Creating Inclusive Urban Economies for Migrants and Refugees

Executive Summary

As cities around the world welcome more migrants and displaced people, supporting their economic inclusion can help determine whether local economies stall or grow. Immigrants make up increasing shares of the workforce in many cities, yet more work is needed to unlock their ability to fully contribute. In some places, opening basic pathways out of informal, low-paid, or unsafe work is the priority, while in others, it is tapping into underused talent or supporting entrepreneurship that drives local growth. Cities are negotiating this challenge of building inclusive economies while also grappling with the green and digital transitions, housing and infrastructure pressures, and changes in the world of work.

The building blocks of economic inclusion are well documented: secure status and work authorization, destination-country language skills, access to training and upskilling, and recognition of foreign qualifications. Importantly, addressing barriers to inclusion is both good for newcomers and strengthens urban economies. Allowing migrants to work in jobs that match their skills and helping them leave the informal economy can boost economic growth significantly. But few cities can achieve economic inclusion on their own. National governments control most migration and labor policy, cities face financial constraints, and political debates are often polarized. The central question therefore is not what a perfect model looks like but how cities can use political capital and existing resources to make meaningful progress—and what each should prioritize, given different goals and constraints.

Rapid change, shrinking budgets, and heightened sensitivity to investing in newcomers at a time when native-born residents also face challenges require cities to invest surgically and strategically. City leaders and their partners should consider three principles when investing in economic inclusion:

Enable labor market advancement, not just entry. Cities should approach economic inclusion as an ongoing process that requires repeated, targeted investments rather than one-off interventions. More city programs should emphasize connecting newcomers to high-quality, stable jobs over time instead of treating the first job as the end goal. Meanwhile, supporting migrants and refugees who pursue viable and sustainable entrepreneurship rather than subsistence activities can facilitate economic inclusion while also generating jobs and economic benefits for local communities.

Align employment opportunities with high-growth sectors and those facing labor shortages. Cities cannot invest expansively across the entire job-readiness continuum, so leaders will need to prioritize according to their most pressing economic and societal goals and adapt as needs change. For instance, some cities may opt to build targeted upskilling programs that respond directly to local labor shortages or priorities such as the green economy, while others may prioritize moving vulnerable workers out of low-wage, precarious, or unsafe jobs.

Prioritize win-win employment and entrepreneurship measures that benefit both newcomers and long-term residents. City leaders should be attuned not just to what policies are technically feasible but also to which can garner broad support and avoid backlash. This often means embedding economic inclusion into broader city priorities, such as filling local labor needs in the green and digital transitions, infrastructure, and care systems. Many high-impact interventions that connect newcomers to opportunity may in fact be nestled within mainstream programs available to all residents, including ancillary supports such as child care and housing assistance that indirectly affect economic participation and that, as core services, often have more stable funding than migrant- or refugee-specific programs.

To advance these principles, city leaders should consider the following high-impact, practical, and politically feasible actions:

1. Set the agenda and the tone. At a moment of heightened polarization around immigration, city leaders’ ability to define and advocate for economic inclusion as a local priority can be a powerful lever. Welcoming infrastructure, the rhetoric of top officials, and including immigrants and refugees in long-term city planning can create enabling conditions for economic inclusion, even if other barriers remain.
2. Break down siloes. Cities can centralize existing programs and address integration as a comprehensive policy area rather than a distinct intervention. In Cuenca, Ecuador, for example, a representative of a nongovernmental organization noted that one-time seed grants for entrepreneurs may be insufficient to catalyze business growth without additional investments in wraparound services that connect newcomers to support networks and child care. Some cities have created dedicated offices or coordinators for migrant and refugee inclusion, while others have strengthened coordination across employment, housing, education, and planning portfolios.
3. Leverage usable data in new ways. Most local data on newcomers’ economic inclusion are fragmented and imperfect, but cities may be able to pool together existing administrative data sources rather than build new data collection capacity. For example, identifying key indicators and combining data from different agencies—such as employment services, business registration databases, and housing and social programs—can build a clearer picture of how migrants and refugees participate in labor markets and where barriers are. Where possible, cities should also invest in tracking the outcomes of their programming over time; otherwise, policymakers may lack information on key issues such as job quality, retention, and income progression, evidence that can make the case for funding promising initiatives.
4. Use innovative financing to do more with less. Pooled funding and matching programs that blend public and private resources are a promising route to sustaining and scaling economic inclusion programs. A soon-to-be-launched pilot in Mexico demonstrates one such creative financing approach. This pooled fund is being designed to draw from philanthropy, employers, and multilateral banks to support migrant economic inclusion.
5. Include diverse community voices in program design and implementation. City leaders should draw on the expertise of nongovernmental partners and migrant and refugee communities to ensure that economic inclusion programs reflect real barriers and opportunities in local economies. Co-design processes, advisory boards, and joint working groups can collect these insights at an early stage and help obtain buy-in for economic inclusion goals among key constituencies.
6. Plan for future labor market needs, not the status quo. Technological advancements are reshaping the types of jobs available in cities, which means city authorities will need to build flexible systems that adapt to changing needs rather than building infrastructure based on today’s barriers and opportunities. For instance, city-level employment services may need to help displaced workers from multiple sectors reenter the workforce while also helping immigrant and local jobseekers build skills (such as proficiency in using artificial intelligence).
7. Appeal to a diverse coalition of stakeholders to make the practical case for inclusion. Scaling successful initiatives depends as much on getting political and public buy-in as on technical solutions. Cities that demonstrate tangible returns for local communities—such as filling local skills gaps, expanding the tax base, or helping create more sustainable infrastructure—are more likely to secure broader buy-in, attract investment, and make initiatives more sustainable.

Cities hold powerful policy levers: they can set the agenda, convene key partners, control a set of core services, and enforce local regulations. However, they also face hard limits on funding, time, and decision-making authority. Economic inclusion thus requires creative thinking on how to link investments to desired outcomes, how to promote coordination and realize economies of scale, and how to capture and share promising practices and success stories. By focusing on what is achievable, sequencing reforms, and aligning inclusion measures with broader economic and urban priorities, cities can transform familiar principles into tangible progress to ensure that migrants and refugees contribute to urban economies’ adaptation and shared prosperity for all residents.

1 Introduction: What Roles Do Migrants and Refugees Play in Urban Economies?

More than half of the world’s population and the majority of international migrants and refugees live in cities.1 Cities are magnets for innovation, job creation, and economic growth, by one estimate generating 80 percent of global gross domestic product (GDP).2 Migrants and refugees can contribute significantly to urban economies by filling labor shortages, starting businesses, paying taxes, and increasing consumer spending.3 But persistent barriers to accessing quality employment and entrepreneurship can limit their contributions, thus leaving a key avenue to growth and revenue on the table for cities.4 Ensuring that all urban residents, including migrants and refugees, can participate fully in local economies will be key to sustaining economic dynamism and growth in the decades ahead.

"Ensuring that all urban residents, including migrants and refugees, can participate fully in local economies will be key to sustaining economic dynamism and growth in the decades ahead."

