My neighbourhood school recently hung up a 1000 Schools Challenge banner. A group of parent volunteers are calling on other schools across Canada to join them in fundraising to sponsor Syrian families. As a signatory to the UN Refugee Convention, Canada is committed to protecting the persecuted and the stateless. But is this school (and potentially 999 others) about to commit economic folly through the hands-on lesson in citizenship?

Economic Impact

“We know in aggregate that the effect of migration is positive,” says professor Christina Clark-Kazak, director of York University’s Centre for Refugee Studies and author of Recounting Migration.

This is borne out by the research. In 2014, Giovanni Peri of the University of California at Davis reported a labour model study of OECD (Organization for Economic Co-operation and Development) nations in the 1990s. “In all cases we find that immigration had a positive effect on the wage of less-educated natives. It also increased or left the average native wages unchanged and had a positive or no effect on native employment.” Research published by Ian Goldin of the University of Oxford in 2015 concurred that migrants boost the prosperity of host countries.

“It’s very difficult to isolate the economic impact of one specific group such as refugees,” continues Clark-Kazak. Foreign arrivals can enter Canada across three broad gateways: by the independent or economic class gateway, by the family reunification gateway, or by the refugee designation. In Canada, refugees comprise roughly 10 percent of total immigration.

When refugees are brought to Canada, their expenses for the first year are deemed to be settlement costs, paid through foreign aid. “This means that some foreign aid projects are actually spending their aid dollars in Canada,” says Clark-Kazak. The 2016 update on Official Development Assistance (ODA), issued by the Canadian Council for International Co-operation, stated “government support toward the integration of 25,000 Syrian refugees … could increase ODA by $876.7 million in 2015–2016.” This works out to about $35,000 per refugee.

“Even in Canada, when I go on radio phone-in shows, 20 to 30 percent of callers are negative about accepting refugees,” says Clark-Kazak. “They tend to see assistance as a zero-sum game.”

“People need to think of the economy as a whole,” she continues. “For example, my campus specializes in languages. I can tell you that, for every graduate of the Arabic languages program, there is now a job waiting for them—just one example of the spin-off effect.”

Resettlement acts as a stimulus to the local economy. There will be a stimulus to the medical sector as health issues that occur due to protracted displacement in refugee camps are taken care of. There will also be a stimulus to the education sector, with increased admissions to Toronto schools. “This is rightly perceived as an investment in future income earners,” says Clark-Kazak.

Employment

“The economic experience of refugees mainly depends on the labour market outcome,” says Clark-Kazak. Like most immigrants, a refugee faces challenges related to moving, language ability, lack of social networks, and limited country-specific work experience. So what, specifically, will help them best address those challenges?

Refugees are tough to study “because we don’t have a lot of information longitudinally,” she says. Data are taken at point of entry but are not updated as refugees attain more education, invest savings, and so on. The most comprehensive source is the Longitudinal Immigration Database, which links the intake records of post-1979 immigrants with annual taxation records. As well, the intake numbers from countries of origin fluctuate wildly, so the refugee cohort changes from year to year.

Both the origin country and the country of refuge make a difference. A 2014 study by Bevelander and Pendakur compared employment of refugee and family reunion migrants from four countries (Iran, Iraq, Afghanistan, and the former Yugoslavia) in the host countries of Canada and Sweden. They found the earnings were higher in Canada than in Sweden—despite Canada’s minimum wage being about half the amount of Sweden’s.

Private Versus Public

A 2004 study by DeVoretz, Pivnenko, and Beiser assessed the Canadian refugee experience from 1981 to 2001, a period that included the influx of 40,000 “boat people” from Vietnam, Laos, and Cambodia. After seven years, employed Canadian refugees earned an amount equal to that earned by family reunification immigrants. However, the incidence of newcomers requiring social assistance was found to be “substantial.”

DeVoretz and others observed one factor that correlated with better economic outcomes for refugees: the nature of the sponsor. They speculated that “private sponsors [may] have more time or motivation than the regular social system to help refugees find first jobs or help marginal people with their qualifications.”

But does the type of sponsorship really make a difference? The effect is only temporary, according to a 2007 study by Yu, Ouellette, and Warmington. They looked at Canadian economic integration through measuring the employment rate and employment earnings of refugees at one and five years after achieving permanent resident status. They distinguished between privately sponsored refugees, government-assisted refugees, and landed-in-Canada refugees. “Among the refugee categories … at five years since landing, there is very little difference among the three categories.”

The effect of sponsorship raises interesting questions, says Clark-Kazak. “Privately sponsored refugees tend to enter the workforce more quickly. Is it because they enter an in-built network that leads to landing accommodation and jobs sooner? Or do these refugees feel more pressure, face-to-face with their sponsors, to take any job they come by?”

An extra year spent developing language and acquiring skills might be wiser. “There may be long-term costs to refugees becoming economic contributors too quickly,” says Clark-Kazak. “It could lock them into low-quality employment” with fewer language skills and less training.

A Question of Family

There are economic issues in resettling intergenerational families, says Clark-Kazak. “There’s a bias against the very young and the very old, since both are seen as a drain on the system. Yet the older family members are often caregivers for the youngsters, allowing the parents to go out and earn. Whereas young children pick up the language so quickly, they become interpreters for their families. It’s erroneous to assume that only adults are economic contributors.”

Clark-Kazak disagrees with the “privileging of families,” where female-headed households were moved into the refugee claimant queue sooner than unattached males. “This is problematic from a humanitarian view because we’re leaving single males behind, and they lose their networks and their human connections.”

Canada admits refugees on the basis of compassion and not on the basis of economic criteria. It is, however, important to understand the economic impact of refugees in order to improve outcomes for refugees, their extended families, and the communities they now must enter. The single most important determinant is successful integration into the workforce.

As for my local school, it met its fundraising goal target of sponsoring a family of five within weeks of announcing the goal. The family arrived this past February and is settling in nicely, with the adults enrolled in English classes, young adults enrolled at an adult learning centre, and a little boy in Grade 2.

More schools are becoming involved in active work and citizenship learning for students—showing that it’s not just refugees who rise to a challenge.

By the Numbers

The situation is in flux, but we’ve pulled together some data to give you an idea of the response to the Syrian refugee crisis in Canada and around the world.

¹ Ranking by Wikipedia as of April 14, 2016.

Sources: United Nations High Commissioner for Refugees, United Nations Office for the Coordination of Humanitarian Affairs, Citizenship and Immigration Canada, Wikipedia and sources therein. “Financial aid” represents donations to international aid organizations for refugees (in U.S. dollars, not including resettlement or government spending on domestic hosting).