There are now seven refugee camps worldwide with populations in excess of 80,000 people. These citylike settlements help to frame public ideas of refugees but the quantitative impact of these camps on local populations remains largely unknown.
Images of refugees huddled under tents dominate news feeds but the discourse surrounding their presence is charged and confusing. Do they threaten jobs and safety in communities that host them or provide a welcome influx of new ideas, ready workers and consumers for local markets?
To help answer some of these questions we examined the impact of long-run refugee inflows on the host population in Kakuma, northwestern Kenya. Previous studies of refugee-host interactions, which have largely been qualitative, have established continuous and important relationships without being able to directly estimate net benefits to locals of refugee and aid presence. One exception to this is recent work showing positive net impacts of cash aid to refugees on the local economy in a calibrated simulation of Congolese refugee camps in Rwanda. The long-run impacts of refugee presence, however, remain unclear.
Kenya is a microcosm of the recent trends in displacement. Ongoing instability in Somalia and new rounds of displacement from South Sudan following political and ethnic unrest in 2013 have resulted in a growing refugee population in an area that has hosted refugees since 1991. Today, the refugees in Kakuma camp number 182,000 and live next to a community of semi-nomadic pastoralists known as the Turkana people.
One of the reasons that the impacts of refugee inflows are largely unknown is because of data scarcity in regions where refugees are typically hosted. To overcome this, we combined a variety of different types of data to assess the impact of Kakuma camp on the Turkana people. First, we examined whether or not there was more economic activity near the camp as the number of refugees living there grew. To do this, we exploited data captured by satellites that measures the presence of lights at night.
By examining changes in the brightness of nighttime lights from 1993 – just after Kakuma camp was started – to 2013, we establish that small increases in refugee presence have positive but very localized effects on luminosity – a 10 percent increase in the refugee population is associated with a 3.6 percent increase in the nighttime lights index within 10km (6.2mi) of the camp.
Using a census of household data collected in 2012, we estimate the correlation between lights and consumption. Back of the envelope calculations suggest that a 10 percent increase in the refugee population raises consumption by approximately 5.5 percent within the same proximity of the camp.
Through what channels does this impact occur?
Because the main feature of refugee camps is that they are full of people, we first tried to understand whether or not the huge influx of refugees generated labor market competition or presented new populations to sell locally produced goods to.
To tease out these different effects, we combined data from a recent household survey with price data, refugee population and food aid deliveries to examine changes in labor, livestock and agricultural markets. The data showed that proximity to the refugee camp is associated with more low skill jobs and wage labor, particularly for households with secondary education.
In a traditionally pastoralist region like Turkana, these findings are meaningful. If there is labor market competition from refugees, its overall impacts are swamped by the job opportunities provided by the camp and the increased demand generated by refugees.
With regard to agricultural markets, in a context where food aid is externally provided, as it is in Kakuma, food prices may decrease for products in the aid package as a result of increases in supply. However, they may also increase across a variety of products due to the increase in the number of people purchasing goods, and from the sale of aid packages for income. Information from our household surveys showed that agriculture in the Turkana region occurs almost exclusively close to the refugee camp, suggesting that the camp presence incentivizes increases in, rather than depression of, agricultural production.
We also find that livestock prices are positively correlated with high refugee and aid presence, and although absolute numbers of livestock are not higher closer to the camp, larger amounts of livestock sold in the immediate vicinity of the camp suggests that herding households benefit from the presence of the refugee market.
Overall, the positive effect of refugees on the local economy seemed to come through the availability of employment opportunities and price changes in agricultural and livestock markets that encourage new production.
There are many ways that refugee populations may interact with locals that are not captured in our data. Concerns exist about increases in health problems or crime, and we did not have rigorous data on these issues, although qualitative interviews suggested that the refugees were much less of a source of disturbance than local, nonrefugee cattle rustlers. Our analysis also did not lend insight into the fact that impacts of the refugees on locals might vary – for example, those most able to take advantage of the new markets provided by refugee populations might be made better off, while those without access might be worse off due to increases in prices.
Nonetheless, it is important to recognize that refugee camps can provide important economic opportunities to local populations, and that policies could be designed to amplify these positive effects. For example, interventions supporting locals’ ability to exploit the increased demand from the refugees could result in even more beneficial outcomes. These interventions might include equipping locals with the skills necessary to take advantage of new wage work, and providing technical support to improve agricultural and livestock production could help spread the benefits more widely.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Refugees Deeply.