25 April 2018
Migration, Jobs and Wages: Reassessing Benefits and Challenges of Labour Migration
Abstract
As Southeast Asian economies become deeply integrated, there are concerns as to whether movement of people through labour migration should be part of this integration. While labour migration offers benefits especially in addressing labour shortage in countries with shrinking working age population, for countries at different levels of economic development, opening up the labour markets presents disadvantages to locals facing more job competition and falling wages. This paper re-examines this debate by analysing a number of factors that have allowed states to maintain their competitiveness and improve wages. By comparing the experiences of a number of countries that have seen rising wages with those countries that saw falling wages with labour migration, and using a statistical (two-sample difference of means) test, this preliminary study shows that labour migration by itself is neither boon nor bane. A more nuanced view is needed, as labour migration’s impacts on wages hinge on the nature of institutional support provided by governments in helping firms to be internationally competitive.
Abstract
As Southeast Asian economies become deeply integrated, there are concerns as to whether movement of people through labour migration should be part of this integration. While labour migration offers benefits especially in addressing labour shortage in countries with shrinking working age population, for countries at different levels of economic development, opening up the labour markets presents disadvantages to locals facing more job competition and falling wages. This paper re-examines this debate by analysing a number of factors that have allowed states to maintain their competitiveness and improve wages. By comparing the experiences of a number of countries that have seen rising wages with those countries that saw falling wages with labour migration, and using a statistical (two-sample difference of means) test, this preliminary study shows that labour migration by itself is neither boon nor bane. A more nuanced view is needed, as labour migration’s impacts on wages hinge on the nature of institutional support provided by governments in helping firms to be internationally competitive.
