LISER Economists Discuss Ukrainian Refugees Resettlement in Luxembourg, Europe

Chronicle.lu recently got the opportunity to speak with Dr Lucas Guichard, economist, affiliated with the Living Conditions Department and contributes to the EUFIRST project on Globalisation, Inequality and Populism at Luxembourg Institute of Socio-Economic Research (LISER), and Dr Joël Machado, economist, affiliated with the Labour Market Department at LISER and a research fellow at IZA, DEM (University of Luxembourg) and IRES (UCLouvain), about Ukrainian refugees resettlement in Luxembourg and Europe.

Dr Guichard and Dr Machado from LISER, together with Prof Jean-François Maystadt, FNRS Research Associate at UCLouvain (Belgium), recently published a Policy Brief titled "The Ukrainian Exodus Calls for Better Coordination in the European Asylum Policy" underscoring the need for “Coordination of the resettlement of refugees from Ukraine”.

Chronicle.lu: In the publication, it was stated that 'European citizens have shown huge solidarity with Ukrainian asylum seekers, yet maintaining this solidarity in the long run is likely to be a major challenge'. Can you kindly elaborate on the major challenges in long run.

Dr Guichard, Dr Machado: The duration of the war remains at this stage highly uncertain. With every additional day of conflict and violence, more Ukrainian residents are likely to seek protection in Europe and an important share of them will first stay in one of the neighbouring countries. If the war persists, it is unlikely that these neighbouring countries will be able to host all the refugees that have so far remained there and hence more Ukrainians will move to non-neighbouring countries. In the medium and long run, refugees will have to integrate the labour markets and societies of their host countries which often implies a need to acquire additional skills and learning the language of the destination country. Host countries will have to put in place the policies and tools to support refugees’ integration.

Chronicle.lu: In the publication, it was estimated that population-based distribution of Ukrainian war refugees in the EU27 would result between 5,600 and 14,000 applications in Luxembourg, while Minister Jean Asselborn stated on 11 April 2022 that Luxembourg has already welcomed more than 4,600 Ukrainian refugees. With no immediate diplomatic solution to the ongoing war in sight, what are your expectations in terms of total war refugees in Luxembourg in near term?

Dr Guichard, Dr Machado: It is very difficult to provide an estimate of the Ukrainian refugees that Luxembourg (or any other country for that matter) should expect given the many highly uncertain elements that would affect such an estimation. Instead, we provide ranges of values for the distribution of Ukrainian refugees across EU countries based on different characteristics in order to give a sense of the magnitudes that such distributions would imply. This allows a comparison between distributions based on criteria that likely affect the number of asylum seekers that each country could expect such as the Ukrainian networks or the destination country’s population or GDP. The number of refugees choosing a specific country is in reality a mix of these factors and others, including the individual’s networks and preferences, and the destination country’s characteristics, such as distance, language spoken but also perceived employment and housing opportunities. Distance, for instance, likely plays an important role in the short term, with refugees staying close to their origin country. But if the war persists, more Ukrainian refugees are likely to choose destinations that are further away from Ukraine to settle.  

Chronicle.lu: The publication suggests the possibility of 'a tradable quota mechanism' for refugees for better coordination and integration across the EU27. What are the main pros and cons for such a quota mechanism?

Dr Guichard, Dr Machado: Different tradable quota mechanisms have been discussed in the economics literature. Their common underlying objective is in general to maximise coordination between destination countries, assuming that a quota system has been agreed upon – e.g. each country is required to host a certain number of asylum seekers. Countries vary along many dimensions, such as their current economic situation, their hosting capacities and/or their population’s willingness to accept refugees. A tradable quota system would allow countries with very binding constraints to host less asylum seekers by financially compensating countries with less binding constraints willing to host a number of asylum seekers beyond their quota. In that sense, a tradable quota mechanism is likely to enhance the efficiency of a quota system. In addition, the most recent systems discussed in the literature also allow accounting for asylum seekers’ preferences, mitigating fears that a destination could be completely imposed on them. The main drawback of these systems is the lack of political consensus that has been prevalent in the EU until now. For instance, the relocation scheme for 160,000 refugees from Greece and Italy towards other EU countries decided by the European Commission in September 2015 failed because only a limited number of countries ended up accepting refugees. The current crisis might however represent an opportunity to rethink how to build and enforce systems allowing to share the responsibility for asylum seeker inflows among all EU countries. Such a system would clearly contrast with the current Dublin system which largely puts the responsibility on countries at the EU’s external borders.

Chronicle.lu: In addition to adequate accommodation structures, guaranteed access to basic services and medical care, what are the main challenges for the Ukrainian refugees in Luxembourg?

Dr Guichard, Dr Machado: Once the basic needs are attended to, the main challenge for refugees is to progressively settle in the host country, which means integrating the social (e.g. creating networks) and economic (e.g. employment/education) life of the host country. This may take time for two important reasons. First, refugees coming from war-zones likely witnessed trauma and many still have family members in Ukraine. Hence, they might not be physically and/or mentally ready to invest in building up a life at destination. This might be particularly true when the war is still at relatively early stages, as it is the case for Ukraine now. Second, in order to integrate the host society, refugees need to learn the customs and language(s) of the host country. The latter aspect is particularly challenging in a multi-lingual context such as Luxembourg’s. The successful integration of refugees is thus likely dependent on resources available to support them, including psychological support, language courses and professional training.

Chronicle.lu: Affordable housing is already a challenge in Luxembourg. With the arrival of more than 4,600 Ukrainian refugees, will the domestic housing will come under further pressure?

Dr Guichard, Dr Machado: Affordable housing is indeed an important challenge in Luxembourg. In the short term, however, the main issue for Luxembourg is ensuring enough hosting capacities to accommodate asylum seekers upon their arrival. It is well known that the infrastructure available in the country was already being used at almost full capacity before the war started in Ukraine. This implies that many short-term and temporary solutions had to been put in place and might continue to be necessary to host Ukrainian refugees. The high occupancy rates in existing hosting facilities is partly due to the difficulty of recognised refugees to find affordable housing on the housing market. Hence, affordable housing is also a crucial issue for refugees, which are among the most vulnerable population groups in Luxembourg’s society.

Chronicle.lu: Is the Ministry of Foreign Affairs, which is responsible for the immigrants, has been in contact or being advised on this topic by LISER?

Dr Guichard, Dr Machado: LISER organised a public round table on the war in Ukraine on 24 March 2022 to which Minister Jean Asselborn and different representatives of the civil society participated (details here: https://www.liser.lu/?type=news&id=2235). Given the importance of this war for Luxembourg, Europe and the world, LISER is coordinating with the other research institutes (LIST, LIH, UNI.LU…) and will continue to provide scientific evidence and publish policy-briefs on questions related to the war in order to inform and support public authorities and actors in the field.