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Capitalizing on Crisis: Firm Owners and Informal Refugee Labor in Jordan
Abstract
The Syrian case is an important example of a global phenomenon: most refugee movements take place between neighboring states in the Global South. Despite this fact, most academic work on refugee integration focuses on Western host states, leaving a gap in our knowledge of how most host states absorb refugee labor into the labor market. Jordan and Syria’s other neighbors have received the largest share of refugees during seven years of civil war. With 89 refugees per 1,000 inhabitants, Jordan has the second-highest per capita share of refugees in the world. This paper examines the integration of Syrian refugees in the formal and informal labor markets in Jordan. Using new data from the 2015 and 2018 LENS surveys of Jordanian firms, I show Jordanian firms have responded to the crisis by hiring more workers informally. The expansion of a refugee-based informal workforce in formal businesses has huge ramifications for government revenue, particularly in light of the new tax law that came into effect in January 2019. The Jordanian economy was characterized by slow growth and high unemployment even before the Syrian conflict, and recent protests over IMF-designed tax reforms signal the country's economic fatigue. The government of Jordan (GOJ) and international donors have introduced several policy initiatives to address Syrians refugees’ long-term residence in Jordan. The cornerstone of these is the integration of refugees into the Jordanian labor force. The February 2016 Jordan Compact marked a turning point in the international and domestic policy response to Syrian refugees in Jordan. The compact was the first collective document that addressed host community concerns and donor priorities to employ Syrians. As part of the negotiations, the GOJ committed to issuing 200,000 free work permits to Syrians. Given the importance of supporting host communities during refugee crises, this analysis sheds light on how mass forced migration become co-opted into the labor politics of host countries.
Discipline
Political Science
Geographic Area
Jordan
Sub Area
Political Economy