Research Roundup: March 2022

The Long-Term Benefits of Welcoming Refugees

The Russian invasion has displaced 10 million Ukrainians, with many migrating as refugees to nearby countries. Often, experts focus on the short-term challenges that countries face when they accept large numbers of refugees into their populations. But regions that admit refugees across their borders can see significantly higher wages and income per capita years later, say Antonio Ciccone, professor of macroeconomics at the University of Mannheim in Berlin, and Jan Nimczik, assistant professor of economics at ESMT Berlin. 

For their recent research, Ciccone and Nimczik compared the economic development that occurred in Germany’s modern Baden-Württemberg region after World War II. From 1945 to 1949, the region was divided between French and U.S. occupation. But while France limited the influx of refugees into its zone, the U.S. did not institute such restrictions. 

The researchers analyzed data related to historical census, economic outcomes, geography, income tax, firm productivity, and education in the region. They were especially interested in how each zone’s refugee intake in the 1940s affected productivity, wages, income, rents, education levels, and population density. 

For example, Ciccone and Nimczik analyzed data related to two towns on either side of the former border between the U.S. and French zones. They found that, as of 2020, the population density of the town on the U.S. side was 25 percent greater than the population density of the town on the French side. 

The pair also found that towns on the former U.S. side have experienced higher income per capita, firm productivity, wages, and rents than their French counterparts. By their estimates, the U.S. acceptance of refugees raised income per capita by 13 percent and hourly wages by 10 percent. Ciccone and Nimczik found no socioeconomic differences in these zones prior to the arrival of refugees.

Public debate about refugee acceptance naturally focuses primarily on short-term humanitarian considerations and medium-term challenges, the co-authors note. But the long-term benefits can be “considerable.”

“War, civil conflicts, economic collapse, climate change, and natural disasters continue to cause massive refugee movements around the world,” they conclude. “We hope that our analysis can contribute to the public debate on the benefits and costs of admitting refugees.”

Young People Mistrust Media, Corporations

Young adults express more mistrust of information distributed by the media than ever, according to a new report from SKEMA Publika, an independent think tank at SKEMA Business School, which is headquartered in Lille, France, and Antidox, a communication strategy consulting firm based in Paris. 

For its recently released EYES Report: Thoughts of International Youth, SKEMA Publika surveyed the social media posts of 2.8 million 18- to 24-year-olds from the U.S., Brazil, China, France, and South Africa. Researchers evaluated 55.5 million tweets that these young people posted between July 2020 and June 2021, in order to determine the sentiments of young people regarding five political topics: mainstream media and the press, social networks, security, new technologies, and the world of work. 

These young people expressed the strongest negative opinions when discussing “media” and the “news,” with nearly half of the tweets containing these two words expressing negative perspectives. Youth in the U.S., especially, questioned the trustworthiness, credibility, and reliability of traditional media.

Young people are decrying “a biased and sensational reporting of news by traditional media outlets as well as the systematic absence of fact-checking,” the study notes. As a result, they increasingly are turning to social networks as their primary news sources.

Young people are decrying what they perceive as biased reporting by traditional media outlets and increasingly are turning to social networks as their primary news sources.

Young people expressed a similar distrust of corporations. Of the 53,200 tweets that included phrases such as “world of work, “professional world,” or “working world,” many had negative connotations. When young people in Brazil, South Africa, and the U.S. mentioned “companies” in their tweets, 48 percent of the mentions were negative.

Young people’s distrust of corporations “should raise a major red flag for leaders in the public and private spheres,” says Claude Revel, director of SKEMA Publika and a co-author of the report. Although the younger generation’s negative attitudes about work could reflect, in part, anxiety over entering the workforce, she adds, these findings underscore “the possible radical changes occurring in attitudes toward work and the need [for businesses] to adapt practices.” 

For instance, 18- to 24-year-olds increasingly expect the companies they work for to take stands on political, social, and environmental issues. Young people also expect to achieve greater work-life balance in their jobs, specifically related to flexible working hours (37 percent) and annual leave (34 percent).

Revel believes that business schools could respond to these findings in two ways. First, they could be sure to give students a realistic view of the positive role business organizations play in the world. And, second, they could encourage their corporate partners to better adapt their policies to the outlook of today’s younger generation.

When Social Ties Are Sources of Stress

When people socialize with others who work in emotionally demanding jobs, they are more likely to have emotionally demanding jobs themselves, according to a new study forthcoming in the Journal of Management. Its co-authors include Andrew Parker, a professor in leadership at Durham University Business School in the U.K.; Christian Waldstrøm, an associate professor of management at Aarhus School of Business and Social Sciences in Denmark; and Neha Parikh Shah, a director at Microsoft’s Viva Insights organization. 