While immigration and labor market policies are typically set at the national level, economic inclusion unfolds at the local level. Cities decide how to build welcoming infrastructure and connect new arrivals to economic opportunities, from education and training to job placement and entrepreneurship support. However, their ability to act varies widely. Some cities have broad mandates to design and deliver services but have limited fiscal autonomy, particularly where national and local priorities for immigration and integration diverge. And in low- and middle-income settings, local budgets for inclusion efforts may depend on humanitarian and development aid budgets that have faced cuts in recent years. Creating the conditions for successful economic inclusion requires understanding the local context and the policy, political, and budgetary constraints cities must navigate.

This task comes at a defining moment for cities. Demographic change combined with rapid urbanization is driving growth in some cities, adding pressure on local labor markets, infrastructure, and housing, while other cities face population decline and shrinking tax bases. Climate change compounds these challenges by driving rural-urban movement in unpredictable ways and increasing climate risks for urban communities receiving new arrivals. Meanwhile, the green and digital transitions are driving demand for qualified workers and underscore the importance of tapping the skills and experience of foreign-trained residents, though the pace of change also creates uncertainty. For example, as the digital transition reshapes what jobs are available and where they are located, cities must plan future municipal budgets with very different workforce scenarios in mind.

This report draws on a global review and consultations with city officials, civil-society actors, and migrants and refugees across multiple cities and regions, selected in order to fill knowledge gaps and highlight a range of local experiences in supporting urban economic inclusion for migrants and refugees.5 It examines how cities can mobilize their resources to help migrants and refugees overcome persistent barriers to employment and entrepreneurship and, in doing so, lay the groundwork for strengthening their contributions to economic growth and productivity in the decades ahead. Recommended strategies focus on moving beyond entry-level jobs, informality, and “necessity” entrepreneurship to promote durable inclusion, including by filling critical data gaps, creatively harnessing existing policy tools, and developing innovative city-led programs that help migrants and refugees tap into sustainable economic growth opportunities.

2 Barriers to Economic Inclusion

Migrants and refugees play a critical role in bolstering urban workforces and driving innovation and economic dynamism in cities around the world. But newcomers often encounter legal, practical, and social barriers that limit their access to quality employment or entrepreneurship opportunities, despite significant investments by some cities in bridging these gaps.

The legal right to work remains a principal barrier. Some migrants and refugees face legal restrictions on whether or where they can work. In Ecuador, for example, short renewal periods for legal status and changes in national migration policies have left some Venezuelan migrants in legal limbo. Migration Policy Institute (MPI) consultations in Cuenca, Ecuador, highlighted how this situation can result in fines for unauthorized work and prevent newcomers from registering their businesses.6 Over time, migrants and refugees may also cycle in and out of legal status. For example, workers from Myanmar often enter Thailand through informal recruitment channels before later applying to regularize their status. In Chiang Mai, a civil-society representative also discussed how migrant workers from Myanmar were only allowed to work in unskilled jobs in certain industries, such as agriculture, construction, domestic work, manufacturing, and services.7

Even where migrants and refugees have the right to work, they can face steep hurdles to employment, including:

• Language barriers. Lack of proficiency in the destination or host country’s language can impede successful economic inclusion and prevent workers at all skill levels from reaching their full employment potential. In Chiang Mai, for example, the civil-society representative noted that younger migrants who learn Thai have more economic opportunities than older generations without Thai language skills.8 Indeed, studies from various national contexts indicate that more advanced destination-country language skills are associated with higher employment rates, less underemployment, and higher earnings.9
• Validating credentials. In some regulated professions, getting foreign credentials recognized may entail steep costs or additional language requirements, which can exclude migrants and refugees from their professions. In Gdańsk, Poland, a government official noted that the costs of credential recognition and a requirement to speak fluent Polish can prevent foreign-trained professionals from working in their chosen fields, even where gaping labor shortages exist (for example, teaching) and push them instead into lower-barrier industries such as construction and logistics.10
• Skills mismatch. Migrants and refugees sometimes arrive with skills and experience that do not match local needs or demand, potentially requiring more extensive training or upskilling as a result. The same can be true for returning nationals who seek to reenter the local labor force after a period spent working in another country. For example, a government official in Quezon City, the Philippines, noted that most job openings are in the information and communications technology and business process outsourcing industries, while nationals returning after working overseas typically have experience in construction and domestic work.11 Skillsets can also intersect with migrant and refugee identity and culture; for example, a UN representative explained that trade is central to the identity and livelihoods of refugees in Ethiopia’s Somali Region, which could discourage refugees from setting their traditions aside to take up employment in agriculture.12 Finding local employment may thus require more extensive and culturally sensitive upskilling or retraining strategies.
• Lack of local networks. Access to local social and professional networks can open doors to employment, particularly in settings where personal connections are highly valued. For example, in Ethiopia, Somali refugees in Jijiga, a city within the Somali Region, have achieved greater integration than those in other parts of the country, including Gambella, because they could draw on traditional systems and shared linguistic, cultural, and religious customs to access employment opportunities.13 Discrimination and stigma can also significantly affect access to economic opportunities.

While investing in these areas requires significant resources, doing so can reap significant returns. Newcomers working in roles commensurate with their skills and experience (rather than in jobs for which they are overqualified or in the informal labor market) have higher earning potential and more opportunities, and this has knock-on effects for their local community. Although jobs with few qualification or experience requirements can provide easier entry points for migrants and refugees, their lower wages and sometimes precarious nature (particularly in the gig economy) should make them more of a stepping stone than a final destination, especially for workers with many productive working years ahead.14 Across Organization for Economic Cooperation and Development (OECD) countries, immigrants on average have higher employment rates than the native born, but earn significantly less, in part a reflection of their concentration in low-wage sectors and roles.15 The earnings gap between immigrants and the native born narrows gradually as immigrants move into higher-paying sectors and roles, illustrating the importance of promoting job mobility and quality employment in addition to labor market entry.16 Meanwhile, a study by the OECD and International Labor Organization (ILO) examining immigrants’ contributions to the economies of ten developing countries explicitly connects these economic benefits to the quality of their labor market integration.17

Addressing underemployment not only improves individual outcomes but also provides societal benefits. Unlocking newcomers’ productivity can boost GDP. In the United States, estimates suggest that underemployment among college-educated immigrants resulted in USD 39 billion in forgone wages and more than USD 10 billion in lost tax revenue for federal, state, and local governments as of 2016.18 This underuse of local workforces represents a missed opportunity for cities, particularly those grappling with skills shortages, aging populations, and shrinking fiscal bases. In lower- and middle-income countries that host the largest shares of the world’s migrants and refugees, the right policies could unlock billions for urban economies.

"Addressing underemployment not only improves individual outcomes but also provides societal benefits."

Informal employment is another important dimension of economic inclusion. Globally, about 2 billion people work in the informal economy, which accounts for a significant share of total employment in many low-income countries.19 For migrants and refugees, informal work may be the only option when legal or practical barriers block access to the formal labor market. While informal work can provide an economic lifeline for otherwise excluded groups, it typically involves lower earnings, fewer protections, and greater risks of exploitation. It also has consequences for cities, as informal employment can reduce tax receipts from workers and the businesses that employ them. Expanding access to the formal labor market can result in greater labor market participation, higher rates of formal entrepreneurship, and improved financial stability—all of which can translate into higher tax revenues and spending in local economies.20

Finally, entrepreneurship can be both an economic opportunity and a response to exclusion. Migrants and refugees are often overrepresented among entrepreneurs: for example, across two-thirds of OECD countries, immigrants are more likely to be self-employed than the native born.21 Migrant and refugee entrepreneurship can drive job creation and contributed to 15 percent of employment growth across OECD countries between 2011 and 2021.22 However, the broader literature on this topic as well as interviewed government officials and civil-society representatives caution that migrants and refugees may turn to entrepreneurship because job markets are inaccessible.23 This points to the importance of distinguishing between opportunity-driven and necessity-driven entrepreneurship.24 Access to entrepreneurship thus should be examined alongside access to paid employment.

