In the UK, there is currently increased political polarisation on topics of immigration and refugee asylum, which has proven to be a point of contention in the upcoming election. Without getting involved in the political question, we have recently done research into the economics of refugee integration. Refugee integration is a complex process with significant economic implications for host countries. Our research, funded by the Commission on the Integration of Refugees is part of an effort to improve the integration of refugees in the UK: we focused on the economic benefits. This involves expediting asylum application processes and providing essential support services like employment opportunities, language training, and specialised mental health care.

This World Refugee Day, we reflect on the findings which highlight substantial economic advantages from these interventions, and the critical need for policy reforms to enhance the integration process. An integration-focused asylum system can offer extensive benefits, not only to refugees but also to society at large.

The current scenario

There have been several UK schemes to date to receive and integrate refugees in the UK, often announced after the event of a world crisis which triggers the forced movement of people, such as conflicts, natural disasters and climate crises. Under the current asylum system, asylum seekers face several barriers to integration. There are also substantial costs associated with processing applications and providing individuals with basic support and accommodation. In the first year after arrival to the UK, the costs for a cohort of around 44,000 asylum seekers were estimated to be over £1.6 billion. This figure includes expenses for accommodation and administrative processing. Waiting times for asylum seekers are long, with it taking an average of 18 months since arrival to the UK for their applications to be processed, during which they cannot work or contribute economically, creating uncertainties and leaving many living in precarious conditions.

How can we improve the current system?

Using the model we constructed and populated with data, we explored three interventions that could improve refugee integration and potentially save the UK billions of pounds. These are: reducing application processing times, providing employment and English support, and specialised mental health care. 

1. Reducing application processing times

Delays in processing refugee applications contribute significantly to the overall cost of refugee integration. Our model demonstrates that expediting the asylum application process, though initially more expensive, yields significant economic benefits in the long term. By reducing the waiting times on application process to 6 months, the first year's costs increase to approximately £1.96 billion with benefits of £46 million. While this figure is approximately £280 million higher than the current estimates, over time the costs stabilise and, by the third year, the economic benefits surpass the costs – with a net benefit of around £200 million – and a notable shift in the composition of expenses. Faster processing allows asylum seekers to gain refugee status and enter the workforce more quickly. By year five, these net benefits increase to £750 million, illustrating a significant shift from cost to economic contribution.

By accelerating the asylum process, asylum seekers can obtain their refugee status more quickly, enabling them to enter the workforce and contribute economically to the country. This shift reduces their reliance on government support, such as asylum accommodation and support packages, and enhances their ability to achieve financial independence, contribute positively to the economy and expedite their integration.

2. Supporting employment and English language skills

Employment and the ability to communicate in the host country are cornerstones of successful integration. Employment provides refugees with the means to become self-sufficient, build social connections, and contribute to the economy. However, finding suitable employment often hinges on language proficiency. Our research highlights the critical role of learning the English language in the UK and providing employment support in facilitating integration for refugees.

We compared adding employment and language support to the expedited visa processing. We assumed provision of English language support to achieve B1 level, third level on the CEFR scale: being an independent user of the language, the requirement needed to gain a work visa. Employment support was assumed to be formal support to find a job and understanding of the UK job market. In this scenario, refugees not only get their status faster but are also provided with the tools they need to enter the job market more easily. As expected, the costs in the first year are higher due to these additional support, with a difference of around £330 million when considering additional benefits. However, this investment pays off as early as the third year – with a net benefit of around £570 million. With improved employment outcomes, the benefits surpass those of the current scenario and the option of only expediting the visa process. By the fifth year, the economic contributions and tax revenues are significantly higher than currently, with a net benefit of £1.2 billion.

By providing comprehensive language training, refugees can achieve a minimum proficiency level necessary for securing stable employment. This training, coupled with employment support services, significantly narrows the employment rate gap between refugees and the general population. This dual support system not only enhances job prospects, boosting productivity and contributing more robustly to the economy, but also fosters social integration and community engagement.

3. Specialised mental health care

Mental health is another crucial aspect of refugee integration. Refugees are often fleeing highly traumatising and unstable conflict environments, undertaking precarious and often risky journeys to reach their host country, and are then faced with the burden of being plunged into a completely new culture where they know no one, and can't speak the language. This means that refugees often face higher rates of post-traumatic stress disorder (PTSD), depression, and anxiety due to their experiences of displacement and trauma. Providing specialised mental health care can mitigate these challenges, leading to improved overall well-being and better integration outcomes.

This scenario builds upon the expedited process and employment and language support by adding specialised mental health care to address refugees’ need to address trauma, stress and other mental health problems. Again, the initial costs are the highest in this scenario (£390 million), reflecting the investment in specialised care. However, by the third year, the benefits continue to exceed the costs – with a net benefit of around £690 million – driven by notable improvements in both health and employment outcomes. By the fifth year, this scenario achieves the maximum economic impact of £1.3 billion, with substantial savings in healthcare costs and increased productivity. Refugees, now healthier and more stable, are not only able to work but also thrive, creating a positive ripple effect throughout the community.

Our model shows that offering mental health support reduces healthcare costs in the long term. Refugees who receive appropriate mental health care are more likely to adjust to their new environments and be better able to integrate into the community – this means that they can proactively engage in employment and building meaningful social connections. This support also reduces the burden on emergency services and other public health resources, leading to overall cost savings for the government.

What are we missing?

While the model offers valuable insights, it has certain limitations. Models are simplified representations of reality based on assumptions and may not capture all complexities of the refugee experience. The assumptions we made are conservative, and – in particular – the five-year time horizon may miss longer-term benefits. This means benefits may actually be much higher than we think. Additionally, the model does not account for the variety of individual experiences, or the differential outcomes based on the means of arrival. Furthermore, some costs, such as those associated with irregular migrants or undocumented asylum seekers, were not included due to lack of data. The model also relies on population-wide averages for healthcare costs, potentially underestimating the true costs and savings associated with refugee-specific healthcare needs. These limitations do not undermine the core finding from this study - that the three interventions to improve the integration of refugees would generate significant economic gains.

Improving economic gains for all

This World Refugee Day, it is clear that the economic case for expediting and improving refugee integration is compelling. Given the current political climate, and the need to make sure that government spending is as cost-effective as possible, the three interventions we modelled are key. By accelerating the asylum application process and providing comprehensive employment, language and mental health support, the UK can achieve significant cost savings and economic benefits. These interventions not only provide long-term gains for the UK economy, they also improve refugee well-being. This is critical for fostering a more inclusive society, where refugees are empowered to thrive and contribute meaningfully.