What Drives Refugees’ High Poverty in the Early Years after U.S. Resettlement?

The United States has historically been the world’s top destination for resettled refugees, welcoming on average approximately 73,000 annually from the establishment of the modern U.S. resettlement program in 1980 through 2025. While refugees are welcomed for humanitarian reasons, they are expected to reach self-sufficiency quickly. Evidence suggests that, over time, refugees make important economic contributions to the United States, including by working, starting businesses, paying taxes, and helping revitalize local economies.1 Refugees participate in the labor force at rates comparable to or higher than the native born, a pattern that may partly reflect the U.S. resettlement program’s emphasis on rapid employment. In 2023, for instance, 89 percent of refugees of working age (18 to 64 years old) who had been resettled in the United States in the previous five years were employed, compared to 60 percent of U.S.-born adults (age 16 and older) and 65 percent of immigrants overall.2 Over the long term, refugees and people granted asylum in the United States contribute tens of billions of dollars more in taxes than the government spends on them.3

All the same, many refugee households live in poverty in the initial years after resettlement. Compared with the overall U.S. population, new refugees are disproportionately likely to experience poverty in terms of their household incomes as well as deprivations in health, education, and other areas of life, when assessed from a multidimensional perspective. This reality has been used recently to support efforts to dramatically narrow the scope of U.S. resettlement, which was capped at 17,500 for fiscal year (FY) 2026, with most spots reserved for Afrikaners from South Africa (see Figure 1).4

This poverty is often the result of forced and unplanned displacement as well as structural barriers facing newly arrived refugees post-resettlement, rather than innate attributes in the individuals themselves. The U.S. resettlement program encourages refugees to obtain employment as quickly as possible, often resulting in jobs with low barriers to entry that tend to offer low wages and limited career mobility. Refugees’ difficulties getting their education and credentials recognized, limited English proficiency, and inaccessible transportation and care services can also compound the problem. Meanwhile, the Trump administration has reduced initial federal assistance, including by tightening the short-term health-care program for resettled refugees, Refugee Medical Assistance (RMA), and limiting eligibility for Medicaid and the Supplemental Nutrition Assistance Program (SNAP).5

This article provides an overview of the high rates of poverty among recently resettled refugees in the United States. It focuses specifically on refugees’ outcomes within five years of their resettlement, which are captured in the U.S. Department of Health and Human Services’ (HHS) Annual Survey of Refugees.

Refugees Face High Poverty in the Early Years after Resettlement

Compared to the overall U.S. population, poverty rates of newly arrived refugees are very high. Studies by the authors using nationally representative data showed that, from 2016 to 2018, between two-thirds and three-quarters of refugees who had been resettled in the United States within the prior five years had incomes below the federal poverty level.8 These rates were five to six times higher than those of the overall U.S. population during the same period. Refugees’ income poverty rate declined to 41 percent in 2019 but remained nearly four times higher than that of the national population (see Figure 2).

These disparities are more pronounced when poverty is measured multidimensionally. Using an adapted version of the U.S. Census Bureau’s Multidimensional Deprivation Index—measuring deprivations in standard of living, education, health, economic security, and housing9—the authors found that 65 percent of recent refugees experienced poverty in 2020, before the rate declined to just under 60 percent in 2022, when the COVID-19 pandemic contributed to historically low resettlement and prompted a range of government anti-poverty initiatives. Multidimensional poverty rates among recent refugees between 2016 and 2022 were approximately three to four times higher than the national rates.

While official survey data do not extend beyond five years after refugees’ resettlement, evidence suggests that economic outcomes improve over time. Refugees who had been in the United States for a decade had incomes roughly matching those of the overall U.S. population, according to an HHS study focusing on the 2005-19 period.10

Overrepresented in Low-Wage Work

Forced displacement itself can place refugees at heightened risk of poverty, but several structural barriers contribute to refugees being resettled into the working poor category in the United States. The pressure for rapid employment, inability to prove previous academic and professional credentials, limited English proficiency, transportation constraints, and caregiving responsibilities are among the structural barriers that operate as an interlocking system that can economically disadvantage refugees for several years after resettlement.11

The Focus on Rapid Self-Sufficiency

A central issue is the mismatch between resettlement policies emphasizing rapid economic self-sufficiency and the realities of the U.S. labor market, wherein job requirements rarely accommodate newly arrived refugees’ unique circumstances. Because early resettlement support is limited and often tied to quick employment, refugees are frequently pushed to accept jobs with low entry requirements rather than positions that match their skills, credentials, or long-term career goals. Resettlement agencies often lack support to invest in building skills and conducting career assessments before they help place refugees in employment. Job placement typically begins within 90 days of arrival, meaning there is limited time to review or evaluate skills and experience. As a result, many refugees take jobs that are low-wage, physically demanding, unstable, and offer limited opportunities for advancement.

In the authors’ recent study of 336 recently resettled Afghan refugee and humanitarian parolee households in St. Louis, Missouri, and Portland, Oregon, 73 percent of the working heads of households were employed in occupations with limited or no career mobility.12 Consequently, while employment may provide immediate income, it may not always offer a pathway out of poverty. Instead, long work hours, limited benefits, and few opportunities for training or advancement can trap refugee households in cycles of economic insecurity. Another recent study by the authors, on structural barriers to initial refugee services in Missouri, found that both service providers and refugees identified the lack of recognition or undervaluation of refugees’ credentials and professional skills as a major barrier to meaningful employment.13

The failure to recognize refugees’ qualifications represents an underutilization of human capital with impacts across U.S. society.14 Barriers to credential recognition are multifaceted, including absence of a formal U.S. infrastructure for evaluating foreign credentials. Other countries have moved to address this systematically. For example, Germany's 2012 Federal Recognition Act made it easier for immigrants to have their credentials recognized, including by giving them a legal right to have qualifications examined for equivalence. Lifting these institutional barriers was found to have led to a 15 percent increase in the share of non-EU immigrants with a recognized foreign qualification and a nearly 19 percent increase in their employment in licensed occupations.15

