Anecdotal evidence has repeatedly highlighted the links between displacement and low levels of socioeconomic development, and the need for governments to invest in preventive solutions if they want to ensure inclusive and sustainable development. More systematic, quantitative evidence is needed to demonstrate the short and longer-term economic impacts of internal displacement and generate the political will to address the phenomenon.
This thematic series aims to measure the effects of internal displacement on the economic potential of IDPs, host communities and societies as a whole, bridging the knowledge gap through innovative research, partnerships with experts and practitioners from a wide range of disciplines and consultations with policy stakeholders concerned with economic development.
Uncovering the hidden cost of internal displacement would help make the case for increased country-led investments in risk reduction and durable solutions. Past studies have assessed the impact of international migration and refugee flows on work and other singular dimensions such as health or education. Others have attempted to assess the socioeconomic impact of cross-border or internal displacement at the local level.
However, a systematic, quantitative estimate of the overall impact of internal displacement on an economy has yet to be made, and doing so requires new concepts and methods. This document introduces a new conceptual framework to assess the economic impact of internal displacement comprehensively across dimensions, time, countries and displacement contexts.
Lost production due to internal displacement: the 2015 earthquake in Nepal
The April 2015 earthquake that struck the Nepalese region of Gorkha killed nearly 9,000 people, injured more than 16,000 and destroyed hundreds of thousands of homes across the country. In addition to the human suffering it caused, the magnitude 7.8 quake had an immediate economic impact estimated at as much as half of Nepal’s $20 billion GDP. The ensuing internal displacement had further consequences for the economy that until now have not been quantified.
IDMC launched a research project in 2017 to assess the economic impact of internal displacement in terms of livelihoods, housing and infrastructure, health, education, social networks, security and the environment. As part of our research, we developed a new methodology to estimate lost production, which we have applied here to the Gorkha earthquake.