This paper analyzes the economic impact of temporary and unskilled immigrant workers in Korea who have been dramatically increasing in recent years.
First, This paper applies the productiontheory approach to assess the effects of immigration on the Ko...
This paper analyzes the economic impact of temporary and unskilled immigrant workers in Korea who have been dramatically increasing in recent years.
First, This paper applies the productiontheory approach to assess the effects of immigration on the Korean labor market. Native labour is disaggregated into skilled workers and unskilled workers. Together with capital, this adds up to four inputs. The data are cross section for 236 firms in manufacturing industries.
The results indicate that an increase of immigrant unskilled workers has a statistically significant negative effect on native unskilled workers. But the effects of shifts in immigrant supply on the earnings of native workers are very small. On the other hand, increases in the supply of immigrants do have a relatively sizable impact on the earnings of immigrants themselves.
Second this paper analyzes the effects on macroeconomic indicators of immigration into Korea using 8sector computable general equilibrium(CGE) model. Immigration leads to increases in real GDP, governmental revenue, the returns of capital and native skilled workers. But native unskilled workers are hurt by immigration. Native household income is decreased. But the household income loss amounts to a mere 0.40% even in the case of immigration of 0.8 million workers.
The simulation suggests that the employment of immigrant workers causes the different effects according to the industry. Positive effect is strongest in manufacturing and weakest in construction.