A Triple Win INTERNATIONAL DE VELOPMENT IN FOCUS Fiscal and Welfare Benefits of Economic Participation by Syrian Refugees in Jordan Johannes Hoogeveen and Chinedu Obi, Editors I N T E R N AT I O N A L D E V E L O P M E N T I N F O C U S A Triple Win Fiscal and Welfare Benefits of Economic Participation by Syrian Refugees in Jordan JOHANNES HOOGEVEEN AND CHINEDU OBI, EDITORS © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 27 26 25 24 Books in this series are published to communicate the results of World Bank research, analysis, and operational experience with the least possible delay. The extent of language editing varies from book to book. This work is a product of the staff of The World Bank with external contributions. 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Contents Foreword  ix Acknowledgments  xi About the Authors   xiii Executive Summary    xv Abbreviations  xxv CHAPTER 1 Time to Renew the Partnership   1 Alexander Tyler Main messages  1 Renewing the partnership   1 Notes  6 References  6 CHAPTER 2 Syrian Refugees in Jordan   9 Johannes Hoogeveen, Maria Lagourou, and Chinedu Obi Main messages  9 Introduction  9 Arrival and registration   10 Profile of Syrian refugees   16 Changes over time   30 Conclusion  35 Notes  35 References  36 CHAPTER 3 Measuring Poverty among Syrian Refugees   39 Chinedu Obi and Johannes Hoogeveen Main messages  39 Introduction  39 Measuring poverty among refugees in Jordan: a brief history   41 Estimating monetary poverty among refugees   42 Poverty profile  51 Beyond monetary poverty    58 Discussion  62 Conclusion  64 Annex 3A. Additional table   65 Notes  66 References  68  iii iv | A Triple Win CHAPTER 4 Humanitarian Assistance to Syrian Refugees   71 Chinedu Obi and Johannes Hoogeveen Main messages  71 Introduction   71 Humanitarian assistance for refugees in Jordan   72 Impact of assistance on poverty    82 Improving targeting    91 Conclusion  95 Notes  96 References  97 CHAPTER 5 Labor Market Outcomes   99 Céline Ferré and Silvia Redaelli Main messages  99 Introduction  99 Labor market regulations   101 Syria’s labor market performance   103 Explaining the poor performance of Syrians in the labor market   111 Conclusion  114 Annex 5A. Additional tables    115 Notes   118 References  118 CHAPTER 6 Budgetary Benefits of Refugee Economic Participation  119 Chinedu Obi Johannes Hoogeveen, Erwin Knippenberg, and ­ Main messages  119 Introduction   119 Cost of subsistence needs assistance under various economic participation scenarios  121 Estimating savings from refugee participation in public-services provision  126 Humanitarian cost savings and spillover costs   130 Conclusion: A triple win   133 Annex 6A. Additional table   134 Notes  135 References  136 CHAPTER 7 Takeaways on Refugee Economic Participation and Steps toward a Triple Win   139 Johannes Hoogeveen Main messages  139 Recap of key results    139 A triple win   141 How to get there   143 Notes  144 References  144 Boxes 2.1 Other refugee groups in Jordan   15 4.1 Reductions in funding and increases in poverty among Syrian refugees   85 5.1 The asset framework and refugee earning capacity   102 Contents | v Figures ES.1 Using the poverty line and poverty gap to identify requirements for basic-needs assistance  xix 2.1 Syrian refugees by date of arrival, before 2011–23   11 2.2 Number of Syrian refugees in camps by arrival date, 2012–23   14 2.3 Demographics of Jordanian and Syrian populations, 2021–22   16 2.4 Syrian refugee household type by place of residence, 2021   17 2.5 Level of education among Syrian refugees by sex and age cohort, 2021  19 2.6 School enrollment of Syrian refugee children by location, 2021   20 2.7 Determinants of Syrian refugee children’s school enrollment, 2021   20 2.8 Housing conditions in and outside of Syrian refugee camps, 2021   21 2.9 Syrian refugee households owning assets by asset type, 2021   23 2.10 Access to services among Syrian refugee households, 2021   24 2.11 Syrian refugees’ reasons for not renewing work permits, 2021   25 2.12 Distribution of working-age Syrian refugees by employment