Mass Immigration and the Effect on Employment and Prices: Evidence from the Ukrainian Refugee Crisis

Abstract

This paper studies the effects of the large influx of Ukrainian refugees into Europe on employment and the price level of the host country. We investigate the refugee inflow-induced demand- and supply-side forces in an effort to determine their magnitude of impact on employment and inflation. Furthermore, we determine a positive impact of Ukrainian refugees on a country’s employment number but a negative effect on CPI. We, therefore, find evidence that negative inflationary pressures resulting from an increase in the supply of workers offset the positive inflationary pressures resulting from increased demand owing to a larger population that would presumably consume more goods.