BLOG: Unemployment, Refugees, Asylum Seekers, and the 2008 Financial Crisis – An Analysis using Structural VAR and Dynamic Panel Models

Sarah von Bargen, Columbia University

This paper analyzes the relationships between refugee and asylum seeker flows, unemployment rates, and suicide rates using both structural vector autoregression and dynamic panel models. Specifically, structural VAR is initially used for analyzing data from 1980-2018 in the United States, and a random effects dynamic panel model is utilized for analyzing post-2008 financial crisis data of these four variables in the United States, France, and the United Kingdom. While the structural VAR model found a significant negative bi-directional relationship between unemployment and refugee growth rates in the United States from 1980-2007, the random effects dynamic panel model exhibits a strongly significant and positive relationship between unemployment and suicide, and unemployment and refugee flows from 2009-2016. Furthermore, the effects of unemployment on suicide rates, and refugee flows on unemployment rates were found to have a uni-directional relationship. This suggests that the lasting effects of the 2008 financial crisis pose new challenges for developed Western nations seeking to balance low unemployment rates with policies which assist refugees in need of protection from dangerous conflict regions.

Read the full paper here.

Image: Bulent Kilic/Getty.

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