status, 2021  26 2.13 Sector of employment among employed Syrian refugees, 2021   26 2.14 Composition of household incomes among Syrian refugees, 2021   27 2.15 Levels of coping strategies adopted by Syrian refugee households, 2021  28 2.16 Syrian refugees’ mental health by location, 2021   29 2.17 Syrian refugees in Jordan by duration of displacement, 2023   31 2.18 Population pyramids for Syrian refugees, 2015–16 and 2021   32 2.19 Household demographics for Syrian refugees, 2015–16 and 2021   32 2.20 School enrollment among Jordanians and Syrian refugees, 2015–16 and 2021  33 2.21 Employment levels among Jordanians and Syrian refugees by age group, 2015–16 and 2021   34 2.22 Asset ownership among Syrian refugees, 2015–16 and 2021   34 3.1 Syrian refugees’ reported per person monthly nominal consumption according to long and short forms by consumption decile and location, 2021  45 3.2 Cumulative density function of consumption for Syrian refugees living in and outside of camps, 2021   50 3.3 Poverty rates among Syrian refugees by location, 2021   51 3.4 Poverty rates and household size among Syrian refugees by location, 2021  52 3.5 Poverty and family composition among Syrian refugees by location, 2021  52 3.6 Poverty rate and age of household head among Syrian refugees by location, 2021  53 3.7 Poverty rate and household heads’ level of education among Syrian refugees by location, 2021   54 3.8 Poverty rate and occupation type among Syrian refugees by location, 2021  54 3.9 Poverty rate and employment among Syrian refugees by length of stay and location, 2021  55 3.10 Multidimensional poverty among Syrian refugees by location, 2021   59 4.1 Amounts of UNHCR basic needs multipurpose cash assistance transfers to Syrian refugees living outside of camps, 2021   75 4.2 Beneficiaries of largest cash programs among refugees in Jordan, 2023   76 4.3 Number of different aid programs under which refugee cases received assistance by location, 2021    76 4.4 Minimum expenditure basket categories and consumption for refugees in Jordan’s host communities, 2021 Vulnerability Assessment Framework survey  79 4.5 Distribution of refugee household size by location, Jordan, 2021   80 vi | A Triple Win 4.6 Cost of components of minimum expenditure basket by household size, Jordan, 2021  81 4.7 Cost of minimum expenditure baskets, by household size, and composition of refugee households, Jordan, 2021   82 4.8 Distribution of welfare among Syrian refugees with and without assistance by location, 2021   83 4.9 Headcount poverty among Syrian refugees before and after assistance by location, 2021  84 B4.1.1 Impact of reduced food assistance on poverty among Syrian refugees, 2023  85 4.10 Per capita preassistance consumption and assistance among Syrian refugees by location and household consumption decile   86 4.11 Assistance needed to bring incomes of all UNHCR-registered Syrian refugees up to poverty line, 2021   90 5.1 Distribution of non-Jordanians by reason for moving to Jordan   100 5.2 Nationality of males in Jordan as share of age group   101 B5.1.1 Asset framework applied to refugees   102 5.3 Work permits issued   103 5.4 Labor market outcomes of working-age population by gender and nationality  104 5.5 Determinants of labor market outcomes among Syrians in Jordan   105 5.6 Labor force participation among working-age Syrian men in Jordan by education level and age   106 5.7 Share of working-age population not in employment, education, or training by nationality  107 5.8 Distribution of employment among working-age population across sectors by nationality  108 5.9 Sectors among working-age population with highest concentration of Syrian labor  109 5.10 Share of workforce in informality   109 5.11 Share of working-age population in informality, selected sectors   110 5.12 Distribution of employment by nationality across types of occupations  110 5.13 Educational attainment among working-age population   111 5.14 Probability gaps in labor market participation between Jordanians and Syrians and other foreigners and Syrians   112 5.15 Earnings distribution among employed