This paper investigates whether employment restrictions contribute to refugees having poorer labor market outcomes than citizens. Utilizing linked register data from Switzerland and within-canton policy variation between 1999–2015, we find substantial negative effects on employment and earnings when refugees are barred from working upon arrival, excluded from specific sectors or regions, or face resident prioritization. Removing 10% of refugees' outside options reduces job-to-job mobility by 7.5% and wages by 3.0%, widening the wage gap to citizens in similar jobs. The restrictions depress refugees' labor market outcomes even after they apply, but do not spur emigration nor benefit other immigrants.

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