The refugee mobility puzzle: Why do refugees move to cities with high unemployment rate?

Social science research demonstrates that dispersal policies and restrictions on the freedom of residence have inhibited refugees’ socio-economic integration, presumably because such policies prevent refugees from moving to places where they can employ their skills most fruitfully. However, studies of refugees’ actual residential choices provide little evidence that good economic prospects attract refugees, and some even suggest that refugees often move to deprived cities with frail labor markets. The combination of negative effects of residence restrictions and emerging evidence of disadvantaging secondary migration forms what we call the ‘refugee mobility puzzle’. In this study, we aim at unpacking this puzzle by analyzing the inner-German migration patterns of recent refugees. Specifically, we ask: What attracts refugees to deprived areas, and can their seemingly unfortunate residential choices be understood as moves to opportunity and increased prospects of labor market integration after all? Empirically, we draw on the IAB-BAMF-SOEP Survey of Refugees and track the location of more than 2,000 refugee respondents who were exogenously allocated a place of residence and subsequently became free to move. Based on linear-probability discrete choice models across all German counties and postcodes, we confirm that refugees tend to move to areas with high unemployment. We show that major attractors like housing availability, co-ethnic networks, and service-oriented labor markets are clustered in areas with high unemployment. Taken together, our results complicate recent critiques of dispersal policies and restrictions. On the one hand, our findings show that seemingly disadvantaging relocations into high unemployment areas can conceal potentially improved economic perspectives in relevant labor markets. On the other hand, refugees’ search for affordable housing may turn into an unintended lock-in factor in the mid- and long-run.

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