The impact of foreign labour on average real wages of residents: Evidence from Malaysia's construction sector

Atif Awad, Ishak Yussof

Research output: Contribution to journalArticle

Abstract

In this study, instead of examining the impact of migrant workers on the real wages of natives, which has already been extensively addressed, we have estimated the impact of migrant workers on the average real wages of residents (both natives and earlier immigrants). We examine whether the impact of migrant workers on the average real wages of residents varies over time as well as varying across occupations. We employ the pooled mean group (PMG) technique on panel data for four Malaysian construction subsectors during the period 1990 to 2010. The results show that over time, all foreign labour as well as unskilled migrant workers have considerable and positive impacts on the real wages of all resident workers. However, in the adjustment period, in the short-run, only the wages of unskilled workers respond positively and significantly to foreign workers. Given both the unfavourable work conditions for natives as well as the significance of this sector to the overall economy, policy makers should facilitate the flow of migrant workers to this sector.

Original languageEnglish
Pages (from-to)183-209
Number of pages27
JournalInternational Journal of Productivity and Quality Management
Volume28
Issue number2
DOIs
Publication statusPublished - 1 Jan 2019

Fingerprint

Residents
Real wages
Construction sector
Migrant workers
Labor
Malaysia
Workers
Work conditions
Politicians
Short-run
Wages
Panel data
Immigrants

Keywords

  • Demand
  • Foreign labour
  • Supply of labour
  • Wages
  • Working condition

ASJC Scopus subject areas

  • Business, Management and Accounting(all)

Cite this

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