further assume that by 2048 enrollment rates reach 100, 80 and 60 percent respectively at the primary, secondary and tertiary levels. For the optimistic scenario, we assume primary and secondary enrollment rates reach pre‐conflict levels in half the time, that is, by 2028, and by 2038, 100 percent and 80 percent respectively. For the tertiary enrollment rate, we assume it rises to 50 percent by 2028 (also in half the time compared to the pessimistic scenario) and 60 percent by 2038. By 2048, we assume enrollment rates reach 90 and 70 percent respectively at the secondary and tertiary levels. With these calculations we obtain years of schooling of 8.449 and 6.991 respectively by 2038 in the optimistic and pessimistic scenarios of the voluntary mobility case. The projected years of schooling in 2038 under the pessimistic scenario is roughly the same as the pre‐conflict value of 7.080. For the moderate scenario, we take an average of years of schooling under the other two scenarios, which gives a value of 7.718 by 2038.

Using the above, we obtain an average annual growth rate in human capital of 1.3 percent over 2019‐2048 under the optimistic scenario (1.3 percent over 2019‐2028, 1.4 percent over 2029‐2038, and 1.1 percent over 2039‐2048). For the pessimistic scenario, average annual growth amounts to 0.9 percent. That is, 0.4 percent over 2019‐2028, 1.0 percent over 2029‐2038, and 1.2 percent over 2039‐ 2048.<sup>51</sup> The human capital growth rate under the moderate scenario is a simple average of the growth rates under the other two scenarios. The average years of schooling and human capital growth rates remain similar in the scenarios of the forced repatriation case compared to the voluntary mobility case as there is little change in the population distribution by age groups.

## _4.1.4 TFP_

Using the Kim and Loayza (2019) empirical model, we assume a gradual rebuilding of the TFP determinants index which was estimated at 15.98 in 2018. Under the optimistic scenario, we increase this index to 35.42 by 2028 and 75.76 by 2048 based on the trajectory of the Republic of Korea’s index over the 30‐year period, 1985‐2014. Korea is the best performer in the sample of countries used in Kim and Loayza (2019). This gives average annual TFP growth of 1.4 percent over 2019‐2048 (0.1 percent over 2019‐2028, 2.1 percent over 2029‐2038, and 2.0 percent over 2039‐2048).

For the pessimistic scenario, we repeat the exercise but based on index of the United Arab Emirates (UAE), the best performer for the sub‐sample of MENA countries. This would imply an increase in Syria’s index to only 21.72 by 2028 (still below pre‐conflict level) and 32.74 by 2048. The corresponding average annual TFP growth over 2019‐2048 would be 0.3 percent (‐0.9 percent over 2019‐2028, 0.9 percent over 2029‐2048). For the moderate scenario, we assume TFP growth rates that are the average of the rates under the optimistic and pessimistic scenarios.

# **4.2 Simulation of the post‐conflict growth outlook**

For the simulations in this section, we keep the constant parameters (labor share and depreciation rates) unchanged from the values used in the pre‐conflict and conflict projections. Default initial conditions as of 2018 (GDP level, GDP per capita level, and K/Y ratios) are drawn from the outcomes of the central projection in Section 3. Table 6 details the calibrations and projections of growth drivers post conflict based on the discussion in Section 4.1. Under the baseline/moderate scenario of the voluntary mobility case, I/Y averages about 43 percent and 39 percent over 2019‐ 2028 and 2029‐2038; and, at 23 percent and 25 percent, respectively, under the pessimistic scenario. The investment shares are exceptionally high under the optimistic scenario, averaging 63 percent and 46 percent respectively in the first and second decades; but are closer to pre‐conflict levels. The

> 51 The slightly faster human capital growth rate in 2039‐2048 compared with the optimistic scenario is mainly because of there still being room for improvement in the primary enrollment rate in the pessimistic scenario.

27