Employment Effects of Dispersal Policies on Refugee Immigrants: Theory

This paper formulates a partial search model in which unemployed <p> individuals simultaneously search for job and location of residence. <p> Most importantly, we show that, ceteris paribus, a decrease in current <p> place utility increases the transition rate into a new location of <p> residence and the transition rate into employment outside the local <p> labour market, but decreases the transition rate into local employment. <p> Thus, a decrease in current place utility decreases the overall <p> job-finding rate if the local reservation wage effect dominates. <p> We argue that dispersal policies on refugee immigrants are characterised <p> by low average values of current place utility. Hence, the <p> model predicts that dispersal policies increase the geographical mobility <p> rates of refugees and, for a sufficiently large local reservation wage <p> effect, decrease their job-finding rates.