At the same time, there are documented barriers that can prevent migrants and refugees from pursuing opportunity entrepreneurship or scaling sustainable businesses. Common barriers include limited destination-country language skills, lack of access to credit and capital or traditional collateral for loans, and difficulty navigating local requirements such as obtaining licenses and permits and paying taxes.25 Limited access to information and participation in local business networks can also hold back immigrant entrepreneurs and thus limit the benefits that successful businesses bring to local economies.

To address these barriers, cities should consider three areas for intervention: filling data gaps to better target investments, using policy tools more holistically to support economic inclusion, and implementing promising practices to support access to employment and entrepreneurship. These will be discussed in the next three sections.

3 Closing Local Data Gaps

A clear economic case exists for promoting urban economic inclusion, but cities can struggle to access even basic data points on labor market participation, skills, and inclusion needs among their migrant and refugee residents. These gaps can be an obstacle to city-led efforts to support economic inclusion and to tap migrants’ and refugees’ potential within broader economic growth strategies.

Reliance on infrequent census counts, for example, can leave municipal budgets and infrastructure planning misaligned with current demographic realities, particularly in cities experiencing rapid population change. Limited understanding of local migrants’ specific needs—from language proficiency gaps to how legal status shapes access to services—hampers the design of targeted and effective initiatives. Finally, the absence of credible, localized data prevents cities from showcasing migrants’ and refugees’ economic contributions, which can help build public support for inclusive policies and counter misperceptions about migration at the local level.

Even when cities collect data, they often measure access rather than outcomes, which gives policymakers an incomplete or skewed picture of where investments are needed the most. For example, rising program participation or completion rates do not show policymakers what they need to know: whether these programs are leading to improvements in job retention rates, employer and employee satisfaction, business longevity, and similar.26

However, a few bright spots stand out. Some city governments and their partners have developed more granular monitoring systems to track migrants’ economic outcomes.27 Other initiatives—including joint work by the Mayors Migration Council (MMC), C40 Cities, and the Climate Migration Council measuring urban green job shortages—map valuable data on city‑level labor shortages in target sectors and highlight opportunities for migrant workers to fill local labor gaps.28

Cities can take the following steps to generate better local insights on economic inclusion:

• Unlock underused data sources. Many cities already collect valuable data on migrants and refugees that provide insights into their economic inclusion (e.g., public employment service records, municipal services use, and business registration data), but local governments might not systematically gather, analyze, or share these data in a way that can inform policy. Local employment offices may use different indicators and definitions than housing or shelter providers, and agencies with different mandates may not share information regularly because of privacy laws. In Quezon City, for example, strict implementation of the data privacy act prevents officials from sharing raw data with personally identifying information, even within the same government.29 Combined with operational limitations, these restrictions can lead to information becoming fragmented. In Gdańsk, officials noted there is no national system for collecting data on immigrants at the local level, and that while the city can draw on data from different sources (e.g., educational institutions, insurance systems, and labor market statistics), these combined data remain fragmented, limited, and non-comprehensive.30 Cities can advocate for greater access to national data, including formal data-sharing frameworks, and promote better coordination of local and national data sources by establishing a dedicated team or centralized portal to share data.31
• Improve data literacy among officials who use these data. Municipal staff may need training to interpret and apply data on economic inclusion in their daily work, especially those in non-migration-related portfolios. Some initiatives provide platforms to use local economic or migration indicators, such as UN-Habitat’s Urban Inclusion Scoreboard or the Mixed Migration Centre’s 4Mi Cities project.32 Cities can also build data literacy directly. In the United States, Austin, Texas has the Data Impact Visuals and Exploration platform, which offers tools and workshops to help city officials and the public access and use city-level data, including for internal operations and decision-making about policy and resource allocation, although sustaining funding for the initiative has proved challenging.33
• Expand data collection and analysis capabilities, including through partnerships with nongovernment actors. Many cities—particularly in resource-constrained environments—partner with nongovernmental actors to fill information gaps and build data collection capacity. In Kenya, the Nairobi City County government established a citywide coordination mechanism to work with international and local nongovernmental organizations directly on data sharing and referrals.34 Beyond international actors, municipalities also partner with local academic institutions and civil-society organizations to conduct targeted needs assessments, an approach likely to gain importance as international funding tightens. In Cuenca, an interviewed representative of an international nongovernmental organization cited collaborations with universities, foundations, and organizations such as Cáritas Ecuador to collect data on the vulnerabilities and needs of migrants and internally displaced people in the region.35 As cities invest in external partnerships, ensuring robust privacy and data protection safeguards is critical, especially for smaller municipalities handling sensitive information and for improving trust with populations underrepresented in official data (such as those without legal status).36
• Monitor economic impact. A small but growing number of actors are experimenting with approaches to track how inclusion programs affect migrant and refugee economic outcomes over time. In Nairobi and in Kampala, Uganda, the Refugees in East Africa: Boosting Urban Innovations for Livelihoods Development (Re:BUiLD) project conducted randomized controlled trials and found that cash grants to refugee entrepreneurs were generally more cost-effective and produced better business outcomes than mentorship—an actionable policy insight.37 Though costly, highly targeted studies like this can provide much-needed granular evidence on what works for specific populations and contexts. In Ecuador, the Entrepreneurship and Innovation Agency uses indices from the Latin American Intelligent Ecosystems Group to assess conditions that enable dynamic businesses, including migrant-owned firms, to scale—another way to collect valuable data on what works to drive entrepreneurship.38

These approaches point to concrete steps cities can take, particularly in resource-constrained environments, to optimize and better use existing systems rather than creating new ones. In the short term, cities can use low-cost, common-sense strategies to fill data gaps by building partnerships and strengthening collaboration across government and between agencies. Over time, cities should advocate for the inclusion of more granular migration and inclusion indicators in national surveys and censuses (e.g., to make possible finer disaggregation of data by migrant background, duration of stay, country of origin, and legal status).

4 City-Level Infrastructure and Responsibilities for Supporting Economic Inclusion

Cities hold only some of the policy levers for supporting economic inclusion. National governments typically decide admissions policies and labor market access, for example, and national or regional authorities often lead integration programming. But cities can support economic inclusion through their broader employment, education and training, and entrepreneurship support services as well as by designing and coordinating local integration measures targeting migrant and refugee populations specifically. While cities’ legal mandates and responsibilities around economic inclusion vary widely, their activities broadly fall into several categories: advocacy and agenda-setting, service provision, coordination, and funding and financial levers.

