The series of global shocks in recent years that started with the COVID-19 pandemic and was compounded by a cost-of-living crisis has brought widespread turmoil to lives and livelihoods, with far-reaching consequences for both displaced and host households.
Our new report presents a comprehensive analysis of how forcibly displaced populations (FDPs) fared during the first two years of the pandemic. The report draws from a newly harmonized database with data from high-frequency phone surveys on displaced refugees, IDPs and nondisplaced populations in 14 countries during that two-year period. (The report includes harmonized data from Bangladesh, Burkina Faso, Chad, Costa Rica, Democratic Republic of Congo, Djibouti, Ecuador, Ethiopia, Iraq, Jordan, Kenya, Mexico, Somalia, and Uganda).
The data offers unique insights into the welfare of FDPs relative to their hosts, while also allowing for comparisons across countries and between affected populations (internally displaced persons, refugees, hosts) and accommodation types (in camps, out of camps).
For instance, FDPs typically experienced larger initial employment losses that were then followed by a slower recovery (figure 1). In addition, there were significant job changes—often into lower-quality jobs—among those who remained employed, again with higher rates among FDPs.
Figure 1. Share of Employed by Host and FDP Type, before and during the Pandemic (%)
Source: Staff calculation using HFPS.
Welfare impacts were much more widespread than employment losses alone. Although labor income losses were most common, in some countries, a high share of FDPs reported reductions in financial assistance, another important source of income. Food insecurity reached alarming levels during the pandemic, with FDPs almost always reporting worse outcomes (figure 2). Efforts to support those in need likely fell short, leaving much of the negative welfare shock unmitigated.
Figure 2. Food Insecurity Experience Scores
Source: Staff calculation using HFPS.
On top of the economic setbacks, nonmonetary dimensions of well-being were significantly affected, including hard-earned gains in education lost during long school closures. Although there was evidence of some recovery in access to learning after the worst of the pandemic, a significant share of those who had attended school before the pandemic did not return even after schools were reopened (figure 3).
Figure 3. Share of Households with Children Accessing Education before and during the pandemic (%)
Source: Staff calculation using HFPS
Tightened fiscal constraints from responding to COVID’s broader impacts meant host countries were often ill-equipped to extend support to displaced populations. Worse, external aid for FDPs declined in 2020, during the most acute phase of the pandemic (figure 4, left), even as overall aid increased (figure 4, right).
Figure 4. Trend in Aid for Displaced Situations (left) and Total Aid Flows (right) (constant 2020 US$ million)
Source: Staff calculations using OECD CRS disbursement data.
Asset and savings losses will take time to rebuild. Extensive learning losses could be compounded as young people enter the labor market, and their future earnings are further diminished. Their learning capacity may be compromised if exposed to repeated episodes of hunger. Displaced children are especially disadvantaged due to their lack of financial stability and heightened vulnerability.
What can be done to address these challenges?
Building such resilience will reduce the financial burden on host countries and is more sustainable than reliance on humanitarian assistance.
Refugees often do not have full legal rights to work in their host countries, and the absence of such rights correlates with lower employment levels. Granting FDPs formal access to the labor market can be a positive step toward greater self-reliance. Indeed, labor market participation tends to be higher in countries that grant work rights for refugees. Coupled with providing refugee children access to national education systems, these policy adjustments can transform FDPs from being a fiscal burden to an economic asset.
Sustainable financing solutions that allow for continued investments and longer-term planning will be critical to easing the burden on host countries. However, as we learned during the pandemic, a key challenge of current displacement financing is that it may not be available when it is needed the most. Many host countries rely heavily on official development assistance for government spending and for supporting displacement situations.
Financing arrangements need to be predictable and reliable for planning purposes beyond the short term. The World Bank’s International Development Association (IDA) Window for Host Communities and Refugees can help with FDPs crossing national borders, but a similar financial vehicle does not exist for the far more numerous internally displaced populations.
Finally, a reflection on data: The complex nature of displacement underscores the need for more and better data to help design better policies. Although high-frequency phone surveys cannot fully replace traditional approaches, our experience shows that if implemented rigorously they can nonetheless be a useful and reliable source of information when face-to-face efforts are not practicable.
Generating reliable sampling frames for FDPs requires up-to-date and complete registration databases, access to which can be facilitated by formal data sharing agreements. Baseline metrics are critical for analysis over periods of crisis or recovery, underscoring the need for regular data collection and welfare monitoring. Harmonization would be greatly aided by using standardized survey instruments, particularly as they integrate the UN Statistical Commission’s recommendations on refugee, IDP and statelessness statistics (EGRISS). Including FDPs in data collection efforts is critical for identifying the magnitude of welfare shocks and allowing for better targeted responses.