The Refugee Revenue Gap: Decomposing Earnings Differences in Host Economies of Uganda

Uganda’s progressive refugee-hosting policy is predicated on the economic integration of refugees into local economies. However, the extent and drivers of economic disparity between refugee and host community households remain inadequately quantified. This study employs a novel, comprehensive 2021 household survey dataset from refugee-hosting districts in Uganda to decompose the ‘‘refugee revenue gap’’ the difference in earnings from agriculture, enterprise, and labour. Utilizing Blinder-Oaxaca decomposition techniques, we analyze data from 5,636 households (2,496 Ugandan nationals and 3,140 refugees) to isolate the portion of the gap attributable to observable endowment differences (e.g., assets, land, human capital) from the portion due to structural disadvantages or differential returns to those endowments. Findings indicate a significant revenue gap, driven predominantly by refugees' lower access to and control over arable land, smaller asset bases, and constrained access to formal credit and higher-value markets. Despite similar levels of entrepreneurial activity, refugee-owned enterprises generate significantly lower revenue. The results underscore that while Uganda's policy provides a crucial foundation, targeted interventions in land access, financial inclusion, and market linkages are essential to bridge the economic divide and realize the full potential of refugee economic inclusion.