A. Advocacy and Agenda-Setting

Even when cities have limited legal mandates for areas such as issuing work permits, they can advocate for relevant policy reforms at the national or regional levels, such as expanding work authorization or making it easier for noncitizens to access credit, and more generally make the case locally for economic inclusion.39 For example, member cities of the United States Conference of Mayors have advocated in recent years for more local input on admission decisions, faster work authorization for newly arrived asylum seekers, and recalibrating immigration enforcement to reduce its impacts on local communities and economies.40 And while local governments also cannot lift restrictions on starting businesses or change credit access requirements, for example, they can advocate for these changes with national counterparts and financial actors and adapt business support programs and economic development strategies so that migrant and refugee entrepreneurs can benefit if those changes occur.

Cities can create dedicated policies or strategies that articulate a local vision for economic inclusion and serve as a blueprint for coordinating services. For example, Aurora, Colorado, developed an immigrant integration plan for 2020–30 to guide the work of its Office of International and Immigrant Affairs. The plan sets goals and metrics in 12 different areas, including several actions linked to economic inclusion, such as promoting immigrant entrepreneurship, providing job skills and certifications, and expanding English language instruction.41 Even in settings with highly centralized responsibilities for migration and immigrant integration, city-level policies can help organize and publicize available services and promote economic inclusion as a local priority. For example, in Upala, Costa Rica (a small border town near the Nicaraguan border), local authorities developed a human mobility policy that includes measures on economic inclusion, such as helping immigrants access public employment services and encouraging employers to hire those with legal status. Cities can also signal commitment to immigrant integration by establishing dedicated teams or offices for these issues. For example, a growing number of U.S. cities have dedicated offices for immigrant integration that promote integration priorities and improve coordination across city agencies and with noncity partners.42

B. Mainstream Services

Cities can provide job placement services, education and training (including destination-country language instruction), and entrepreneurship support directly through mainstream services available to all residents, along with support in areas such as child care and housing that affect economic participation indirectly. For example, Gdańsk’s labor agency provides dedicated support to migrants, refugees, and other residents on preparing their résumés and job applications. The agency also offers workshops and webinars on building the soft skills needed to apply for jobs and go through interview processes. As frontline actors, cities can test programs that can adapt to fast-moving local needs.

Much of this programming is open to all residents and might not necessarily be identified as an economic inclusion intervention. For example, cities in Latin America have focused on structural issues that affect displaced Venezuelans and local residents alike, such as underemployment, labor informality, and widespread poverty.43 As more cities introduce programming intended explicitly to support the economic inclusion of migrant and refugee communities (discussed in Section 5), mainstream services can reduce costs and avoid singling out specific groups for dedicated resources, which can create resentment and perceived competition between groups. For example, Chicago has moved toward a unified shelter system for migrants and locals following criticism that newcomers were being prioritized over marginalized locals.44

A mainstreamed approach can create economies of scale but will work only if services are accessible and responsive to immigrants’ needs. In some contexts, that responsiveness may include translation services or extra support in navigating new systems. For example, Chicago offers some targeted employment programs, such as the Heartland Human Care Services’ Refugee and Immigrant Community Services program, alongside helping migrants and refugees access mainstream workforce development and entrepreneurship programming.45 Targeted services are especially helpful for new arrivals, who may need specialized support to understand and access unfamiliar systems or address challenges related to their migration or displacement journey. But over time, improving systems that all residents can access may be a more sustainable approach than stand-alone programs, which can be more vulnerable to political or funding shifts.

C. Coordination

Cities can play an important coordination role, either formally or informally. Some cities have established dedicated integration teams or stand-alone offices to coordinate services and programming, often with their own budget line. For example, Bogotá, Colombia, is creating a dedicated migration office with an allocated budget, and government officials in Quezon City have advocated for separating the migration services unit from the public employment service office to create an independent office with its own budget for migration-related programming.46

Cities can also create processes that include civil society and migrant and refugee voices in policy decisions to better represent affected communities. For example, Quezon City established the Migration Development Council that helps civil-society organizations provide input on the economic reintegration of returnees and other issues. Gdańsk has created an advisory board for people with a migrant background to advise the mayor and local authorities on immigrant integration issues and policies—an example of how to involve migrants and refugees in both program design and implementation.47 Incorporating insights from people with lived experience of economic inclusion into policy decisions, particularly in a more institutionalized format, can improve effectiveness. But results depend on how regularly cities use these consultative mechanisms and how much influence they have on city policymaking, as well as on whether such participatory approaches are adequately resourced to facilitate engagement and to compensate participants for their time.48

A growing number of cities now offer one-stop shops that bring together integration services and supports typically provided by different departments and agencies (see Box 2). Instead of interacting with multiple systems and service providers, immigrants can access economic inclusion services and other integration-related supports in one place. Assessments suggest that this approach can be cost-effective and may move migrants and refugees into the labor market more quickly, particularly when delivered as part of an early intervention. However, evaluations have not rigorously measured the impacts of these services on labor market outcomes such as quality of employment.49

D. Funding and Financial Levers

Most city-level inclusion efforts draw on a combination of municipal revenues, donor funding, and external financing, though funding sources vary across contexts.50 In high-income countries, cities often access a more diversified set of funding sources, including own-source revenues, international grants, philanthropy, and public-private partnerships. By contrast, municipalities in low- and middle-income countries tend to rely more on project-based funding and donor support, which is often short-term, highly competitive, and subject to sudden withdrawal—U.S. aid cuts, for example, have forced many organizations to close offices or reduce services sharply. Locally generated revenue streams are more sustainable and adaptable to local needs, but cities may not be able to access them where municipal budgets face increasing strain.

Considering future stability, cities can explore funding models that address budgetary shortfalls and support program expansion. Government and civil-society representatives consulted for this project frequently cited a lack of sustainable funding. In Kanifing, for example, a representative of a civil-society organization noted that even when external funding is available to pilot new projects, cities face challenges in determining how to transition from short-term projects to system-based support.51 Even in high-income settings, uncertainty about federal funding has prompted U.S. cities such as St. Louis to explore ways to augment budgets with private and philanthropic funding.52

Pooled funding and matching programs that blend public and private resources are a promising approach to sustaining and scaling economic inclusion programs. In Mexico, a pioneering pooled fund will mobilize philanthropic capital, employer contributions, and multilateral bank resources to support migrant integration and economic inclusion.53 The pilot will be launched in July 2026 in Mexico City, Nuevo Leon, and Jalisco, with plans to expand to other cities if successful. In Brazil, several cities use a trust fund model to raise capital for city programs, with state, municipal, and private-sector actors contributing jointly. These funds support projects such as building climate-resilient water and sanitation infrastructure in Campinas, Fortaleza, Maracanaú, and Pacoti; low-carbon urban mobility in Belo Horizonte; and sustainable waste management in Curitiba (landfill-gas-to-energy projects).54 These sustainable financing mechanisms could help mobilize more funds for projects with clear economic returns that attract investors.

5 Identifying High-Impact City-Led Interventions

Cities can support migrants and refugees directly in accessing more stable and durable career pathways through economic inclusion services. But deciding what to invest in and how to achieve the greatest impact depends on context. Local labor market structures, the strength and dynamism of the entrepreneurial ecosystem, and how migrants and refugees access work all shape what is feasible and where investment returns are highest. For instance, programs that succeed in high-income cities might not translate to cities in low-income countries. The Re:BUiLD livelihood program shows that even between two somewhat similar urban settings, the same model can benefit new business owners in one setting (Nairobi) but can increase profits for already moderately profitable businesses in another (Kampala).55

Identifying and understanding the motivations and constraints of migrants and refugees is critical when designing interventions. In contexts where migrants and refugees pursue entrepreneurship out of necessity rather than opportunity, or where the entrepreneurial landscape is weak, a strong case exists for focusing first on lowering barriers to employment and improving job quality. In such contexts, launching a series of small-scale entrepreneurship programs might generate limited returns for participants and minimal contributions to the local economy. The key question is not whether to promote either employment or entrepreneurship but how to design market-oriented interventions that align with local demand and provide migrants and refugees with realistic pathways to improve their livelihoods.

