of refugees in high-income countries, refer to Brell et al. (2020) and for an excellent review of the existing studies on the impact on the labor market of the host countries see Verme and Schuettler (2021). Among the general facts that have been established in the literature is that refugees have worse integration outcomes such as employment probabilities and wages in high-income host countries than economic migrants. In the medium and long run (10 to 20 years), even if employment probabilities of these two groups of migrants converge, wage gaps are still persistent (Brell et al. 2020; Fasani et al. 2020b). Existing studies have also shown heterogeneity of the effects by gender, age at arrival and level of educational attainment and skills. However, these explanatory factors do not explain a significant share of the variation in the observed migrant-refugee gap in labor-market outcomes (Brell et al. 2020).

The literature has mainly examined separately a limited number of initial conditions: primarily the role of labor market conditions (i.e., unemployment), and the role of networks. The country-specific studies discussed in what follows rely on exogenous government placement policies allocating refugees across locations, which allows exploiting the exogenous variation in local labor market conditions.

Access to the labor market of the host country after arrival is important, and limitations<sup>16</sup> or exposure to high levels of local unemployment may have long-term consequences. The evidence in the case of refugees has consistently found that less favorable initial conditions in the labor market may have long-term effects on refugees’ employment probabilities and earnings.

Åslund and Rooth (2007) show the effects of the initial conditions in terms of unemployment rates, encountered by refugees at arrival on long-term earnings and employment in Sweden. To document this, the authors use the FLYDATA, which offers detailed information on all refugees who received a residence permit between 1987 and 1991. Data on labor market outcomes come from the Sweden Longitudinal Individual Study. The authors are thus able to follow individuals over time until 1998. In comparing refugees entering Sweden during an economic boom and during severe and unexpected recession, the authors show that high unemployment rates at arrival have negative effects for at least ten years.

Aksoy et al. (2020) focus on refugees who arrived in Germany between 2013 and 2016 and were subsequently interviewed in the framework of the IAB-BAMF-SOEP survey. The authors examine the role of labor market conditions and attitudes towards migrants at the time of refugees’ arrival. Their identification relies on the quasi-random allocation of refugees across counties. They find that high unemployment rates at arrival predicts future lower employment rates, lower earnings, and lower human capital investment. Conversely, positive attitudes towards migrants promote economic and social integration. Furthermore, integration outcomes are equally affected by both factors.

Another stream of the literature has examined the role of spatial concentration of co-ethnics, and how this affects refugees’ pattern of integration in society. Specifically, existing studies have examined residential integration by focusing on the size of the ethnic enclaves. In the sociological literature, early descriptive studies examined segregation through the enclave setting and its role in shaping the integration of migrants into the labor market of the host country (e.g., Wilson and Portes (1980); Sanders and Nee (1987); Massey and Denton (1988)).

More recently, in the economics literature, Edin et al. (2003) look at the impacts of living in ethnic enclaves on the labor market outcome for refugees in Sweden. They rely on the placement

> 16. For example, a few studies have examined the role of employment bans. Fasani et al. (2020a) investigate the medium to long-term effect of temporary employment bans on labor market outcomes for refugees in 19 European Countries, and find that bans at arrival reduces employment probability for refugees by 15 percent once the ban is lifted. This negative impact is driven primarily by reduced labor market participation. The authors also document that these bans have consequences on labor market participation even ten years after arrival in the country and that they negatively affect social integration in the long-run. Similarly, Marbach et al. (2018) use a policy change in Germany to assess the impact of labor market entry bans at arrival on future employment rates, which led different refugee cohorts to face different waiting times before entering the labor market. They find that employment rates 5 years after entering the labor market are 20 percent lower for individuals that had to wait seven months longer upon arrival. Moreover, the gap disappears after 10 years in the labor market. Together these findings suggest that long bans on labor market entry of refugees have long lasting effects on economic and social integration.

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