A framework for measuring the impact of internal displacement on income

Internal displacement can affect the lives of people forced to leave their home because of conflict, violence, climate change or disasters, in many ways. Their housing, access to infrastructure and education, health, social life, security and environment change and often degrade. Displaced people often lose their livelihoods, as a result of being pushed away from their work place or source of income. Some experience months or years without the means to make a decent living.

Loss of livelihood can have repercussions on the ability of displaced people to meet their needs and disrupt access to services such as healthcare and education. It can also damage their social life and impact their mental health and wellbeing. IDMC studies have estimated internal displacement triggered by specific events in Nepal, Mexico and Cuba cost the three countries hundreds of millions of dollars. In an analysis of the economic impacts of internal displacement in eight countries, loss of livelihood was found to be the main financial burden, close to health and housing costs and far ahead of security and education costs.

These findings are concerning, because they are underestimates. They consider only the most direct consequences of internal displacement on the income of displaced people when they are unable to continue their previous activity. They do not take into account impacts on the host community or on the broader production system of the affected area. This paper, part of IDMC's thematic series "The ripple effect: economic impacts of internal displacement", presents a wider framework to evaluate the impacts of internal displacement on income in the host economy.