A. Employment

Employer-Employee Matching Services

Local networks are critical to successful labor market entry, and city-led matching services can broker connections between employers and workers and help level the playing field for newcomers with sought-after skills. In Monterrey, Mexico, for example, the Secretariat of Equality and Inclusion conducts inclusion fairs and sets up booths that bring together state and federal agencies and businesses offering job opportunities and other services such as health, education, and identity documentation. Since 2022, the fairs have served more than 20,000 migrants, refugees, returnees, and displaced persons, speaking to the demand for these services.56 Cities can also help newcomers understand what opportunities are available locally and what the requirements may be. For example, Barranquilla, Colombia is using funding from the MMC’s Global Cities Fund for Migrants and Refugees (GCF), described in Box 3, to expand its Opportunities Center to identify job vacancies and required skills among nearly 200 potential employers and to provide migrants with specialized vocational training and connections to those employers.57 Critically, cities can also use these platforms to connect jobseekers with vacancies in sectors facing labor shortages or those with projected growth in demand. In northern Italy, where officials estimate a need for nearly 50,000 migrant workers in the Piedmont and Valle d’Aosta regions to address demographic decline, Turin is using GCF funding to match local employers with refugees in Uganda to fill vacancies in critical sectors—a notable step further, as this would represent a city-led labor mobility pathway.58

Investing in matching services and mentoring can greatly aid labor market outcomes. For example, a 2020 evaluation of the Toronto Region Immigrant Employment Council’s mentoring partnership found that participants were twice as likely to find quality employment after the three-month mentoring commitment.59 In some cases, cities may bundle employment services with other supports that affect inclusion, such as upskilling programs (discussed below) or subsidized or free child care to enable parents to find work or attend courses.60 For example, Vienna’s StartWien Hub provides integration services (including German language and literacy classes) and counselling for new arrivals, and offers free child care for immigrant women who are taking courses there.61 However, more work can be done to track migrant outcomes after participating in different employment initiatives. Few cities collect or publish data on job quality, retention, or income progression, which makes it difficult to assess whether they improve economic inclusion in the medium and long term and to compare cost-effectiveness with less intensive models.

Effective matching also involves providing guidance for employers on avoiding hiring processes and job requirements that exclude immigrants unintentionally. For example, requiring local work experience can exclude new arrivals, and employers could find other ways to assess whether a candidate is qualified for a role. For example, career services increasingly use competency tests to capture the skills of nontraditional candidates, although city authorities should coordinate these efforts with employers to ensure that tests align with hiring needs and that employers understand and trust the results.

Some cities also support credential recognition processes, which can assist in effective matching, especially in highly regulated labor markets. Berlin, Germany, established a website for professionals with qualifications from other EU countries, Single Point of Contact Berlin, which provides information about how and where to apply and allows online applications.62 Official statistics show that in 2025, the platform processed almost 1,300 applications for foreign qualification recognition.63 Meanwhile, in Colombia, the city of Cali, with GCF support, is building a blockchain-powered, open-source digital employment system that will securely verify and document the skills and credentials of jobseekers (including migrant and returnees) for employers and connect participants with them directly.64

These digital tools can reduce bureaucratic barriers, but it is important to ensure local efforts do not duplicate national platforms. Berlin’s platform operates within a multilevel governance framework that includes federal and EU-level portals, which creates some information overlap.65 A key question is how cites can design user-friendly platforms that reduce administrative hurdles while being integrated with national databases, rather than creating parallel systems.

Upskilling Workers

Cities can help migrants and refugees bridge gaps in technical or soft skills by providing or funding training or referring them to opportunities run by civil-society or private-sector partners. Improving destination-country language skills, for example, can help migrant and refugee jobseekers become more competitive in local labor markets, leading to higher earnings and lower rates of underemployment.66 Examples of this programming include Istanbul Metropolitan Municipality’s Art and Vocational Training Courses, which offer free courses in digital and information technology skills and Turkish language training for Syrians and other refugees, and the GCF-funded First Steps in Milan project, which provides job readiness, job placement, and language courses to 250 caregivers of migrant and refugee children.67

These services can direct jobseekers to sectors with better job opportunities and which may be experiencing labor shortages. For example, the nonprofit Welcoming Center in Philadelphia uses donor support (including city grants) to provide immigrants with free English language instruction, training in digital skills and workplace communications, and career services tailored to specific industries in the city, such as health care and manufacturing.68 Participants in the center’s international professionals program, which is geared toward college-educated and English-language-proficient individuals, reported much higher rates of employment a year later.69 And Denver’s WorkReady Denver Program—a pilot program under the Denver Asylum Seekers Program—prepares asylum seekers for jobs in sectors facing labor shortages, such as hospitality, construction, health care, and green energy. The program combines mentoring, language and soft skills training, and vocational training with unpaid internships and job placement services.70

For cities, upskilling programs are an upfront investment that can yield long-term returns.71 Getting people into work and, crucially, putting them on a pathway to higher earnings can provide higher fiscal returns for local and national authorities alike, and underscores the benefit of ensuring that migrants and refugees can access these services.

Proactive investment in building the workforce in sectors projected to grow (such as clean energy and health care) or in helping workers develop essential skillsets such as digital literacy can yield long-term benefits for workers, employers, and cities. Such investments can also be a way for cities to connect economic inclusion with other city priorities, such as meeting green transition targets or adapting health-care services for aging populations. For example, Boston’s immigrant-led home-care cooperative aims to create higher-quality jobs and business ownership pathways for migrants, with GCF support, while addressing a shortage of qualified care workers for its aging population.72 Other cities receiving GCF funding have used green job initiatives to advance inclusion and meet climate resilience goals. Freetown, Sierra Leone, created its Climate Resilient Market Hub for migrant women and youth as part of its efforts to generate 120,000 decent green jobs by 2028. The hub introduces participants to waste-to-energy technology, cold-chain infrastructure, and approaches to reducing greenhouse gas emissions.73

Creating opportunities for teams made up of migrants and native-born residents to work together on livelihood projects can also strengthen social cohesion. These efforts can create conditions for positive contact between those groups, which is more natural and longer lasting than what voluntary or leisure-based social cohesion initiatives typically achieve. Projects that enable migrants to contribute to communities in visible ways, such as collecting trash for recycling, can also promote more positive narratives than digital information or messaging campaigns alone.

B. Entrepreneurship

Cities can help migrant and refugee entrepreneurs access the networks and services needed to establish businesses while addressing related barriers such as legal status and language. This programming serves several interconnected goals: improving access to entrepreneurship, enhancing business outcomes and sustainability, and supporting meaningful contributions to host communities. The premise is that, by supporting the establishment and growth of local businesses, these programs can aid the local economy by creating jobs and boosting tax revenue, although in practice, few of these programs are rigorously evaluated to assess these economic contributions or to track how participating entrepreneurs’ businesses fare over time.