The fact that people with demanding jobs often socialize with colleagues with equally demanding jobs is “a double-edged sword,” the co-authors note. On the one hand, when people share the challenges they face at work with others, it can be a source of stress relief. On the other hand, such interactions also can increase employees’ stress across the board in a form of “performance contagion.” 

Parker, Waldstrøm, and Shah surveyed 135 employees in the research and development department at a manufacturing company about their work environment and work-based social networks. The researchers also asked company supervisors questions about each employee’s individual performance. The research team then compared details related to employees’ social networks and the emotional demands of their jobs to aspects of their job performance.

The analysis supports the co-authors’ theory that “individuals who have reciprocated ties to others who have higher emotional job demands will themselves have an increase in their emotional job demands.”

The researchers suggest ways that employers can maximize the positive effects of work-based social ties, while minimizing the negative effects. For example, companies could use job rotation to change up employees’ networks, as a way to counteract performance contagion. The authors also recommend that organizations offer self-awareness and personal effectiveness training to help employees understand how their actions and behaviors affect others.

Counteracting ‘Proximity Bias’

Now that many companies are returning to their physical offices, their workers expect to continue working from home, at least on a part-time basis. But the more employees work from home, the more their careers might suffer due to a lack of visibility at work. This is a finding of a recent white paper by the Future Forum, a consortium dedicated to building more flexible, inclusive, and connected work environments. 

In November, the Future Forum surveyed more than 10,700 knowledge workers across the U.S., the U.K., Australia, Germany, France, and Japan about their productivity, sense of belonging at their companies, and preferred way of working. Among respondents, 68 percent of those surveyed said that they now prefer hybrid work arrangements. “Remote and hybrid employees score higher than full-time office workers on all elements of the employee experience,” the paper notes. These elements include areas such as work-life balance, a sense of belonging, and the strength of work relationships.

Among business leaders surveyed, 41 percent fear that remote and hybrid workers could fall victim to “proximity bias,” which could limit remote employees’ access to professional opportunities.

Seventy-eight percent of these workers said that they want location flexibility in their work, while 95 percent want schedule flexibility. According to the survey, 72 percent of respondents who indicated they were unhappy with the level of flexibility in their jobs said that they would look for new jobs in the next year. 

But 41 percent of the business leaders surveyed by Future Forum fear that remote and hybrid workers could fall victim to “proximity bias,” which could lead to “inequities between co-located and remote employees.” This bias could be especially harmful to members of underrepresented groups, whose access to opportunities such as promotions and career mobility might be limited by work-from-home arrangements.

To counteract proximity bias, the paper recommends, companies could set guidelines of behaviors that will maintain level playing fields for all employees, such as meeting policies that note “if one dials in, all dial in.” Companies also can reskill their managers in the competencies required to lead and build connections within diverse and distributed teams.

“Leaders who hope to retain top talent and maintain diversity must act swiftly and deliberately to counter the forces of proximity bias,” the paper’s authors emphasize. “If they don’t, they risk further entrenching structural inequality along racial and gender lines.”

Entrepreneurship Is Bouncing Back

Pandemic-driven lockdowns might have hit small businesses hard in 2020, but those economic effects did not seem to deter entrepreneurs in 2021. The 2021/2022 Global Entrepreneurship Monitor (GEM) found that as of 2021, the level of total early-stage entrepreneurial activity (TEA) among 18- to 64-year-olds had nearly returned to the pre-pandemic level of 16.5 percent—at least in the United States. 

In fact, 66 percent of adult Americans surveyed said that they thought it was easy to start a business, and 63 percent said that the pandemic had created good business opportunities. The report also found that, in 2021, the number of U.S. adults running single-employee companies—so-called “solopreneurship”—had increased nearly 20 percent over 2020 numbers. The researchers speculate that this could be a result of more people seeking more flexible work arrangements during the pandemic.

“While some of the United States’ entrepreneurs may have chosen this route due to economic necessity, many have done so because of opportunity and positive perceptions of starting a business and self-confidence in their skills and abilities,” says Babson College’s Jeffrey Shay, one of the report’s eight co-authors.

In 2021, outside the U.S., business owners in 15 out of 47 economies said they agreed that the pandemic had created new business opportunities. That’s up from 9 out of 46 economies in 2020. In 18 of 47 economies, more than 50 percent of entrepreneurs agreed that starting businesses had become more difficult, down from 33 of 46 economies in 2020.

This year, the report included a new question related to digital technology. New entrepreneurs were particularly likely to indicate that they plan to use digital technology more extensively over the next six months. That trend reflects the fact that “many people around the world are working differently as a result of the pandemic. The rise in online business and working from home may be the most important and transformative shifts of the century,” the co-authors write.

“Successful entrepreneurship can both drive economic recovery and meet the ambitions of talented and creative individuals across all economies,” they conclude. “Unleashing this potential offers a much better route forward as we hopefully leave the ongoing pandemic behind us once and for all.”