Reduction in unemployment support to refugees has substantial negative returns

The Rockwool Foundation Research Unit published a new study examining the long-term effects of reduced unemployment support on children in affected refugee families.

In 2002 Denmark reduced the amount of unemployment benefit available to people with refugee status to approximately half the size of the amount available to native citizens. The purpose in doing so was to urge people with refugee status to become more 'self-supporting'. Since then, several studies have found that the reduction has a positive effect on the ability of refugee men to support themselves in the short term, with a slightly higher proportion securing employment more quickly after arrival, with no corresponding effect for women. On the other hand, the reduction also led to poverty, isolation and heightened crime rates for the families. The long-term effects for children and for the national economy, concludes this new study, are clearly negative

To be eligible for full benefits in Denmark, a person must have been legally resident in the country for 9 out of the 10 years preceding their application, and be able to prove that they have held full-time employment for at least 18 months.

The study finds that the effect of reducing unemployment benefits on the national economy is overall negative: over the 15 - 16 year period examined, the average family income was reduced by more than 13 400 EUR. This was mainly due to a larger number of young people in these families not continuing with education after finishing primary school. It was also found that the reduction in benefits for these families over time significantly exacerbated the existing attainment gap between children with a refugee background and children native to Denmark.

Read the summary in Danish.