Small Business Start-Up Support

Cities can play a critical role in helping newcomers navigate local requirements and norms for starting and running a business. Some cities have reduced barriers by expanding eligibility and directing foreign-born residents to entrepreneurship support services available to native-born residents, with targeted adaptations. For example, Chicago’s Welcoming Ordinance allows migrants and refugees to access city-run entrepreneurship resources and programs regardless of legal status, with guides translated into multiple languages. The city also established quarterly events for immigrant entrepreneurs that cover licensing, taxes, access to capital, and other issues. However, reporting suggests the city has decreased the focus on immigrant business owners.74 These mainstreamed models can reduce perceptions of preferential treatment, and because cities use existing programs, they can also improve cost-effective and financial sustainability.

In other settings, cities have consolidated specialized support and services to address barriers that early-stage migrant and refugee entrepreneurs face, such as language skills, legal requirements, and access to credit. For example, the Welcoming Center’s entrepreneurship program in Philadelphia offers an entrepreneurship program in English as well as Dari, Spanish, and Ukrainian.75 In Zurich, the organization Capacity runs an entrepreneurship program that offers non-European participants training and access to an incubator. The program helps them develop their business models and understand cantonal legal requirements before entering more mainstream support systems.76 Between 2016 and 2024, it supported 172 entrepreneurs and helped develop 93 businesses and nonprofits.77 The program’s founders have noted that relying on a patchwork of short-term external grants leads them to depend heavily on volunteers and limits their ability to plan for the long term and achieve sustained growth.78

Cities can combine specialized initiatives with outreach to groups at risk of informality. For example, Denver partners with the Rocky Mountain MicroFinance Institute in a pilot that rethinks enforcement-only approaches to informal entrepreneurship. Instead of issuing fines to Spanish-speaking entrepreneurs running unlicensed food businesses, the city uses inspections to refer them to the institute for resources and guidance on business licensing.79 Although it is too early to assess outcomes, this approach aims to help shift migrant-owned microenterprises into the formal economy, expand the tax base, and show how cities can address licensing, outreach, and tailored entrepreneurship services at the same time.

Taken together, these two models highlight trade-offs between breadth, depth, and sustainability. Mainstream approaches that open general services to migrants and refugees, with slight adaptations, are likely to reach larger numbers and are easier to sustain with city budgets, but they may overlook the specific and compounded challenges immigrant entrepreneurs face. Highly targeted services can provide intensive, tailored support at the idea stage, but they risk running out of funding before businesses become viable.80

In less-resourced settings, cities can also expand access to entrepreneurship by providing physical infrastructure, such as market spaces, that migrants, refugees, and other disadvantaged groups need. In Jijiga and surrounding migration corridors, a city-administered wholesale market offers young migrants access to business sheds, enabling them to trade and purchase goods at lower prices than when operating on the street.81 Kairouan, Tunisia, built an artisanal market and wooden market stalls through a partnership with Cities Alliance to provide selling space to migrant entrepreneurs.82 Access to market stalls can also provide a safer environment for self-employed migrants and refugees, especially in contexts with high levels of discrimination.

Along with training and infrastructure, some municipalities support access to capital through citywide programs or initiatives targeted to smaller groups such as migrants and refugees. For example, Cuenca established a savings fund for vulnerable populations, including immigrants, returnees, and internally displaced Ecuadorians, that combines financial literacy training with access to loans for viable and innovative business ideas.83 WE NYC, a New York City initiative supporting women entrepreneurs (with a focus on women of color and immigrant women), provides financial literacy and credit-building support as part of its programming, helping participants access USD 8.9 million in loans between 2015 and 2020.84 And in St. Louis, the Afghan Chamber of Commerce, with support from the International Institute of St. Louis, runs an entrepreneurship awards program that provides USD 15,000 in start-up funding to Afghan entrepreneurs and hosts award ceremonies at St. Louis City Hall.85 These examples show how cities can work with local partners to expand access to finance while prioritizing business proposals that can benefit local labor markets.

Promoting Long-Term Business Success

Most support for migrant and refugee entrepreneurs focuses on the start-up phase, which means that many entrepreneurs lose access to assistance just as they begin their ventures.86 However, a growing number of city-based initiatives are helping to fill this gap in growth-stage support, with the goal of making the businesses more sustainable, scalable, and profitable. Many such initiatives concentrate on training, individualized coaching, access to business networks, and incubation support.87

Evidence suggests that at the growth stage, foreign-born entrepreneurs benefit more from mainstream support services than from parallel programs designed solely for migrants and refugees, in contrast to the early idea stage.88 Building social capital and entrepreneurial networks can help migrants and refugees participate in the broader entrepreneurship ecosystem instead of being confined to small, isolated markets (such as ethnic enclaves) with low growth potential. While relying on co-ethnic customers and suppliers can be beneficial in the short term, it can inhibit business growth in the long term.89 For this reason, some programs focus deliberately on integrating foreign-born entrepreneurs into local supply chains and markets. Quito’s Economic Promotion Corporation (CONQUITO), the metropolitan agency for economic development, helps migrants gain social capital by building relationships with buyers, suppliers, and peer entrepreneurs so they can approach the market independently over time.90

Local business associations, such as chambers of commerce and industry, are key actors in embedding migrant and refugee business owners in local economies, for example, by including them in formal networking activities such as business-to-business matchmaking.91 Bogotá’s Migración Productiva connects migrant and refugee entrepreneurs to mainstream business networks through the Chamber of Commerce’s virtual platforms, such as BazzarBog (the chamber’s commercial showcase) and Negocia (a business-to-business platform that connects new suppliers with clients).92 The St. Louis Mosaic Project also connects immigrant entrepreneurs with at least four ethnic chambers of commerce in the city that offer programs and networking opportunities.93 Even though these efforts are small-scale and have limited outcome data, they show promise in helping to integrate migrant and refugee businesses into wider economic networks with greater growth potential, along with other interventions such as promoting business formalization in some contexts (see Box 4).

Business incubation support can help migrants and refugees establish viable, scalable projects that go beyond survival entrepreneurship. Cities increasingly recognize the force multiplier effect of partnerships with external stakeholders, especially as municipal budgets shrink. For example, in Montreuil, France, the L’incubateur de la Ruche program offers individualized mentoring and access to a network of experts in a shared space.94 The mayor’s office in Aurora, Colorado, partnered with Community Enterprise Development Services and the Community College of Aurora to create a year-long entrepreneurship training program that includes access to incubator space with computers, design equipment, meeting space, and other benefits.95 Kanifing’s municipality, with GCF support, is establishing a migrant resilience hub to provide business incubation support and seed funding to up to 40 young migrants and returnees.96 Through Denver’s partnership with the Rocky Mountain MicroFinance Institute, immigrants who are ready to launch or scale their businesses can access the institute’s Business Launch Boot Camp, which includes access to microloans of up to USD 3,500.97 These programs show how city leadership, working in partnership with specialized stakeholders, can give small groups of entrepreneurs access to capital, professional mentorship, and dedicated space that training programs alone rarely provide.

