25 unlike natives, refugees in Sweden cannot quickly integrate into the labor market in part because they do not speak Swedish. Eventually, they do, even though their participation remains less than natives. It is clear from the Swedish example and that of other countries that refugees or asylum seekers that are left in legal limbo and are not allowed to work cost the economy and the taxpayer dearly<sup>31</sup> .

A crucial assumption made by Ruist, and which is also the most controversial, is that refugees incur the full cost of pure public goods, including defense, infrastructure, and public administration, as natives. If instead, the assumption is that the cost of providing these public goods does not change materially with the arrival of refugees, the net transfer from the rest of the Swedish population to refugees is reduced to 0.2% of GDP.

Another caveat is that the fiscal impact of refugees in 2007 may not be representative of other time periods. In 2007, over 2/3 of the Swedish refugee population had been in the country less than 15 years, and over 1/3 less than 10 years, and it would be reasonable to assume that the fiscal impact of these relatively recent refugees would become more beneficial over time.

Comparing the effect of refugees on the economy with that of natives or economic migrants at just one point in time as is often done, can be misleading. If such comparisons are done early on after the arrival of refugees, as is the case in many countries today, they are bound to exaggerate the costs and underestimate the benefits of integrating them. If on the other hand, comparisons are done many years after they arrive, they underestimate the costs and exaggerate the benefits of hosting refugees. Instead, comparisons must be carried out over the lifetime of the refugee phenomenon, i.e. over one or two generations, and considering the time value of money. This is the method employed by a recent study of refugees in the United States, the object of the next section.

# ‐ <u>Long Term Fiscal Impact of Refugees</u>

As mentioned previously, the fiscal impact of Refugees depends crucially on the speed with which they start work. Clearly, the initial costs of receiving them will be higher if they remain in limbo as asylum seekers for long and are not allowed to work, which is often the case in European countries, for example. By contrast, in the United States, most refugees are resettled once their application has been cleared and they can work almost immediately upon arrival. Evans and Fitzgerald (2017) examine the experience of 19,298 refugees aged below 65 that entered the United States before the age of 45. The study, which covers a 20‐ year period to 2010‐2014, may not be representative of other countries, but is worth examining since it represents perhaps the most comprehensive attempt to examine the fiscal impact of refugees over an extended period.

> 31 One report estimated that Canada spends over $129 million annually on government transfers to those who are deemed as protected persons by Immigration and Refugee Board in Canada but still face numerous obstacles and delays before they could enjoy rights as permanent residents. (Coates & Hayward 2005) If automatic landing were implemented, the government transfer would decrease with an estimated savings of over $101 million. This research also shows that due to barriers in the labor market, refugees lose in total over $344 million in forgone income.