An estimate of the effect of waiting time in the Danish asylum system on post-resettlement employment among refugees: Separating the pure delay effect from the effects of the conditions under which refugees are waiting

We provide an estimate of the effect of refugees' length of waiting time in the Danish asylum system on their subsequent employment using administrative data. In contrast to previous studies, we take into account that refugees' labor market integration is delayed since their labor market access is restricted during the asylum-seeking phase. We find that an additional year of waiting time decreases subsequent employment by 3.2 percentage points on average. This effect is mostly driven by the delay in the labor market engagement among refugees. Waiting time may have an effect on subsequent employment that is additional to the delay effect, and this could be either positive or negative depending on the nature of the conditions under which asylum seekers live while waiting for their cases to be processed. We find that this additional effect is positive and statistically significant until observable individual characteristics are included, at which point it becomes small in magnitude and no longer significant.