Murat Kirdar

 

 

 

Abstract: We show that large-scale refugee inflows can raise rather than depress the wages of formally employed natives, through within-firm reorganization that is specific to economies with substantial informal sectors. Using the arrival of nearly 4 million Syrian refugees in Turkey as a natural experiment, and linking matched employer–employee administrative data to firm balance sheets, we establish three findings. First, formally employed native men shift toward cognitive-intensive tasks and earn higher wages within continuing employment relationships; person–firm fixed effects confirm that these gains reflect genuine increases in workers’ marginal products rather than compositional shifts. Second, firms reorganize internally: capital per unit of sales falls significantly despite substantial output growth—ruling out automation, demand-driven expansion, and outsourcing—while intermediate input shares remain flat. Effects concentrate in historically high-informality sectors and in firms with greater pre-shock manual task intensity. Together with the worker-level patterns, these results identify the operative channel: Syrian refugees, working almost entirely informally, provide low-cost manual labor that substitutes for physical capital and enables firms to reassign formal workers toward higher-value cognitive activities. Third, Olley–Pakes and Melitz–Polanec decompositions of firm-level wages show that aggregate wage growth in exposed regions reflects broad-based within-firm gains rather than reallocation of workers toward higher-paying firms. These findings imply that large refugee inflows can generate substantial native wage gains and within-firm reorganization in middle-income host countries where institutional barriers channel refugees into informality and manual and cognitive tasks are complementary.

 

 

 

 

– Séminaire organisé par le programme 3 / BxSE –

 

 

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