Limbo or leverage? Asylum waiting and refugee integration☆

We study labor market and health implications of asylum wait time, a policy margin with bearing on public finances. The analysis exploits a rapid and unexpected increase in pending applications, which extended processing times with several months for new asylum seekers to Sweden. Longer waiting slows down integration by delaying labor market entry and decreasing participation and performance in active policy measures. Accumulated earnings during the first four years after application are 2.6 percent lower per added month of waiting. The impact is due to delay, not to negative human capital effects of waiting per se. There is no evidence of detrimental effects on psychiatric or other forms of health. Importantly, our results suggest that asylum seekers in Sweden can use the waiting time for useful preparations. The analysis consistently indicates that case workers, teachers and employers involved in post-asylum integration measures perceive individuals who have waited longer as more prepared.