Winners and Losers: Syrian Refugees’ Impact on Türkiye

The implications of Türkiye’s position as the world’s largest host for refugees have predominantly been framed around social and political costs. With nearly 3.5 million Syrians and mounting economic challenges, the public discourse has increasingly turned toward repatriation. However, beneath the political rhetoric lies a deeper economic reality: Syrians have become essential to key economic sectors, filling labor shortages and fostering international trade, although the state—partly due to its own policies—carries much of the burden of hosting them.

Turks Benefit from Syrian Labor

Over the past decade, Syrians have evolved from being a transient workforce to becoming indispensable in labor-intensive sectors like agriculture, construction, and textiles. This shift has been gradual but significant. According to the International Labor Organization most work informally, exceeding the 45-hour per week legal limit, and are often paid below minimum wage, making them more cost-effective than their Turkish counterparts. These characteristics of Syrian employment are essential for Turkish employers in sectors such as garments, agriculture, and construction—known for low pay and harsh conditions, which Turkish workers are less willing to accept.

In the garment sector, ranking fifth in Türkiye’s total exports in 2022, 31% of Syrians are employed almost entirely informally. Similarly, an estimated 8-12% of Syrians work in agriculture—though this figure is likely higher—benefiting from exemptions for seasonal work permits.

Despite the legal requirement for Syrians under Temporary Protection to obtain work permits, by 2023 less than 110,000 permits had been issued. This means that over one million Syrians are working informally. The main deterrents for employers to formalize these jobs are high costs and bureaucratic procedures; as a result, they opt for informal hiring, saving an estimated $2 billion US in 2020 ($8.2 billion 2024-adjusted).

The widespread employment of Syrians without work permits has created a problematic and exploitative labor system with several negative repercussions. First, it undermines local Turkish workers by suppressing wages, fueling resentment between Turks and Syrians. Second, the state loses out on significant fiscal revenue through taxation. Informal Syrian employment costs the Turkish social security system approximately 7.1 billion Turkish lira (TRY; about $1.9 billion) annually in uncollected contributions, while the government still bears the cost of providing health services to refugees under temporary protection. This imbalance strains state resources and threatens the sustainability of public services.

Benefits to International Trade

The influx of low-cost Syrian labor has boosted the competitiveness of Turkish exports. Faster export growth in provinces hosting more Syrians suggests an additional benefit: a network effect where Syrian refugees use their entrepreneurship, connections, and familiarity with Syria to facilitate trade.

Syrians’ entrepreneurship is evidenced by the significant number of registered companies since 2012. By 2014, one in three companies in Kilis and one in six companies in Gaziantep had at least one Syrian shareholder. As a result, Turkish exports to Syria from provinces with the largest Syrian refugee populations—Gaziantep, Hatay, Kilis, and Sanliurfa—rose notably after 2012.

While Türkiye’s overall exports to Syria between 2010 and 2023 rose 11%, those exports rose by 132% from the four provinces hosting most Syrians. The presence of Syrian refugees in these regions has literally reshaped trade patterns between Türkiye and Syria: in 2010, just 17% of Türkiye’s exports to Syria originated from these provinces, compared to 37% in 2023.

A similar pattern emerged in Turkish exports to the entire Middle East and North Africa (MENA) region. The influx of Syrian traders and industrialists fleeing the conflict has contributed to a notable rise in exports to MENA countries, reinforcing the broader economic benefits of integrating Syrian business communities into Türkiye’s economy.