In response to severe labor shortages resulting from youth outmigration and population aging, the inflow of foreign labor has been rapidly increasing in South Korea's depopulated areas, particularly in labor-intensive sectors such as manufacturing. Th...
In response to severe labor shortages resulting from youth outmigration and population aging, the inflow of foreign labor has been rapidly increasing in South Korea's depopulated areas, particularly in labor-intensive sectors such as manufacturing. This study investigates the determinants of low-skilled and high-skilled foreign labor inflows across 32 depopulated municipalities in the Gyeongsang region between 2019 and 2023, using a panel dataset and a fixed effects regression model. The analysis reveals that an increase in the net inflow of domestic youth is negatively associated with the inflow of low-skilled foreign labor, but positively associated with the inflow of high-skilled foreign labor. These findings suggest that low-skilled foreign workers act as substitutes for domestic youth labor, whereas high-skilled foreign workers exhibit a complementary relationship. Based on these results, this study provides policy implications for local governments: regions with active domestic youth inflows should promote cooperative industrial strategies with high-skilled foreign workers, while regions experiencing continued outmigration should design integrated policies to support the long-term settlement of low-skilled foreign labor. These insights offer an evidence-based foundation for developing differentiated foreign labor policies tailored to the industrial and demographic contexts of depopulated regions.