Anecdotal evidence has repeatedly highlighted the links between displacement and low levels of socioeconomic development, and the need for governments to invest in preventive solutions if they want to ensure inclusive and sustainable development. More systematic, quantitative evidence is needed to demonstrate the short and longer-term economic impacts of internal displacement and generate the political will to address the phenomenon.
This thematic series aims to measure the effects of internal displacement on the economic potential of IDPs, host communities and societies as a whole, bridging the knowledge gap through innovative research, partnerships with experts and practitioners from a wide range of disciplines and consultations with policy stakeholders concerned with economic development.
Uncovering the hidden cost of internal displacement would help make the case for increased country-led investments in risk reduction and durable solutions. Past studies have assessed the impact of international migration and refugee flows on work and other singular dimensions such as health or education. Others have attempted to assess the socioeconomic impact of cross-border or internal displacement at the local level.
However, a systematic, quantitative estimate of the overall impact of internal displacement on an economy has yet to be made, and doing so requires new concepts and methods. This document introduces a new conceptual framework to assess the economic impact of internal displacement comprehensively across dimensions, time, countries and displacement contexts.
Lost production due to internal displacement
Beyond the losses caused by a disaster’s destructive force, less direct consequences can also impact the economy. One is the inability of people displaced by the disaster to continue their habitual work. By disconnecting people from their productive activity for days, weeks, months or even years, internal displacement reduces economic production.
In the case of the earthquake that hit Nepal in 2015, this reduction amounted to nearly two per cent of the country’s GDP, or $406 million.
In the case of the 2017 earthquake in Mexico, internal displacement led to an estimated reduction in economic production of $160 million, or 0.01 per cent of Mexico’s GDP.
In the case of the 2018 Hurricane Ike that it Cuba, internal displacement let to a loss of $131.7 million, or 0.22 per cent of the island's GDP.
Multidimensional impacts of internal displacement
Internal displacement affects the lives of displaced people, their host communities and those they leave behind in many ways. We identified seven dimensions that need to be considered - health, livelihoods, education, housing and infrastructure, security, the environment and social life. This report presents the results of a systematic review of nearly 1,000 publications on the impacts of internal displacement in each of these dimensions.
Our analysis highlighted recurring effects that must be assessed more systematically, but also knowledge gaps where more research is needed. It confirmed the variety and intensity of internal displacement’s repercussions and showed how they all relate to each other.
As part of IDMC’s research programme on the economic impacts of internal displacement, we will build upon this work to develop new tools to assess these impacts’ consequences on the economy at the individual, community and national levels.
Internal displacement and development: a statistical analysis
The link between internal displacement and socioeconomic development has been discussed in a number of publications but never studied systematically. This paper presents the key findings of a statistical analysis highlighting correlations between the number of new internal displacements recorded by IDMC in conflict or disaster settings and approximately 1,500 socioeconomic indicators published by the World Bank.
Although it does not identify which indicators represent drivers or impacts of internal displacement, or relate to other potentially less visible variables, this analysis demonstrates the need to consider not only the economic, but also the social and environmental dimensions of development and highlights areas of interest for future research.
Understanding how socioeconomic development relates to internal displacement, as a driver or as an impact, can help governments assess displacement risk, improve crises prevention and response plans, track progress in reducing the severity of displacement situations, evaluate the effectiveness of policy decisions and support national accountability.