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Forced Migration and Development

Periodic Reporting for period 3 - FORCEDMIGDEV (Forced Migration and Development)

Período documentado: 2022-04-01 hasta 2023-09-30

By 2020, the number of forcibly displaced individuals by conflict, natural disasters and climate shocks worldwide had reached the staggering number of 82.4 million. This crisis is vastly concentrated in developing countries, which host 85% of the world’s displaced population. Nevertheless, we still know relatively little about the economic consequences of forced migration in these countries.

FORCEDMIGDEV seeks to fill this gap. It is organized in complementary parts that analyse the two dimensions of forced migration – internal displacement and international migration (refugees) – which constitute very different economic phenomena. The first part seeks to develop an economic model to analyse the long-run impacts of refugee inflows in developing countries. In particular, this framework will be used to investigate the effects of the Syrian refugees in Turkey, the largest host country in the world. By doing so, this research project will answer questions that are relevant for developing but also developed host countries. What are the distributional effects of refugee shocks? What are the welfare effects across regions within the hosting country? What are the effects of providing refugees with a legal status?

The second part of FORCEDMIGDEV combines different economic modelling and econometric techniques to investigate the effects of severe climate shocks on internal displacement and its impacts on economic development. It takes advantage of unique data availability in Brazil to estimate the effects of internal displacement on a broad array of outcomes at destination/hosting communities, such as employment, wages health and crime. In this second part, FORCEDMIGDEV will also heavily rely on economic models to assess the long-run, micro and macro effects of internal displacement in Brazil. This part lies on the underexplored intersection of climate change and development economics, which has a large potential to open new avenues for future research.
The implementation of this research project in its first nine months has been quite challenging due to the Covid pandemic. Nevertheless, before the first measures of social distancing started, the PI was able to present the preliminary results of Objective 1 (Part A) of FORCEDMIGDEV. After March, all research activities and interactions moved online and all work was performed remotely, which of course hinders the speed of implementation and the pace of the research project. Notwithstanding these challenges, two part-time research assistants were hired to work remotely on the data preparation for Objective 3 of Part B, which seeks to estimate the effects of internal migration caused by weather shocks using the rich Brazilian microdata. This has been very intensive data work, involving detailed, geo-referenced weather data (e.g. rainfall, temperature and precipitation), crop prices and land use, demographic census data on migration flows and firm-level, matched employer-employee data from Brazil. FORCEDMIGDEV has also made very good progress on this front, especially considering the challenging circumstances.

In October 2020, the PI started working in a new institution, and the change in host institutions took a long time to be conclude, which added to the delay already caused by Covid. After the transfer was concluded, it was possible to expand the research team and from then on FORCEDMIGDEV made substantial progress on Objective 3 of Part B. In particular, one full paper has been produced entitled “Rural-Urban Migration, Informality and Firm Dynamics”, which analyses the effect of migration on local labor markets and firm dynamics at destination. This paper has been accepted in all the most important European summer conferences and has been already presented it in academic seminars in some of the top departments in Europe. In parallel, Objective 2 (Part A) has been further developed into two different papers. The first and main paper develops a spatial equilibrium model with informality, which we estimate and use to analyse the aggregate effects of the Syrian refugees in Turkey. This is now nearly concluded. The second paper is a spin-off of the first and uses the estimated model to analyse the distributional consequences of the arrival of the Syrian refugees among Turkish natives. This paper has now been accepted for publication at the Oxford Review of Economic Policy.

During the second reporting period, we have also started a study the role of informal housing in the internal organization of urban centres. The idea of this project is to develop a structural spatial model of internal city structure with formal and informal housing, as well as formal and informal employment. I believe this project is crucial to further understand and rationalize the empirical patterns that will be investigated in Objective 3. Finally, and very importantly, we have started working with different sources of individual-level, administrative data from Brazil. These data sources provide extremely rich and detailed individual-level information for almost the entire population in Brazil, which can be linked using unique individual identifiers.These data sources constitute a unique resource to push this research agenda even beyond the goals initially set in the proposal. Since September 2021, we have dedicated a lot of time to clean, harmonize and construct this individual level panel for the near universe of individuals in Brazil, which I hope will unlock new exciting research avenues within this research agenda.
The proposed research agenda has two distinguishing features that are quite innovative relatively to existing state-of-the-art research: (i) the combination of reduced-form and structural methods; and (ii) the analysis of both micro and macro effects in a unified framework that emphasises the main characteristics of developing economies. These two features are crucial for a better understanding of the long-run consequences of refugee and internal displacement shocks in developing countries. In particular, by emphasizing the distributional effects of these shocks, this research agenda can open new avenues for future research about the winners and losers of immigration shocks.

These potential gains come with substantial challenges and risks, both in the theoretical and empirical fronts. First, the data requirements are considerable, as one must use detailed geo-referenced household, worker and firm-level data, as well as information on the magnitudes of immigration flows across regions. These are quite rare in the context of developing or even developed countries. Second, the proposed structural frameworks impose non-trivial analytical and computational challenges. Nevertheless, there has been considerable progress already in this first reporting period on both fronts, so FORCEDMIGDEV is likely to be successful in overcoming these challenges.
Regional distribution of Syrian refugees in Turkey
Evolution of displaced population in the world