Effect of Immigration Policy on Labour Market Outcomes for Refugees in Sweden - The "Swedish Temporary Aliens Act" of 2016

Sammanfattning: Immigration has played a significant role in Swedish politics for decades, but the effect policy-making has on different immigrant groups remains disputable. This study researches how the Swedish Aliens Act implemented in 2016 has affected the unemployment rate of refugees in Sweden. To test for this, a difference-in-difference regression model is used with data obtained from Statistics Sweden (SCB) on unemployment rates for three different groups. The treatment group is refugees and the two control groups looked at are other immigrants and Swedish natives. The results obtained show that the unemployment rate of refugees has increased after the implementation of the reform in 2016. This result is partly explained by receiving temporary residence permits instead of permanent permits, as it affects their employment opportunities. The results additionally show that the effect on refugees' unemployment rate is the same when comparing refugees with other immigrants or Swedish natives. The discussion of the results highlights the lack of an immediate change in the trends of refugee unemployment rates in the post-reform period, indicating a time lag in the effect of the reform. However, despite the issues, this paper concludes that the Swedish Temporary Aliens Act has increased refugee unemployment rates in Sweden.