working-age population, by nationality  113 5.16 Difference in probability of receiving low pay (< JD 300) between working- age Jordanians and Syrians and between other foreigners who are working and working-age Syrians   113 6.1 Decomposition of cost of refugee assistance    121 6.2 Ability to earn an income and need for assistance as communicating vessels  123 6.3 Cost of basic needs, with refugee earnings accounted for   123 6.4 Cost and potential savings under different economic participation scenarios  124 6.5 Cost of basic needs assistance under different participation scenarios   125 6.6 Taxes paid and benefits received in Jordan by household income decile  127 6.7 Distribution of refugees by consumption decile under various participation scenarios  128 6.8 Total and per refugee costs of services provision under different participation scenarios  130 6.9 Correlation between country contributions to cost savings and spillover cost  131 6.10 Coincidence of inflow of Syrian refugees with economic changes   132 7.1 Increased economic participation by refugees: A triple win   141 Contents | vii Tables 2.1 Share of Syrians and other foreigners in Jordan, 2004 versus 2015   10 2.2 Distribution of non-Jordanians by governorate, 2015   12 2.3 Household structure of Syrian refugees in Jordan, 2021   18 2.4 Logistic regressions explaining Syrian refugees’ decision to live outside of camps  30 3.1 Number of items in the consumption modules of 2021 Vulnerability Assessment Framework (VAF) survey and 2017–18 Household Income and Expenditure Survey  44 3.2 Monthly consumption per capita per month for Syrian refugees in Jordan, 2021  47 3.3 Composition of the poverty line for Syrian refugees in Jordan, 2021   48 3.4 Estimates of poverty among Syrian refugees in Jordan, 2021    48 3.5 Sensitivity of the poverty line   50 3.6 Correlates of being poor among Syrian refugees, 2021   56 3.7 Composition of Multidimensional Poverty Measure for Syrian refugees and deprivation levels, 2021   58 3.8 Syrian refugees’ scores on Freedom Index components, 2022   61 3.9 Components of an extended Multidimensional Poverty Measure for refugees  63 3A.1 Composition of food poverty basket   65 4.1 Cash assistance provided to refugees in Jordan, as recorded in RAIS, 2018–21  73 4.2 Types of cash assistance provided by UNHCR and WFP in Jordan, all refugees, 2021  74 4.3 Minimum and survival minimum expenditure baskets, Jordan, 2021   77 4.4 Poverty rates among Syrian refugees and targeting efficiency under different targeting options  89 4.5 Comparison of 2014 and 2021 proxy means test models   92 4.6 Targeting efficiency of 2014 and 2021 proxy means test models, refugees living outside of camps   93 4.7 Poverty rates among Syrian refugees and targeting efficiency under different targeting options    94 4.8 Poverty rates among Syrian refugees and targeting efficiency under different targeting options  95 A5.1 Conditional regressions for probability gaps in labor market outcomes   115 A5.2 Conditional regressions for probability of receiving low pay (9 >9 0– 0– 0– 0– 0– 0– 0– 0– 0– 0– 0– 0– 20 30 40 50 70 20 30 40 50 70 Jordanian dinar Jordanian dinar Syrians Jordanians Other foreigners Source: Original figure for this publication using data from Jordan Department of Statistics 2019. Note: Working-age population is defined as those ages 15–64. In panel b, the sample is restricted to firms not in the public sector that are in the following sectors of activity in revision 2 of the Statistical Classification of Economic Activities in the European Community (NACE): construction, manufacturing, wholesale and retail, food and accommodation, and agriculture. FIGURE 5.16 Difference in probability of receiving low pay (< JD 300) between working-age Jordanians and Syrians and between other foreigners who are working and working-age Syrians a. All sectors b. Selected sectors Baseline = Jordanians Unconditional Unconditional Conditional Conditional 0 0.1 0.2 0.3 0.4 0.5 –0.1 0 0.1 0.2 0.3 Baseline = Other foreigners Unconditional Unconditional Conditional Conditional 0 0.1 0.2 0.3 0.4 0.5 –0.1 