The Interaction of Refugee Arrivals and Policy

More than 2 million refugees arrived into Europe between 2014 and 2016. Germany was the main destination, attracting the largest share of the flow. This paper shows why this was the case. The German government undertook a series of policy measures as a reaction to the flows and these measures had an effect on subsequent arrivals. We estimate the causal effect of policies on arrivals and find how relevant German policies were. Our identification strategy is based on the evolution of the news cycle in the German media. As refugee-related news took center stage, the German government responded by changing its policies. In the absence of the media-public opinion pressure, we generate counterfactual scenarios of how large the flows would have been.