Refugees and human capital

Over the past month the world has witnessed Russia’s invasion of Ukraine unfold, and, with it, the largest movement of refugees in Europe since the Second World War. Claudia Rei explores data from the forced migration of the 1940s to understand what types of people make the difficult choice to leave their home during times of war.

There is a vast body of scholarly work on the economics of international migration, but considerably less on war refugees. Most of the latter focuses on selected segments of the refugee population such as inventors, or university professors (Moser et al., 2014, and Becker et al., 2021)

In a joint study (2018), Matthias Blum and I contributed to this under-researched area with data from all war refugees fleeing the Second World War between 1940 and 1942. We studied refugees, mostly of Jewish origin, departing Lisbon and arriving in New York. In this time window, Lisbon was the only available port of exit out of Europe. After 1942, all passenger traffic shut down.

This last wave of Holocaust refugees came from all corners of Europe. They offer valuable comparisons with the larger body of Jewish migrants who fled Europe between the Nazi seizure of power in January 1933 and the outbreak of war in September 1939. Their data uncover interesting evidence about the characteristics of war refugees over the long term.

We conservatively define as refugees all Jewish passengers and their accompanying family members, regardless of ethnicity. We compare information on their individual height (as an indicator of general health), occupation, proxies for income, and language knowledge to measure the extent of their human capital (their potential economic value as workers).

We find that, regardless of refugee status, all migrants were positively selected – in other words their human capital was above average when compared with the populations in their home countries. This pattern was stronger for females than males.

Refugees and non-refugees in our sample were no different in terms of skills and income level. But we do see a difference with respect to the timing of the migration decision: earlier arrivals were more positively selected than later migrants, but even the latest of these Holocaust refugees were positively selected relative to their home-country populations. These findings suggest that earlier Jewish refugees (those escaping Europe between 1933 and 1939) might have carried even higher levels of human capital.

The lesson from history here is clear: refugees from long-lasting conflicts can still be healthier, earn more and be more educated than the average person from their place of origin, even long after living conditions start deteriorating in conflict zones. People fleeing Afghanistan or Syria today, therefore, are not just lucky to escape. They are probably healthier and coming from higher social backgrounds than the average person in their home country.

These findings will be important as National governments welcome Ukrainian refugees through their borders. History shows that refugees can contribute to the economy of their adoptive homes by bringing in additional skills and human capital.

Claudia Rei, University of Warwick and CAGE

Read the research

Blum, M and C. Rei (2018). Escaping Europe: Health and Human Capital of Holocaust Refugees. European Review of Economic History, 22,1:1–27.

References

Becker, S.O, V. Lindenthal, S. Mukand, F. Waldinger (2021). Scholars at Risk: Academic Networks and High-Skilled Emigration from Nazi Germany. CAGE Working paper (no. 542).

Moser, P., A. Voena and F. Waldinger (2014). German Jewish Émigrés and US Invention. American Economic Review104, 10: 3222-3255.