Economic impact of giving land to refugees

Abstract This paper adds to a sparse but growing literature on the economic costs and benefits of hosting refugees, including a unique policy of providing refugees with access to cultivable land. We construct a general equilibrium model from microsurvey data to simulate the spillover effects of giving land to refugees on income and production in the host‐country economy surrounding a refugee settlement in Uganda. Reduced‐form econometric analysis of land allocations at the refugee settlement, robust to several specifications, confirms the simulation finding that providing refugees with agricultural land significantly improves their welfare and self‐reliance. Simulations reveal that refugee aid and land allocations generate positive income spillovers in the local economy out to a 15‐km radius around the refugee settlement. Host‐country households benefit significantly from the income spillovers that refugee assistance creates, and host‐country agriculture is the largest beneficiary among production sectors.