Navigating new horizons: Entrepreneurship as a pathway to identity transformation and mental well-being for refugees

The global refugee crisis is escalating, with forced displacement reaching unprecedented numbers. The increasing prominence of refugee resettlement in Western countries underscores the necessity of effective integration strategies. Employment is a critical aspect of this process, yet refugees often face numerous barriers such as insufficient language proficiency, non-recognition of credentials, and mental health challenges. Entrepreneurship is increasingly recognized as an alternative, offering potential for economic integration and personal empowerment, despite inherent challenges. This dissertation explores the multifaceted role of entrepreneurship, aiming to understand how entrepreneurship facilitates refugees’ economic integration and impacts their personal and professional lives in the host country, seeking to provide a nuanced understanding of the dynamics at play. To explore this, I employed a mixed-methods approach across the studies, following the induction-deduction cycle. Chapter 2 describes a systematic literature review that identifies numerous challenges that disproportionately impact refugees resettling in Western societies, particularly credential recognition, which often leads to un- or underemployment. A subsequent qualitative exploration, however, revealed how entrepreneurship allows refugees to sidestep some of these barriers. Chapter 3 describes an ethnography which provides insights into the dynamics of work identity transformation for refugees. It shows that those who attribute their past professional successes externally exhibit greater identity flexibility, facilitating their economic integration. The study further describes key practices that aid the identity transformation process, such as forging connections with locals and distancing from the ascribed refugee identity. Finally, Chapter 4 describes an experience sampling study examining the mental health restoration process among refugee entrepreneurs participating in a business incubation program. This study revealed that participation significantly increased refugees' sense of purpose and belonging, with an increasing sense of control over life emerging as the most robust predictor of mental health restoration. Increased social embeddedness also played a crucial role, reducing reliance on internal psychological mechanisms. In all, entrepreneurship emerges as a promising strategy for refugees' economic integration, enabling them to bypass pervasive labor market barriers. It also yields identity and mental health- related benefits, providing a sense of agency and facilitating social embeddedness. This dissertation provides valuable insights for practitioners and policymakers. Practitioners, especially those in refugee support organizations, should prioritize social embeddedness to enhance identity and mental health benefits. Policymakers are encouraged to shift focus from quick employment solutions to meaningful employment opportunities, recognizing entrepreneurship as a promising pathway to labor market integration. Reducing regulatory barriers and enhancing support can significantly aid refugees’ economic integration, ultimately benefiting both refugees and host societies.