Are refugees better together? a study on the influence of ethnic clusters and dispersal policy on refugee integration

Abstract

Abstract This paper investigated whether ethnic clusters play a role in refugee integration across different races. There are two hypotheses for this study, first, refugees in districts with higher ethnic clusters have better refugee integration, and second, therefore, the dispersal policy is expected to harm refugee integration. I analyzed individual-level data from the Socio-Economic Panel (SOEP), a wide-ranging longitudinal study of private households in Germany, and district-level demographic and economic data from the German statistics department. In this paper, both perspectives of random or non-random refugee allocation are considered while investing the influence of ethnic clusters on refugee integration. A quasi-experimental approach, difference in differences (DID) analysis, is used as the benchmark model to study the causal effect of the refugee influx. In addition, as a robustness check, propensity score matching in the difference-in-differences setup is used to overcome the non-random factor of refugee allocation issued by certain scholars. The results showed that Arabs are better at economically and socially integrating into areas with higher refugee concentration, whereas Asians are worse off. However, ethnic clusters showed a negative relationship but had no causal impact on integration for African and European refugees.