The Impact of Foreign Labor on Host Country Wages: The Experience of a Southern Host, Malaysia

Premachandra Athukorala, Evelyn S Devadason

    Research output: Contribution to journalArticle

    Abstract

    This paper investigates the impact of foreign labor on domestic manufacturing wages through a case study of Malaysia, a country where foreign labor has played a key role in manufacturing growth over the past two decades. The main focus of the paper is on an econometric analysis of the determinants of inter-industry variation in wage growth using a new panel dataset. The results suggest that wage growth is fundamentally embedded in the structure and performance of domestic manufacturing. There is evidence of a statistically significant negative impact of foreign labor on the growth of unskilled-worker wages, but the magnitude of the impact is rather small.
    Original languageEnglish
    Pages (from-to)1497-1510
    JournalWorld Development
    Volume40
    Issue number8
    DOIs
    Publication statusPublished - 2012

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