the Western half of Europe is undoubtedly alarming. How have border controls been handling this? Are they giving out these 3-year visas right at the border? Also, I’m interested in seeing how future Econ Immigration classes study this affect the future.
The numbers associated with this refugee crisis are mind blowing and crazy to think that it had all happened so quickly upon Russia invading. I agree with you that these countries in the European Union might not be too fond of these Ukrainian refugees because of the short term effects in the labor market. In addition, the costs right away such as public benefits will be difficult to explain to many, even though they didn’t have many options other than fleeing the country.
This analysis is really great! Your point about the composition of the labor market between Ukraine and other Western European countries is really insightful. I am also wondering how the region will respond to the influx of immigrants, especially given that the economy is still recovering from the pandemic. Additionally, I wonder how this response will be different than the response from Europe during the Syrian refugee crisis.
The topic will be an interesting case study for future ECON Immigration courses for sure. Ukrainian refugees are entitled to three years of temporary protection in the EU. Through my research, I have not seen much about the VISA process. I am sure that there were times when borders were extremely congested. Poland took on about 3 million refugees which must have put pressure on its border. However, I do think that there has been an overwhelming response of support and I have not heard too many stories of Ukrainians being held up at borders.