0 0.1 0.2 0.3 Estimate Low (CI 90%) High (CI 90%) Source: Original figure for this publication using data from Jordan Department of Statistics 2019. Note: Working-age population is defined as those ages 15–64. The figure captures unconditional and conditional differences and 90 percent confidence intervals for the differences in the probability of receiving a monthly pay below JD 300 between Syrians and natives, on the one hand, and Syrians and other foreigners, on the other hand. CI = confidence interval. To estimate conditional gaps, the regressions further control for the same vari- ables as the earlier regressions (gender, age group, civil status, education, regional dummies, and years since arrival and years squared for the model with other foreigners), as well as type of occupation (by International Standard Classification of Occupations [ISCO]-08 one-digit code), sector of activity (by Statistical Classification of Economic Activities in the European Community [NACE], revi- sion 2 one-digit code), an indicator of informality, and number of hours worked. Panel b restricts the regression to firms that are not in the public sector and 114 | A Triple Win sectors of activity accessible to Syrian refugees (construction, manufacturing, wholesale and retail, food and accommodation, and agriculture). After controls are included in the model, the results show that Syrians in Jordan are 17.2 percent more likely than Jordanians and 10.5 percent more likely than foreigners other than Syrians to receive low pay, suggesting wide disparities between Syrians and both groups. Although Jordan’s minimum wage applies to those of all nationalities, wage discrimination with respect to Jordanians persists when the sample is restricted to non-public-sector firms that have a large inci- dence of Syrian labor, but that with respect to other foreigners loses statistical significance. CONCLUSION The Jordanian labor market has witnessed significant increases in the presence of foreign workers over the last two decades, and many of those workers are from Syria. Unlike the vast majority of foreigners of other nationalities residing in Jordan, Syrians are not economic migrants, and hence Syrians in Jordan are less likely to be self-selected based on characteristics positively correlated with economic outcomes in the host country. Chapter 2 highlighted that the sociodemographic profile of the Syrian population differs profoundly from that of its host country and of other foreigners in Jordan: the Syrian population is significantly younger and less educated. Syrians also have higher dependency ratios than both groups and have been in Jordan for a shorter period than other migrants. Although the Jordanian government has tried to ease access to the labor mar- ket for Syrian refugees, labor market outcomes of the broader Syrian population remain challenging. A high incidence of unemployment and extremely low lev- els of female labor force participation are the main challenges. An additional concern is the high share of Syrians ages 15 to 29 who are not in employment, education, or training. The analysis in this chapter indicates that socioeconomic differences do not fully account for the poorer labor market performance of Syrians compared with that of Jordanians and other foreigners. Syrians are less likely to be employed and more likely to earn a low wage than should be expected given their personal and other characteristics. Syrians are subject to constraints in the labor market that Jordanians and other foreigners do not face, or face to a lesser degree, as well as unequal treatment. Additional elements of vulnerability emerge from analysis of Syrians who are employed. The evidence suggests a significant degree of labor market segmenta- tion between Jordanians and Syrians and, to a lesser extent, between foreigners of other nationalities and Syrians. The Syrian workforce is predominantly male and unskilled, which explains the concentration of Syrian workers in low-skill jobs in a small number of sectors, notably construction, manufacturing, whole- sale and retail, agriculture, and