policy recommendations.

The rest of the paper is organized as follows. Section 2 presents the background of the paper, describing the context, history of forced displacement and the current policy that regulates the asylum process and allocation of refugees across locations. Section 3 provides an overview of the existing literature, describes the theoretical contribution of this study and discusses the main hypotheses that will be tested in the analysis. Section 4 presents the empirical strategy, including a description of the data, research design and identification strategy. Section 5 presents the empirical findings and positions them within the existing literature. Section 6 provides concluding remarks and policy recommendations.

# **2 Context**

## **2.1 Country and Regional Context**

Europe is experiencing the largest refugee crisis since the end of the Second World War, with a sharp increase in the total number of refugees since 2010. The number of refugees has had a three-fold increase in European countries between 2013 and 2017 (Donato and Ferris 2020), reaching today an estimated stock of 2.9 million.<sup>3</sup> In this context, Switzerland has been at the forefront in hosting refugees. Figure 1 shows the evolution in the total number of refugees from 1960. The number of refugees has steadily increased over time reaching a peak in the 1990s as a result of the Balkan Wars, and then again starting from 2010s, with the number of sheltered refugees that more than doubled from 48,813 to 110,162 over 2010–2019.

Switzerland can be regarded as the ultimate example of a multicultural society. The Swiss Confederation consists of 26 cantons in which four official languages are spoken: German, French, Italian, and Romansh. These languages divide the territory into four language regions with a total population of about 8.5 million individuals.<sup>4</sup> Moreover, Switzerland is one of the three countries in the world with the largest share of foreign-born population: about 30 percent of the total population is foreign-born,<sup>5</sup> and about 38 percent of its permanent residents aged 15 or older have a migrant background.<sup>6</sup> The multicultural context in Switzerland goes along with a long humanitarian tradition. Table 1 shows the top 10 European countries in terms of number of refugees hosted. It is possible to observe that Switzerland, in spite of being a relatively small country (in terms of population), ranks number four in terms of share of hosted refugees. Only Sweden, Austria, and Germany host a higher share of refugees in the most recent year, 2019. This prominent role in hosting refugees is not a recent phenomenon. Figure 2 shows that over the past 60 years Switzerland has always been among the top four receiving countries, and before 1983 Switzerland ranked first in Europe in terms of share of hosted refugees. Switzerland has been part of an international process of convergence in sheltering refugees, resulting in new models of integration (Probst et al. 2019).

## **2.2 History of the Forced Displacement Context**

The Swiss Confederation in its current form adopted a federal constitution in 1848. Individual cantons have long had the tradition of hosting refugees, and even today play a key role. Piguet (2019) documents the history of asylum on the Swiss territory as going back to the Roman age when Scandinavians fled famine. During the Middle Ages cities in Switzerland followed the trend of most European cities hosting

> 3. World Bank Population Data on Population and Refugees: https://data.worldbank.org/. [Data accessed on April 17, 2021].

> 4. World Bank Population Data: https://data.worldbank.org/. [Population data accessed on April 17, 2021].

> 5. OECD (2021), Foreign-born population (indicator). doi: https://doi.org/10.1787/5a368e1b-en (Website accessed on May 8, 2021). The top three countries include: Luxembourg (47.3%), Australia (29.9%) and Switzerland (29.7%).

> 6. Sources: The Federal Statistical Office, Swiss Labour Force Survey (SLFS). [Information retrieved from the Federal Statistics Office Website (https://bit.ly/2RM8xv5) on April 17, 2021].

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