Abstract:

This study examines the labor market effects of the influx of the Syrian refugees in Turkey. Engle-Granger and Johansen co-integration tests, followed by the autoregressive distributive lag (ARDL) bounds tests reveal that the Turkish unemployment and Syrian refugee series are co-integrated; pointing out to a long-run relationship. Short-run and long-run dynamics have been analyzed from the fitted ARDL model and the error-correction parameter is used to examine the speed of convergence. Dynamic OLS (DOLS), fully modified least squares (FM-OLS) and canonical co-integrating regression (CCR) estimations are used to make inference on the long-run parameters. Empirical results show that there is a significant and negative relation between the level of unemployment in Turkey and the number of Syrian refugees in the long-run, indicating that the influx of Syrian refugees have had a reducing effect on unemployment numbers in Turkey. Our results suggest that the Syrian refugees have acted as a complementary labor force to the existing Turkish labor force.

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