Greater local supply of language courses improves refugees' labor market integration

Utilizing the German residential allocation and residency obligation policies, which can be regarded as a natural experiment, we investigate the causal effect of the local supply of language courses on refugees' labor market integration. By restricting refugees' initial and post-arrival regional mobility, these policies allow us to circumvent the potential problems of initial and post-arrival residential selection. Moreover, we examine the intermediary outcomes - language proficiency, language course completion and certification, and contacts with natives - through which the local opportunity structure of language courses shape refugees' economic integration. Our results reveal that the local supply of language courses positively affects refugees' employment probability, and this effect persists over the duration of stay. We further find that greater supply of language courses in the assigned county increases probability of learning the German language, completing the course and receiving language certificates. From a policy perspective, our findings imply that the local provision of language courses should be considered in refugees' residential allocation to facilitate immigrants' integration. This is because limited access to such courses can delay host country language learning, language certificate obtainment, and labor market entry, thus slowing the integration of recently arrived immigrants.