Using Behavioral Economics Insights to Determine the Likely Causes of the High Rate of Unemployment in Refugee Camps and What Can Be Done to Alleviate It

Abstract

Leaving one country and relocating to another because of wars, conflict, and natural disasters has an impact on many different areas, including the labor market. As a result, despite the difficulties, people strive to adjust to their new surroundings. This study focuses on the high unemployment rate in refugee camps, which has a wide-ranging influence on refugees. It applies behavioral economics to investigate the likely causes of this problem and propose various solutions that can assist in mitigating it. In this work, we look at the role of biases in the unemployment crisis, such as the status quo bias, anchoring bias, conformity bias, and implicit discrimination, all of which are underutilized in refugee camps. For example, refugees choose to rely on donations as a default rather than examining other choices and have contributed to the problem’s rise. However, taking these biases and heuristics into account, as well as applying behavioral economics insights to the design of prospective solutions, would help to reduce the unemployment problem.