Cities Can Unlock Economic Growth by Better Integrating Migrants and Refugees, Report Finds

WASHINGTON, DC — Cities that invest strategically in the economic inclusion of migrants and refugees can significantly boost local growth, expand their tax base and fill critical labor gaps. Yet more work is needed to help unlock the economic contributions of foreign-born workers and narrow gaps in job quality and earnings at a time when many cities are facing mounting financial and capacity constraints, as well as competing priorities such as addressing housing pressures and navigating the impacts of demographic change and the digital and green transitions on local economies.

A new scan of city experiences in the Americas (with a particular focus on Latin America), Asia, East Africa and Europe examines different contexts and priorities for urban economic inclusion and demonstrates how cities can make meaningful progress by using their political capital and existing resources in innovative ways.

The Migration Policy Institute (MPI) and Mayors Migration Council (MMC) report released today first documents the persistent barriers holding back immigrant economic participation, including restrictions on the legal right to work, non-recognition of academic and professional credentials, language gaps and lack of access for would-be entrepreneurs to local networks, credit and business support. The study then examines the levers cities hold to foster economic inclusion before detailing high-impact interventions that can unlock immigrants’ skills and strengthen urban resilience.

Drawing on research and consultations with city officials, civil-society actors and migrants and refugees in cities ranging from Chiang Mai, Thailand and Jijiga, Ethiopia to Gdańsk, Poland; Cuenca, Ecuador; and St. Louis, Missouri, the report offers three principles for city leaders to invest “surgically and strategically” in economic inclusion programs at a time of shrinking budgets and heightened sensitivity around immigration:

1. Enable labor market advancement, not just entry. Economic inclusion should be treated as an ongoing process, not a one-off intervention, with programs focused on connecting newcomers to stable, high-quality jobs over time, not just the first available position.
2. Align employment opportunities with high-growth sectors and those facing labor shortages. Cities should prioritize investments that respond to their most pressing economic and societal goals, such as building targeted upskilling pipelines for the green economy or moving vulnerable workers out of low-wage, precarious or unsafe jobs.
3. Prioritize win-win measures that benefit both long-term residents and newcomers. Embedding economic inclusion into broader city priorities that can garner broad public support, such as filling needs in care systems or infrastructure, makes initiatives more politically durable and more likely to attract stable funding.

"By focusing on what is achievable, sequencing reforms and aligning inclusion measures with broader economic and urban priorities, cities can transform familiar principles into tangible progress to ensure that migrants and refugees contribute to urban economies’ adaptation and shared prosperity for all residents,” write MPI analysts Kate Hooper, María Jesús Mora, Abigail Goldfarb and Natalia Banulescu-Bogdan.

Seven Actions City Leaders Should Take Now

The report offers a practical road map, highlighting high-impact actions for city leaders and partners:

1. Set the agenda and the tone. In a polarized environment, city leaders who publicly champion economic inclusion as a priority create enabling conditions even when broader barriers remain.
2. Break down silos. Centralizing migrant integration across employment, housing, education and planning portfolios rather than treating it as a standalone issue, produces better outcomes.
3. Leverage data in new ways. Local data gaps impede cities’ insights into the economic participation of migrants and refugees. Combining and systematically analyzing existing administrative data and investing in monitoring and evaluation of city programs can better guide future investments.
4. Use innovative financing to do more with less. Cities should explore ways to diversify funding, whether by embedding inclusion into other programming (such as urban renewal or green infrastructure) or exploring uses of pooled funding models that blend public, philanthropic and private resources.
5. Include diverse community voices. City leaders should draw on the expertise of non-governmental partners and migrant and refugee communities to ensure economic inclusion programs are responsive to real-time barriers and opportunities.
6. Plan for future labor market needs. As artificial intelligence and digital transformation reshape urban economies, cities must build flexible employment and entrepreneurship supports that adapt to changing needs.
7. Appeal to a broad and diverse coalition. Getting public and political buy-in by demonstrating tangible returns to local communities, from filling skills gaps to expanding the tax base, is as critical as the technical design of programs.

“As cities become more diverse in the coming decades, investing in economic inclusion may help determine whether cities experience economic growth or stagnation and decline,” the report notes. “Cities are often hubs of innovation for promoting labor market entry, job mobility and entrepreneurship. But this does not happen by chance. In a challenging funding landscape, cities will need to think creatively about what is achievable, where there are opportunities for coordination and partnerships, and ways to align economic inclusion measures with broader economic and urban priorities.”

About the Report

The research for the report, Creating Inclusive Urban Economies for Migrants and Refugees, was supported by the Mayors Migration Council, a sponsored project of Rockefeller Philanthropy Advisors, Inc.

Read the report here: www.migrationpolicy.org/research/inclusive-urban-economies.