Expert Voice

Evidence from Austria: A setback for the labour market integration of refugees?

09 November 2021


Analysing survey data on recently settled refugees in Austria, two new studies by the International Centre for Migration Policy Development (ICMPD) and the Vienna Institute for International Economic Studies (wiiw) show that young people, women, and people with higher levels of qualification were strongly affected by the Corona crisis in the labour market.

By Paul Baumgartner, Veronika Bilger, Michael Landesmann, Sandra M. Leitner, Meike Palinkas

Between 2014 and 2016, during the escalation of the war in Syria, Austria experienced one of the largest influxes of refugees since 1945: within the EU, Austria, together with Germany and Sweden, absorbed the largest number of asylum seekers relative to their population size (Eurostat; asylum statistics). With their arrival in Austria, but at the latest with the granting of refugee status (asylum or subsidiary protection), a process of integration began for these people. Gainful employment plays a fundamental role in this process, as it promotes social contacts with the host society, language acquisition and social recognition in addition to financial independence.

Although Austria had already dealt with the integration of large numbers of refugees in recent decades (from the Hungarian crisis in 1956 and the Yugoslav wars in the 1990s), the large influx in the years 2014 to 2016 was novel as it was the first significant refugee inflow from outside Europe, and the people who came to Austria around 2015 were in several respects very different from the previous cohorts of refugees as far as their qualifications and economic and cultural backgrounds were concerned. How quickly and successfully the labour market integration of these groups would succeed was therefore an important question that could not be answered solely based on the experiences of past refugee movements.

Against this backdrop, the FIMAS project series was launched to shed light on the integration processes of recognised refugees and beneficiaries of subsidiary protection from the main countries of origin – Syria, Afghanistan, Iraq and Iran – living in Austria, with the aim of identifying the factors that facilitate or hinder their integration. The FIMAS survey is a longitudinal survey that has been conducted annually since 2016. It focuses on labour market integration as well as particular factors and other domains of integration (e.g. social integration, educational integration, etc.) that favour or hinder it.

In autumn 2020 the fourth FIMAS survey (FIMAS+YOUTH) was conducted by the ICMPD in cooperation with wiiw, focusing on young and adolescent refugees aged 15-24 in Austria. Two relevant studies were prepared in this context. One study deals with the living conditions of young and adolescent refugees in Austria and focuses on their schooling, education, labour market entry and unemployment, but also on aspects of social integration. A second study is dedicated to the effects of the Corona crisis on the labour market situation of recognised refugees and beneficiaries of subsidiary protection living in Austria. This special panel analysis is based on the sub-sample of survey participants who took part in both the third wave (in spring 2019) and the last wave (in autumn 2020) of the survey. The comparison of the labour market situation of this group of persons in spring 2019 – before the start of the Corona crisis – with that in autumn 2020 – during the Corona crisis – enabled a detailed analysis of the effects of the Corona crisis on the labour market integration of recognised refugees and beneficiaries of subsidiary protection living in Austria.

School and training in Austria: Great opportunity for young refugees

As far as the integration of young refugees (aged 15-24) is concerned, their integration into the labour market should by no means be considered separately from their educational career, which often takes place at the same time. Young refugees are in a phase of training, further education and initial orientation in the labour market.

The opportunity to obtain or catch up on Austrian school-leaving and training qualifications offers young refugees better conditions for entering the Austrian labour market than the generation of parents who arrive with them. The ability of young refugees to acquire German language skills much faster and better in school through daily contact with native German-speakers also favours their labour market integration.

Dropping out of school or training is a common problem that affects almost three out of ten young people: in addition to being overwhelmed by the perceived difficulties of the learning content, financial reasons and the double burden of a job and training are also cited as main causes, which indicates the pressure many young refugees are under to find paid work as soon as possible.

What factors explain the labour market integration of young refugees?

The labour market integration of young refugees is determined by various factors. For instance, the probability of being employed increases with age (within the age group of up to 24 years) and with every year of residence in Austria. Similarly, German language skills are significantly positively associated with employment.

By contrast, the probability of employment is lower for women and for refugees with children as well as for young refugees living in Vienna. The latter points to structural problems in the Viennese labour market, where the majority of refugees choose to live. At the same time, most young and unemployed refugees who live in Vienna are reluctant to move to another province to take up a job there. Their main reasons are the networks they have already established, strong ties with their family in their place of residence, difficulties in finding accommodation, and a general lack of opportunities for mobility.