While these specialized incubation models provide needed holistic and one-on-one support, they face challenges in scaling and sustaining operations. Organizations that run incubators must often fundraise continuously, and the highly individualized mentorship and training they provide often relies on volunteers rather than paid staff.98 To extend limited resources, some incubators, such as the Capacity program in Zurich, do not have a dedicated space to convene beneficiaries and instead rely on partners to lend venues. With stronger and more stable funding, these partnership-based approaches could be valuable models for helping migrants and refugees grow and scale their businesses.

Training and mentoring for entrepreneurship can connect to other city economic priorities. For example, a government official in Quezon City reported providing training in sectors with strong demand, such as producing soap or dishwasher liquid from cooking oils, food processing, and garment or slippers production.99 In Cuenca, the municipality and other local partners are spearheading trainings in business administration, hospitality, and health sciences, along with general business training modules on branding and financial education.100 Also in Ecuador, the province of Azuay established an ecotourism project for Ecuadorian returnees to help them establish businesses in sectors such as plant nurseries, coffee harvesting and sales, and aromatic cacao production.101 By targeting specific industries, cities can fill market gaps and equip migrants and refugees with skills their communities demand the most.

Opportunities exist for skills exchange and entrepreneurial support to go both ways, benefiting migrants or refugees and local communities simultaneously. For example, in Greater Mafraq Municipality in Jordan, the city partnered with the United Nations Development Program and the nonprofit Business Development Center to run a program that recruited Syrian refugees to deliver training in agriculture, beauty and hairdressing, construction, food production, sewing, and embroidery with Jordanians and other Syrian refugees. The program also provided start-up grants and business coaching.102 It aimed to support business creation in priority sectors and promote social cohesion through exchange.

However, in interviews, government officials and civil-society representatives cautioned that the sustainability of migrant and refugee businesses and their ability to generate broader community benefits, including job creation, depend on market depth and migrants’ and refugees’ legal rights. A government official in Guadalajara noted that where migrants lack work permits, as is common in Mexico, entrepreneurship support could steer them to subsistence entrepreneurship.103 And in Cuenca, an interviewee warned that one-off seed grants may not be enough to help entrepreneurs who lack support networks and struggle to establish their business while covering expenses such as rent and child care.104 Addressing these factors may require cities to advocate for national labor inclusion reforms and to consider related supports to improve stability for entrepreneurs. Such measures may include facilitating access to regularization options to address issues related to legal status and providing financial literacy education and coaching to strengthen resilience.105

At the very least, cities can strengthen collaborative ties between actors in the entrepreneurship ecosystem and social and economic integration service providers. A mapping of entrepreneurship programs in ten European countries by Impact Hub and The Human Safety Net found that entrepreneurial support is broadly isolated from employment agencies and other integration and referral services. In some contexts, job centers are reluctant to refer potential migrant and refugee entrepreneurs to these programs.106 Greater coordination can help bring together the different supports needed to aid entrepreneurs, which may be split among different agencies and different levels of government.107 When cities use coordinated pathways to bridge these siloes, migrants and refugees are more likely to succeed and build businesses that contribute to cities’ economies.

6 Changing Priorities for Urban Economic Inclusion

While demographic trends reshape urban populations, the green and digital transitions are also transforming how cities work toward economic inclusion. As climate change accelerates, cities will see more people moving in from other parts of the country and from other countries in response to environmental degradation and extreme weather events. For example, a 2024 C40 Cities and MMC joint study projected that climate change may lead 8 million people to move internally to ten cities by 2050: Accra, Amman, Bogotá, Curitiba, Dhaka, Freetown, Karachi, Rio de Janeiro, Salvador, and São Paulo.108 City leaders will need to act quickly to help new arrivals enter local labor markets and ensure that climate migration and mitigation planning includes strategies for economic inclusion.

Creating smooth pathways into work and training for migrants and refugees can help cities address shortages in green jobs and avoid delays in progress toward green transition goals.109 Estimating future growth in green jobs is a very imprecise art, not least due to the challenge of agreeing on what exactly constitutes a “green job.”110 But it is clear that meeting green labor shortages in sectors such as construction, clean energy, engineering, transportation, and waste management can yield climate and economic dividends.111 Along with ensuring a greater focus on green jobs in existing matching and training services, cities should work with partners to address potential skills waste, particularly when foreign-trained workers must complete formal recognition procedures.112 This illustrates how economic inclusion can support other city priorities.

Technological advancements may also reshape the types of jobs available in cities, with far-reaching implications for how city authorities and their partners help different groups access employment. Little consensus exists about the pace and scale of the impact of artificial intelligence (AI) on jobs. Certain jobs that involve routine tasks are often discussed as at particular risk of automation, but companies’ growing adoption of AI tools also threatens entry-level white collar jobs.113 Along with these displacement effects, however, AI can increase productivity and help less-qualified workers perform more expert tasks in sectors such as health care, legal services, software development, and the creative industries.114 Because urban workers are more likely to encounter generative AI in their jobs than workers in non-urban areas, cities will be at the forefront of managing both the risks and opportunities.115 City-level employment services will need to help displaced workers reenter the workforce and support both immigrant and local jobseekers in building their AI skills.

The advent of AI, coupled with the increase in remote work, may also transform both the modalities and the goals of economic inclusion services. For example, AI-powered chatbots can provide information in multiple languages to users who lack destination-country language fluency and map jobseekers’ skills and experiences to identify potential career pathways, which could expand access significantly.116 In Europe, about half of public employment services now use AI in limited ways, such as using jobseeker data to match individuals with available services and career guidance.117 While digitalization can improve overall access, national and local authorities should maintain analog services for groups with lower use of internet-enabled devices and fewer digital literacy skills, such as older immigrants and refugees.118

The rise of remote work also opens up new employment opportunities, which can have a meaningful impact on smaller cities that may have fewer local job opportunities but offer lower living costs and higher quality of life. Some cities have capitalized on this trend. For example, Tulsa, Oklahoma had attracted more than 3,500 remote workers through its Tulsa Remote program as of late 2025, which offers a grant of USD 10,000 and tailored relocation services.119 In countries of first asylum, interest is growing in connecting refugees with online freelance work opportunities, especially where refugees cannot access local employment. However, digital infrastructure constraints may make these opportunities more feasible in cities than in camps. Ongoing challenges include making direct payments to refugees, ensuring oversight and safeguards against exploitative work practices, and addressing a gender gap in access to internet-enabled devices in low- and middle-income countries.120

7 Charting the Road Ahead: Investing in Inclusive Urban Economies

Many cities have embraced the goal of ensuring that all residents—including migrants and refugees—can access economic opportunities. Yet gaps persist, and critical opportunities remain untapped. Despite sustained investments in employment services and innovations in education and training, there remains a persistent wage gap between immigrant and native-born workers and pervasive underemployment of skilled immigrants.

As demographic changes, climate pressures, and technological shifts reshape local economies, economic inclusion can strengthen urban resilience that fuels long-term growth, fiscal stability, and social cohesion. Cities can unlock the skills of migrants and refugees by supporting credential recognition, skills assessment, and improved matching with employers, while linking upskilling and workforce development efforts to critical labor shortages. Cities can also provide resources to make entrepreneurship a viable option, not just a last resort, for migrants and refugees.

"Economic inclusion can strengthen urban resilience that fuels long-term growth, fiscal stability, and social cohesion."

