# **2.1. Afghan refugees in Iran**

Iran is one of the leading refugee host countries in the world. The United Nations High Commissioner for Refugees (UNHCR) reports that 800,000 refugees live in Iran, of which 780,000 are Afghans. These are Afghans with a valid residence card (Amayesh card) whose stay is regularized as refugees. Besides, 275,000 Afghans live in Iran with passport and visa (UNHCR, 2021). However, the Afghan population living in Iran is much larger. Many Afghans live without any valid document to state their legal residence (undocumented Afghans). According to Iran’s 2016 census, more than 1.58 million Afghans live in Iran (2% of the population).

For decades, Iran has been the destination of seasonal workers, merchants, and pilgrims from Afghanistan. From the 1960s onwards, young Afghans migrated to Iran to seek temporary employment or study in Islamic seminaries. Nevertheless, the mass displacement of Afghans in Iran started 40 years ago. There were four significant phases of forced displacement of Afghans in the past four decades (Abraham, 2013). The military coup by the People’s Democratic Party of Afghanistan (PDPA), followed by Soviet occupation to assist the party against the Mujaheddin rebels in the early 1980s, created massive instability in Afghanistan. The spread of violence initiated the first phase of displacement and the two neighboring countries, Pakistan and Iran, were the major destinations. Even after the withdrawal of Soviet forces, the instability continued due to the internal power struggle and created another phase of displacement. The Taliban rise in the mid-1990s and the conflicts following the United States war in 2001 led to the third and fourth phases of Afghans’ forced migration.

The first phase of Afghans displacement resulted from the transformative vision of the Islamic revolution in Iran. With an emphasis on Islamic brotherhood, Iran followed an open-door policy toward Afghan refugees after the 1979 revolution. In the 1980s and early 1990s, the “blue cards” were issued for most Afghans to state their legal stay and permission to work in Iran. They had access to free education, healthcare, and food subsidies, although their employment was limited to low-wage jobs (Abbasi-Shavazi et al., 2008). The increasing cost of providing prolonged unconditional support to refugees and the limited resource to revive the economy in the aftermath of the Iran-Iraq war altered the Iranian government policy toward refugees (Rajaee, 2000). In the early 1990s, through a Tripartite Agreement between Iran, Afghanistan, and UNHCR, the repatriation process of Afghan refugees started. The new policies by the Iranian government made the country a less desirable destination for Afghan refugees. Their access to public services, specifically free education and subsidized food, were restricted, and the new registration cards were issued temporarily (Abbasi‐Shavazi & Sadeghi, 2015).

Afghans were not able to work without a valid permit since 1993. In 2001, legal restrictions and penalties were imposed to prevent the employment of illegal foreigners. Nevertheless, the Afghans’ willingness to work with lower wages induced the employers to take the risk and many refugees continued to reside in the banned regions and work informally (Turton & Marsden, 2002). Moreover, in 2004, the government banned the refugees from settling down and working in 16 out of 31 provinces. Despite the new restricting policies and UN effort to facilitate Afghans’ repatriation, Iran remained one of the main destinations due to its cultural proximity and long shared border with Afghanistan. Afghans repatriation diminished when the Taliban gained power and took Kabul in 1996, and once again when the Taliban resurged and increased attacks against US and Afghan forces in 2003.

Figure 1 displays the number of Afghan refugees in Iran from 1979 onward. As explained above, from 1979 to 2001, Afghanistan experienced a very unstable era. After the US invasion of Afghanistan, although the instability was still present due to the war between the US and Taliban, no specific event boosted the flow of refugees between the borders. Later in 2010, the initial steps toward peace took place. Fortunately for our study, there is no significant change in push factors involved from Afghanistan after 2010, which is the period of our estimations. The relative stability in the origin country allows us to identify better the unequal effect of macroeconomic fluctuations in the destination.

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