The Aggregate Effects of Reducing Refugees' Barriers to Work: Evidence from the Jordan Compact

This project investigates the misallocation of Syrian refugee workers in Jordan. Despite eventually gaining the right to work under the Jordan Compact, many Syrian refugees remain in the informal sectors that were easy to access initially, underutilizing their skills. We attribute the persistence of this misallocation in part to the lack of personal connections, or "wasta” in Arabic, which play a central role in job search and matching in Jordan. By virtue of displacement and entering the labor market without legal rights, Syrian refugees’ connections are limited to highly informal sectors and thus they struggle more than locals to access jobs that match their skills. This project will experimentally pair Syrian refugees with Jordanian counterparts to enhance their connections, thereby improving job matching and labor market outcomes. We aim to answer whether increasing refugees' connections can significantly boost their employment prospects, aligning jobs with their skills and improving productivity. The study also emphasizes the consequences of adverse initial labor market conditions in creating and perpetuating the misallocation of refugees across occupations, even after labor market conditions improve.