Matching with the Right Attitude: The Effect of Matching Firms with Refugee Workers

Abstract

We study the effect of exposure to a refugee worker on firms’ hiring of refugees. We conduct a randomized controlled trial randomly matching local firms with refugee workers. The experiment subsidizes local firms to hire a refugee worker for one week. We find that these internships effectively double local firms’ hiring of refugee workers two years after the experiment. Moreover, they enhance firms’ support of refugees’ integration and improve firm owners’ beliefs about refugees’ skills. This underscores the presence of misperceptions among local firms regarding workers from demographic groups they typically do not consider for employment. The study also identifies significant heterogeneity in the initial attitudes of employers and workers. Notably, the quality of the match between firms and refugee workers has a complementary effect on firms’ demand for refugees and enhances the impact of the internships. Overall, these findings hold significant policy implications for countries seeking to create employment opportunities for forcibly displaced people.

JEL Classification: L25, E2, J61, C93