Assistance in finding accommodation helps refugees with labour market integration

For the period during which they are waiting to be recognised as refugees and eligible for asylum in Austria, displaced persons are condemned to a life of inactive waiting. Accommodation is provided in in basic-care quarters funded by the public authorities, and they are not allowed to pursue gainful employment and have only limited access to language courses. It often takes years before protection status is granted. Once it has been granted, they are expected to deal with everything very quickly. “The expectation is that overnight the refugees will now demonstrate great independence in organising their lives in Austria. Within a very short time, they are expected to learn the language and find work and a place to live,” notes Fanny Dellinger, an economist at the University of Innsbruck.

Dellinger has investigated the impact of providing assistance to refugees in finding housing, which is often particularly difficult. Conducted within the context of the FWF-funded project “Mobility, Migration and Regional Impacts”, the study explores how support for finding a place to live is organised for recognised refugees in Austria, and what consequences this has for another major integration achievement – finding a job. The study, publication of which in the journal Housing Studies is imminent, is also part of Dellinger's thesis, which she is writing at the Department of Economic Theory, Economic Policy and Economic History at the University of Innsbruck.

“For refugees, looking for a place to live is fraught with several challenges. There is the language problem. Searching the Internet, writing emails, making phone calls – all of that is difficult if you are unable to communicate well,” says Dellinger. “Also, many flat owners are reluctant to rent to refugees – if only because most of them still have no income of their own. In addition, many refugees suffer from the bad reputation of their countries of origin, and there is strong discrimination against many people from Afghanistan or Syria.”

Many refugees migrate to Vienna

After being recognised, the refugees only have four months to find their own accommodation – usually they are not allowed to stay in their basic care facility longer than that. The support they receive varies greatly from province to province. As Dellinger explains, “In Carinthia and Burgenland there is hardly any support. In Lower Austria the help is limited to families and that only in a few districts. In Salzburg, Upper Austria and Styria the gap is filled by NGOs, for example when it is a matter of brokering between landlords and refugees and assuming responsibility for the risk of defaulting rent payments. Often, however, the opportunities offered cannot prevent them from relocating to Vienna, because there the refugees will not only find larger ethnic communities that attract them, but also a social welfare scheme that favours living in shared flats compared to other provinces.”

In a comparison between provinces, Vorarlberg and Tyrol offer the most support in finding accommodation, since in these two provinces the refugees have the possibility to stay in their basic care accommodation beyond the four-month period. “If they are recognised, the refugees are offered a sub-tenancy agreement for the place where they have already spent the basic care period,” Dellinger explains. “This means they are subject to a different regime, but without having to move to another dwelling.”

Differences between single men and men with families

And what is the impact of the respective support variants on the integration of refugees into the labour market? In order to answer this question, Dellinger analysed data from the registers of the Austrian social insurance system, which was made available by the Public Employment Service. Dellinger not only established a breakdown by province, but also distinguished between two different groups: single men and men with families. Working out the relationship between these two groups, she can exclude the possibility that the effects on the labour market result solely from regional differences in the economic context.

“The study clearly shows that more support in finding housing also brings greater success in finding a job locally and reduces migration to Vienna,” notes Dellinger in summing up her findings. In all Austrian provinces, single men have an advantage in the labour market because they are more flexible and mobile. This advantage is much smaller in provinces that provide little support – and single men in particular have even less access to support than fathers – than is the case in Tyrol and Vorarlberg: “In the provinces that grant little support, single men do much worse on the labour market than one would expect. They then go to Vienna, where the job prospects are significantly worse. A lot of potential is lost here.”

A call for nationwide regulatory adjustments and a strengthening of NGOs

The economist sees clear recommendations emanating from her findings. On the one hand, the more successful model from the westernmost provinces model should be applied throughout Austria. At the same time, there is a need for strengthening the NGO sector, and Dellinger also recommends the establishment of a supra-regional housing agency that brings recognised refugees to regions with a high demand for labour. 

The data on which the study is based comes from the time before the Ukraine war, and different regulations apply to refugees from Ukraine. Currently, they receive temporary protection and have access to the labour market, which gives rise to new dynamics: “Refugees from Ukraine are not part of the asylum system, nor do they receive corresponding social benefits – this could still develop into a major social problem,” Dellinger notes. “At the same time, hopes for new momentum for the labour market are probably exaggerated. A large proportion of the refugees from Ukraine are single women with children who will face major hurdles in the labour market, especially because of a lack of childcare.”

Personal details

Fanny Dellinger’s thesis at the University of Innsbruck focuses on the integration of refugees in Austria. She studied economics at the University of Vienna and held positions at the Economic Research Institute (WIFO) and at the University of Vienna as a junior researcher. In the context of her doctorate, Dellinger is contributing to the project “Mobility, Migration and Regional Impacts”, which receives EUR 203,000 in funding from the Austrian Science Fund FWF. The principal investigator of this project is Michael Pfaffermayr from the Department of Economic Theory, Economic Policy and Economic History at the University of Innsbruck.

Publications

Dellinger F.: Housing Support Policies and Refugees’ Labor Market Integration in Austria, in: Working Papers in Economics and Statistics 2021-32. Research platform “Empirical and Experimental Economics”, University of Innsbruck, 2021 (pdf)

Dellinger F., Huber P.: The impact of welfare benefits on the location choice of refugees testing the Welfare Magnet Hypothesis, in: WIFO Working Papers No. 626, Vienna 2021