Elsewhere, Canada's Foreign Credential Recognition Program funds provincial and territorial governments and organizations to support credential recognition, although a formal program evaluation found its ability to contribute to systemic change was somewhat limited by the decentralized structure of professional licensing, wherein provinces and territories control credentialing decisions rather than the federal government.16

In the United States, state policymakers have increasingly recognized the role of immigrant and refugee workers, particularly in sectors experiencing labor shortages, and sought to promote workforce inclusion. In 2023, for instance, 15 states enacted reforms related to expanding access to occupational licensing, creating pathways to workforce inclusion, and establishing state offices to coordinate immigrant and refugee integration.17 Advocates have called for expanding and connecting these types of state-level efforts to resettlement agencies’ processes, while also developing a federal framework for assessing credentials.

Microloan and credit-building programs tailored to refugees have existed in some forms, however prominent examples have been discontinued. The federal Office of Refugee Resettlement’s (ORR) Refugee Microenterprise Development Program previously offered loans of up to $15,000 for small businesses and up to $1,500 for credit building;18 however, the program is no longer being funded. Support for entrepreneurship and small-business development could expand economic opportunities for refugees, particularly when structural barriers—such as the nonrecognition of foreign degrees, credentials, or prior skills—limit access to employment.

A Focus on English Proficiency

Another structural barrier for refugees’ economic integration is limited proficiency in English, which has been consistently linked to higher poverty and restricted access to quality employment.19 Advocates have described English proficiency as often overemphasized by employers and used as a proxy for qualification, even when a job may not require a high level of proficiency. Those with limited English proficiency are more likely to experience poverty, economic exclusion, and restricted access to quality employment.

Treating English proficiency as the primary measure of employability often overlooks refugees’ existing skills and experience. Access to English-language classes can also be challenging due to limited availability and mismatches between available programs and refugees’ scheduling and learning needs.20 Moreover, the pressure to secure rapid employment can limit refugees’ ability to invest in language learning. Indeed, data show that enrollment in English classes declines substantially after refugees’ second year in the United States and does not produce immediate wage gains for those already employed.21

Cost of Transportation and Care

Transportation barriers and the high cost of child care and elder care further limit recent refugees’ access to meaningful employment as well as training programs, English classes, health care, and other services needed for long-term economic mobility. Many refugees arrive without a credit history or substantial savings, which can make purchasing a vehicle unattainable, while often being resettled in communities with limited or unreliable public transportation. This situation is especially challenging for refugees who fled conflict, persecution, or human-rights abuses, and therefore may have had little time to prepare and limited ability to liquidate assets or retrieve belongings left behind. For instance, nearly one in five refugees surveyed in the 2023 Annual Survey of Refugees reported lack of transportation was a barrier to receiving medical care.22

Meanwhile, many refugee families arrive with young family members—43 percent of the more than 100,000 refugees resettled in FY 2024 were under age 1823—making child care critical. In the 2023 Annual Survey of Refugees, 56 percent of women who were not participating in the labor force cited child-care responsibilities as a reason for their nonparticipation.24 The federal Refugee Support Services program fund, which is focused on employment and job placement, could be used to address child care and other barriers to employment, but administration varies from state to state and services are not always available.25

This dynamic forces families to make difficult trade-offs. In many households, women are left with few options but to provide unpaid care for children or other family members, while men carry the burden of being sole wage earners. This dynamic can reinforce gendered economic exclusion and keep refugee families in cycles of poverty even if they are strongly motivated to work and rebuild their lives.

Beyond Self-Sufficiency

The U.S. resettlement system defines success primarily as achieving self-sufficiency, which has come to mean obtaining employment as quickly as possible. This approach risks overlooking the persistent and overlapping structural barriers that systematically push recently arrived refugees into poverty. Employment alone is not economic integration. Alternative models designed to support long-term integration might instead prioritize the ability to earn a stable income, move within one’s career, have credentials recognized, acquire proficiency in English, and obtain affordable transportation and child care.

A multidimensional perspective on refugees’ economic integration could be helpful in this regard. Measuring success not only by whether refugees are working but by whether they have access to the resources, opportunities, and conditions needed to move out of poverty and build stable lives would lead to a more holistic picture. Income-based or employment-only metrics may, for instance, miss the steady increase in refugee multidimensional poverty that occurred between 2015 and 2020. Broadening the perspective may also highlight the specific domains in which more support is needed, which could allow policymakers and nongovernmental organizations to target their work.

One challenge with ascertaining the full picture, however, is the limited amount of information about refugees’ well-being over time. The Annual Survey of Refugees provides valuable data on early resettlement outcomes, but it is cross-sectional and limited to the first five years after arrival. As a result, it leaves long-term integration outcomes to often be assessed indirectly using proxy indicators to identify refugee-like populations within national datasets. Tracking the outcomes in refugee households for longer periods would provide evidence to assess whether the system is achieving genuine integration and course correct if needed.

At a policy level, advocates have floated the idea of workplace-integrated English programs to allow refugees to build language skills without sacrificing income. Employers might also consider reducing their reliance on English proficiency as a blanket hiring requirement for jobs where it is not operationally necessary.

As migration policies, including those affecting refugees, have become increasingly restrictive and limit access to benefits, they likely have increased the pressure that pushes refugees into any available job, rather than the one most likely to ensure sustainable employment over the long term. Instead of being uplifting, these types of policies prioritize a narrow vision of self-sufficiency and help perpetuate the structural barriers that keep recently resettled refugees in poverty.

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