Around one quarter of young refugees are neither in work nor in education or training (NEET). The main reasons for this are that they have children and associated care responsibilities, that they have dropped out of school or training or that they have chosen Vienna as their place of residence, where the NEET risk is generally higher than in all other provinces.

Young refugees in the Corona crisis

The Corona crisis has had an impact on all aspects of integration of young refugees. Those attending school or training were strongly affected by distance learning and the associated more difficult learning conditions. In the labour market there were upheavals that affected young refugees in particular, for example in the form of dismissals and short-time work (see Figure 1). At the same time, many refugees were employed in ‘system-relevant’ sectors and professions that ensured the supply of food and other consumer goods during the period of far-reaching restrictions on public life. A comparison with the results of earlier surveys conducted before Corona also shows an occupational shift away from trade and gastronomy towards other sectors that were less affected by Corona or even experienced an upswing (e.g. transport and logistics, parcel delivery).

Figure 1: Impact of the Corona pandemic on employment of young refugees

short-time work (Kurzarbeit)
reduced working hours
more often in home office
not negatively affected
Note: Percentages refer to young refugees who were in employment in February 2020 or at the time of the survey in autumn 2020.



The panel study examines the impact of the Corona crisis on the labour market integration of refugees in Austria and is not limited to the situation of young refugees in particular.

Positive labour market dynamics during the Corona crisis

During the Corona crisis very positive labour market dynamics were observed among all refugees included in the FIMAS panel. Figure 2 shows that 80% of all refugees who were employed before the start of the Corona crisis were also employed during the crisis, while 13% were unemployed and the remaining 7% became inactive (top panel). In addition, 51% of all refugees who were unemployed before the start of the Corona crisis entered employment, while 35% remained unemployed and 14% moved to inactivity (middle panel). Only 30% of all refugees who were inactive before the start of the Corona crisis remained inactive, while 70% switched to activity – mainly to employment (bottom panel).

Source: FIMAS panel (data collected in 2019 and 2020), own calculations. 
Note: Weighted data.


However, the labour market situation of female refugees and refugees with high levels of education deteriorated during the Corona crisis

The adverse effects of the Corona crisis on female refugees are mainly reflected in their lower labour market participation. During the Corona crisis female refugees were not only more likely to move into inactivity, but they were also less likely to move out of inactivity into employment.

The Corona crisis affected refugees with high levels of (tertiary) education in several important ways: first, like female refugees during the Corona crisis, refugees with high levels of education were more likely to move from unemployment into inactivity and less likely to move from inactivity to employment.

Second, refugees with high levels of education who remained in employment during the Corona crisis show a more pronounced loss of occupational status (measured by the international ISEI occupational status indicator according to Ganzeboom et al., 1992). In contrast, refugees with either low or medium levels of education experienced no loss of their occupational status, which remained unchanged at pre-pandemic levels. This shows that during the Corona crisis occupational changes took place, but only refugees with a high level of education experienced a loss of their occupational status. Third, our analysis of movements from unemployment to atypical employment shows that during the Corona crisis unemployed refugees with high levels of education were less likely to move into atypical employment.[1] This means that they made less use of the atypical employment opportunities that emerged during the crisis, for example in sectors that were positively affected by its impact, such as parcel deliveries, food deliveries, etc.

The crisis has thus made the possibility of ‘skill-adequate’ labour market integration particularly difficult, which is especially important for people with high levels of education.

The two faces of larger migrant networks

Social networks with other migrants played a central role for the labour market outcomes of refugees during the crisis. However, more extended social networks – both with people from their own country of origin as well as from third countries – had opposite effects during the Corona crisis.

On the one hand, this is reflected in the greater vulnerability of refugees in the labour market: stronger social networks with migrants from third countries were associated with more frequent movements from employment to unemployment, a longer period of unemployment and more frequent movements from unemployment to inactivity, as well as fewer movements from inactivity to employment. Stronger networks with migrants from their own country of origin also led to significantly more frequent movements from unemployment to inactivity.

On the other hand, stronger networks with migrants from third countries led to significantly higher movement from unemployment to atypical employment, suggesting that these networks helped refugees to find more niches of atypical employment that opened up during the crisis, such as delivering food and parcels or restocking shelves in warehouses and supermarkets, for example.