The impact of migrant labor force on housing construction of Iran

Iran has been host to a large number of migrants, mostly Afghan refugees, since 1982. They have been permitted to take jobs in the Iranian labor market, particularly in labor-intensive sectors like manual work and construction that could not easily be filled by nationals. This paper provides a critical review of the impact of Afghan laborers on the performance of the Iranian construction sector during the period 2006–2009 using data envelopment analysis. The results show that, despite the high costs incurred by Iran as host to more than one million refugees, the country has also benefited from the presence of the Afghans. The statistical analysis reveals a significant difference between the efficiency scores of the states using more migrant Afghan labor and those with a lower concentration of these laborers in construction activities. Most of the states that are technically efficient in construction activities have the opportunity to employ Afghan migrants, a labor force that is very competitive and flexible at wages that are unattractive to Iranians. As a result, the Iranian government’s repatriation program for Afghan refugees could be limited because of the low levels of substitution among Afghan and Iranian workers in the field of construction.