The right configuration of interventions will differ by context, reflecting each city’s priorities, market constraints, and institutional capacities. Some cities may need to focus on expanding wage employment, while others may prioritize entrepreneurship or hybrid models that better align with migrant and refugee skills and local demands. Amid mounting fiscal pressures, cities will also need to explore different funding streams (including innovative financing opportunities) and partnerships to ensure these interventions are sustainable. The core task for city governments, donors, and implementing agencies is to identify and prioritize interventions that improve migrant and refugee economic outcomes and advance broader city priorities. To do this, city leaders and partners should keep three principles in mind:

1. Enable labor market advancement, not just entry. Economic inclusion does not stop at labor market entry or business creation but is an ongoing process. Cities can proactively invest in their new residents’ long-term success by helping migrant and refugee workers access quality employment with stable pay, social protections, and opportunities for career advancement and by supporting entrepreneurs with resources to help establish and grow their businesses. These efforts can generate economic rewards for both individuals and local communities. Economic inclusion should also connect to other city priorities, such as managing the green and digital transitions, adapting infrastructure and housing to population change, and promoting decent work. This approach requires strong coordination across city departments and agencies and the ability to communicate the benefits to build financial and political support for inclusive policies.
2. Align employment opportunities with high-growth sectors and those facing labor shortages. Cities cannot invest expansively across the entire job-readiness continuum. Instead, they should set clear economic and social priorities and goals and build flexible systems and infrastructure that can respond to changing labor market needs, particularly in sectors or occupations experiencing growth such as green jobs in construction, transportation, energy, and waste management and roles in the digital economy. To prevent skill waste and avoid widening economic divides, cities should prioritize upskilling, reskilling, and matching programs that connect all residents—including migrants and refugees—to these targeted sectors. Investing in digital and soft skills can also help displaced workers reenter the workforce and ensure they benefit from emerging work modalities.
3. Prioritize win-win employment and entrepreneurship measures that benefit both newcomers and long-term residents. Cities should consider not only what is technically feasible but also what can build broader support and avoid backlash, which may mean embedding economic inclusion into broader city priorities, including filling local labor shortages tied to green and digital transitions, infrastructure, and care services. Some of the highest-impact programs that connect newcomers to economic opportunity may not carry labels such as “immigrant integration measure” or “economic inclusion intervention.” This approach can not only be more efficient but also avoid perceptions that cities prioritize the needs of some groups over others.

To advance these principles, city leaders may wish to pursue the following high-impact, practical, and politically feasible actions:

• Set the agenda and the tone. City leaders’ ability to define and advocate for local priorities can be a powerful lever, particularly at a moment where fissures between national and local immigration priorities are emerging in some countries. The rhetoric of top officials, welcoming infrastructure, and including immigrants and refugees in long-term city planning can create important enabling conditions for economic inclusion even as other barriers persist.
• Break down siloes. Even where highly centralized systems place constraints on local governments’ decision-making and budgeting authority, cities control key levers such as setting economic inclusion goals, defining responsibilities, and allocating local resources. Cities can centralize existing programs and address integration as a comprehensive policy area rather than a distinct intervention. Some cities have created dedicated offices or coordinators for migrant and refugee inclusion, while others have strengthened horizontal coordination across employment, housing, education, and planning portfolios. If cities cannot provide services directly, they can still serve as “connectors” by linking migrants and refugees to nongovernmental partners that help them find pathways to regular status and work permits, job search support, language and vocational training, and entrepreneurship programs. Cities should formalize these partnerships and integrate them into local economic inclusion strategies, which turns ad hoc cooperation into durable collaboration.
• Leverage usable data in new ways. Fragmented and incomplete data create an inaccurate picture of foreign-born populations’ economic outcomes in local economies and obscure their untapped potential, so cities may struggle to make evidence-based decisions about priorities for economic inclusion investments. Fragmented data also make it harder to argue for greater investment to national or regional counterparts who often hold the purse strings. But cities can use common-sense strategies to combine existing administrative data sources rather than investing in expensive new data collection capacity. For example, identifying the most valuable indicators and combining data from different agencies—such as employment services, business registration databases, and housing and social programs—can build a clearer picture of how migrants and refugees participate in labor markets and where barriers remain. Cities should also invest in monitoring and evaluation as part of their programming; initiatives often do not track migrant outcomes after hiring, which limits knowledge about job quality, retention, and income progression—factors that are critical to long-term inclusion—and this data gap can weaken the case for continuing to fund these initiatives.
• Use innovative financing to do more with less. Budget constraints require cities to use creative funding models for economic inclusion. Short-term grants and projects allow cities and other local stakeholders to experiment with novel approaches, but cities must identify more sustainable funding streams for efforts to have a lasting impact. Cities can diversify funding sources by blending public, private, and philanthropic resources or embedding economic inclusion components into other funded projects, such as green infrastructure or urban renewal. Pooled funding models also hold potential for scaling inclusion initiatives under the right conditions. A soon-to-launch pilot in Mexico, where a pooled fund will draw from philanthropy, employers, and multilateral banks to support migrant economic inclusion, offers an example of how financing can be creatively leveraged to drive inclusion. Effective application of such approaches will require clarity about desired outcomes, credible and well-defined metrics to track impact, and a compelling return on investment (financial, fiscal, or social) to attract private and public investors.
• Include diverse community voices in program design and implementation. City leaders should draw on the expertise of private-sector and civil-society counterparts and migrant and refugee communities to ensure that economic inclusion programs address real barriers and opportunities in their local economies. Co-design processes, advisory boards, and joint working groups can collect these insights at an early stage and help obtain buy-in for economic inclusion goals among key constituencies.
• Plan for future labor market needs. Technological advancements are reshaping the types of jobs available in cities. City authorities should therefore build flexible systems that adapt to changing labor market needs rather than building infrastructure based on current barriers and opportunities. For example, city-level employment services may need to help displaced workers from multiple sectors reenter the workforce while also helping immigrant and local jobseekers build their AI skills.
• Appeal to a diverse coalition of stakeholders to make the practical case for inclusion. Scaling successful initiatives depends as much on getting political and public buy-in as on technical solutions. Some cities have scaled economic inclusion initiatives successfully by identifying shared interests with opposing parties that transcend political differences and humanitarian arguments. And sophisticated engagement strategies have secured private-sector buy-in in some cities. Strategies such as advising local businesses on how to hire international talent and connecting businesses with a local talent pool of migrants and refugees with sought-after skills have led to solid, years-long partnerships with companies in high-demand industries that cannot find enough skilled workers.121 Cities that demonstrate tangible returns for local communities—such as filling local skills gaps, expanding the tax base, or helping create more sustainable infrastructure—are more likely to secure buy-in from different stakeholders, attract investment, and make initiatives more sustainable.

As cities become more diverse in the coming decades, investing in economic inclusion may help determine whether cities experience economic growth or stagnation and decline. Cities are often hubs of innovation for promoting labor market entry, job mobility, and entrepreneurship. But this does not happen by chance. In a challenging funding landscape, cities will need to think creatively about what is achievable, where there are opportunities for coordination and partnerships, and ways to align economic inclusion measures with broader economic and urban priorities. 

"As cities become more diverse in the coming decades, investing in economic inclusion may help determine whether cities experience economic growth or stagnation and decline."