food and accommodation.7 The higher incidence of informality among Syrian workers is another striking element of their vulner- ability. In fact, not only are Syrians in Jordan more likely to work in sectors of the Jordanian economy in which informality is most common, but within these sec- tors, they are also more likely to work informally than Jordanian workers. In combination, these and other factors (differences in sociodemographic characteristics, sectors of employment, occupations, formality, and number of Labor Market Outcomes | 115 hours worked) contribute to low wages: Syrians are more likely than Jordanians and foreigners of other nationalities to be working for less than JD 300 per month. The flip side of these low wages is that Syrian refugees are more dependent on assistance for their survival than Jordanians or other foreigners. Yet as chap- ter 4 demonstrated, the amount of assistance provided is inadequate to ensure that all refugees attain an acceptable minimum standard of living. Mindful that earnings and assistance can substitute for one another, the next chapter explores how Jordan, by allowing refugees to work, creates a global public good by reduc- ing the amount of money needed for assistance. ANNEX 5A. ADDITIONAL TABLES TABLE A5.1  Conditional regressions for probability gaps in labor market outcomes BASELINE = JORDANIANS BASELINE = OTHER FOREIGNERS EMPLOYED UNEMPLOYED ACTIVE EMPLOYED UNEMPLOYED ACTIVE Syrian −0.043*** 0.136*** 0.016** −0.307*** 0.232*** −0.196*** (0.01) (0.01) (0.01) (0.01) (0.02) (0.01) Female −0.400*** 0.066*** −0.472*** −0.472*** 0.005 −0.597*** (0.00) (0.01) (0.00) (0.01) (0.02) (0.01) Married −0.022*** 0.126*** 0.074*** −0.042** 0.038** −0.012 (0.00) (0.01) (0.00) (0.01) (0.01) (0.01) Age groups (baseline = ages 25–29) 15–19 −0.299*** 0.152*** −0.430*** −0.298*** 0.184*** −0.313*** (0.01) (0.02) (0.01) (0.02) (0.04) (0.02) 20–24 −0.121*** 0.078*** −0.131*** −0.119*** 0.050* −0.094*** (0.01) (0.01) (0.01) (0.02) (0.02) (0.02) 30–34 0.051*** −0.070*** 0.009 −0.002 0.022 0.009 (0.01) (0.01) (0.01) (0.02) (0.02) (0.02) 35–39 0.072*** −0.093*** 0.021*** −0.016 0.023 −0.000 (0.01) (0.01) (0.01) (0.02) (0.02) (0.02) 40–44 0.032*** −0.098*** −0.026*** −0.051* 0.022 −0.045* (0.01) (0.01) (0.01) (0.02) (0.02) (0.02) 45–49 −0.029*** −0.094*** −0.093*** −0.128*** 0.058* −0.113*** (0.01) (0.01) (0.01) (0.02) (0.02) (0.02) 50–54 −0.134*** −0.106*** −0.212*** −0.207*** 0.064* −0.206*** (0.01) (0.01) (0.01) (0.02) (0.03) (0.02) 55–59 −0.211*** −0.137*** −0.304*** −0.253*** 0.011 −0.279*** (0.01) (0.01) (0.01) (0.03) (0.03) (0.03) 60–64 −0.299*** −0.102*** −0.388*** −0.383*** 0.104 −0.403*** (0.01) (0.02) (0.01) (0.03) (0.06) (0.03) Education (baseline = less than upper secondary) Illiterate −0.073*** 0.046 −0.090*** 0.055*** −0.019 0.035* (0.01) (0.03) (0.01) (0.02) (0.02) (0.02) Upper secondary or −0.058*** −0.013 −0.113*** 0.002 −0.017 −0.034** postsecondary (0.00) (0.01) (0.00) (0.01) (0.01) (0.01) Tertiary 0.132*** 0.045*** 0.195*** −0.096*** 0.035* −0.074*** (0.00) (0.01) (0.00) (0.02) (0.02) (0.02) continued 116 | A Triple Win TABLE A5.1.,  continued., BASELINE = JORDANIANS BASELINE = OTHER FOREIGNERS EMPLOYED UNEMPLOYED ACTIVE EMPLOYED UNEMPLOYED ACTIVE Region (baseline = all other governorates) Mafraq −0.002 0.034*** 0.018*** −0.063*** 0.129*** −0.000 (0.00) (0.01) (0.00) (0.01) (0.02) (0.01) Zarqa −0.053*** 0.053*** −0.043*** −0.103*** 0.115*** −0.062*** (0.00) (0.01) (0.00) (0.02) (0.03) (0.01) Irbid −0.013*** 0.003 −0.016*** −0.024 0.016 −0.010 (0.00) (0.01) (0.00) (0.01) (0.02) (0.01) Amman −0.030*** 0.001 −0.037*** −0.025* 0.027** −0.008 (0.00) (0.01) (0.00) (0.01) (0.01) (0.01) Year of arrival −0.303 −0.005 −0.550** (0.21) (0.16) (0.20) Squared year 0.000 0.000 0.000** (0.00) (0.00) (0.00) of arrival Constant 0.601*** 0.134*** 0.719*** 303.581 5.338 550.912** (0.01) (0.01) (0.01) (205.89) (161.23) (196.09) R-squared 0.316 0.121 0.412 0.497 0.194 0.533 N 153,467 59,269 153,467 12,152 5,953 12,152 *p < .05 **p < .01 ***p < 001 TABLE A5.2  Conditional regressions for probability of receiving low pay (