Thrive or Survive? Explaining Variation in Economic Outcomes for Refugees

In the context of protracted refugee situations, there has been a revival in concern among policymakers to transcend the so-called humanitarian-development divide and create greater opportunities for self-reliance. Yet, these discussions too often neglect an analytical focus on refugees' own economic lives, and their own interactions with markets. Despite a growing literature on the economic lives of refugees, much of that work has lacked theory or data. The work that has been quantitative has generally focused on the economic impact of refugees on host countries rather than explaining variation in economic outcomes for refugees. In order to explain variation in economic outcomes for refugees, this paper asks three questions about the economic lives of refugees: 1) what makes the economic lives of refugees distinctive from other populations; 2) what explains variation in refugees' income levels; and 3) what role does entrepreneurship play in shaping refugees' economic outcomes? In order to answer these questions, the paper draws upon extensive qualitative and quantitative research conducted in Uganda by the Humanitarian Innovation Project at Oxford University. The quantitative data set is based on a survey of 2,213 refugees in three types of contexts: urban (Kampala), protracted camps (Nakivale and Kyangwali settlements), and emergency camps (Rwamwanja). It supplements this with qualitative research from other parts of Africa and the Middle East. The economic lives of refugees are argued to be distinctive not because refugees are any different qua human beings but because they often occupy a distinctive institutional space. Following new institutional economics, the paper argues that “refugee economies” represent a distinctive analytical space insofar as refugees face different formal and informal institutional barriers and distortions in their economic lives compared to nationals or other migrants. Even within the same country, refugees exhibit significant variation in their economic outcomes, most notably in their income levels. A number of variables are significant in explaining this variation. These include: regulatory context, education, occupation, social networks, gender, and the number of years spent in exile. Entrepreneurship is an important explanation for “outliers” within the refugee community, explaining why some refugees have significantly higher incomes. However, refugees also often play a wider role within the community, creating opportunities for others. Furthermore, a significant part of refugee entrepreneurship is social rather than simply for-profit. In order to enhance opportunities for greater refugee self-reliance, policymakers need to develop a better understanding of the transnational, national, and local markets within which refugees participate. Instead of engaging in top-down interventions, enabling environments should be created that enable autonomous, community-led initiatives to flourish.