Socio-Economic Integration of Newly Arrived Refugees in Australia
Creators: name: Mazari, Harris Aziz
Publisher: name: RMIT University
Year: 2025
Subjects: classificationCode: 380108
subject: Health economics

description: Since its inception in 1950, the United Nations High Commissioner for Refugees (UNHCR) has aimed to assist refugees in resettling and integrating them into host countries. The UNHCR's role has become increasingly critical in the twenty-first century as global challenges have multiplied. Wars, famine, political instability, and climate change have more than doubled the number of displaced people worldwide from 51.2 million in 2013 to 117.3 million by 2023. Similarly, the refugee population has grown from 16.7 million to 37.9 million during this period (UNHCR 2023). This dramatic increase has heightened the importance of understanding and facilitating successful refugee integration in host countries.
While refugees may present short-term challenges to host countries, including initial settlement costs and resource allocation, substantial evidence suggests their long-term contributions significantly outweigh these initial costs. Studies from the United States, United Kingdom, and Germany demonstrate that refugees often outperform economic migrants in various economic metrics (Cortes 2004; Ruiz &amp; Vargas-Silva 2018). The Australian context reveals similar patterns; the Productivity Commission (2006) found that while refugees initially depend more on government services, this dependency decreases markedly after ten years, and after twenty years, they surpass other migrant groups in economic contribution. Research indicates refugees are twice as likely as average citizens to establish businesses (Legrain &amp; Burridge 2019), demonstrating their significant entrepreneurial potential and highlighting the importance of effective integration policies.
This research investigates the socio-economic integration of newly arrived refugees in Australia, adopting an economic psychology lens to explore the complex interplay of economic, social, and psychological factors. The study comprises three empirical chapters, each addressing a distinct aspect of refugee integration. The first chapter examines how pre-arrival trauma and post-traumatic stress disorder (PTSD) influence refugees' early economic outcomes. The second explores the effectiveness of Australian government support programs in improving the subjective well-being of refugees during their initial settlement period. The third investigates the role of altruism in remittance-sending behaviour, a critical yet underexplored dimension of refugee economics.
The analysis is based on data from the Building a New Life in Australia (BNLA) longitudinal survey, which follows 2,399 newly arrived refugees from 2013 onwards. The BNLA dataset is unique, as it captures refugees’ experiences within six months of their arrival, providing detailed insights into their early integration journeys. Most participants hold permanent humanitarian visas, offering a consistent legal framework for analysis. The study employs advanced econometric techniques, including bivariate mixed proportional hazard models, propensity score matching, and the Lewbel (2012) model, to ensure robust and credible findings.
The first empirical chapter focuses on the economic consequences of trauma. Drawing on measures of pre-arrival trauma and PTSD, the study investigates their impact on labour market outcomes such as employment status, income, and hours worked. The findings reveal that trauma has a lasting negative effect on refugees' early economic integration in Australia. Psychological factors, including self-efficacy, trust, and perceptions of belonging, mediate this relationship, highlighting the importance of addressing mental health and psychosocial challenges in integration policies. These results suggest that early interventions targeting trauma and fostering psychological resilience could significantly improve refugees’ economic outcomes.
The second chapter examines the role of government support programs in enhancing the well-being of newly arrived refugees. Using the Lewbel (2012) method to construct internal instruments, the study assesses both monetary and non-monetary forms of support. Contrary to expectations, the findings indicate that these programs do not significantly improve refugees' subjective well-being in their early years in Australia. Factors such as trust in government institutions, feelings of belonging, and loneliness appear to play a more critical role in shaping well-being than direct financial assistance. These insights call for a more holistic approach to refugee support, focusing on building social connections, fostering trust, and enhancing English language proficiency alongside financial aid.
The third chapter explores the altruistic motives underlying refugees’ remittance-sending behaviour. Despite facing economic challenges, many refugees prioritise sending money to family members abroad, often at the expense of their own financial stability. This chapter employs an instrumental variable approach, using Hofstede’s cultural dimensions as instruments, alongside propensity score matching for robustness. The results show that altruism, as measured by monetary donations and voluntary help, significantly increases both the frequency and amount of remittances. Employment status, family size abroad, and income are key predictors of remittance behaviour. These findings highlight the dual pressures refugees face—integrating economically in their host country while maintaining transnational ties.
This thesis makes several important contributions to the understanding of refugee integration in Australia. By focusing on psychological factors such as trust, self-efficacy, and belonging, the first study provides actionable insights for policymakers aiming to enhance refugees’ economic participation. The second study underscores the limitations of current government support programs, advocating for a more comprehensive approach that addresses refugees' social and psychological needs. The third study sheds light on the often-overlooked economic sacrifices refugees make to support family members abroad, emphasising the need for policies that consider their transnational obligations. Overall, this research highlights the multifaceted nature of refugee integration and the critical role of psychological well-being in shaping economic and social outcomes. The findings advocate for policies that move beyond short-term financial support to foster long-term integration through mental health support, community engagement, and targeted interventions that build trust and resilience. By leveraging the rich BNLA dataset, this thesis aligns with the survey’s aim to deepen understanding of the challenges faced by refugees in their early settlement period and to inform evidence-based policy development.