FOREIGN WORKERS AND WITHIN INDUSTRY DYNAMICS

Dominic Soon () and Jang Ping Thia ()
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Dominic Soon: Ministry of Trade and Industry, 100 High Street #11-01, Singapore 179434, Singapore
Jang Ping Thia: Ministry of Trade and Industry, 100 High Street #11-01, Singapore 179434, Singapore

The Singapore Economic Review (SER), 2012, vol. 57, issue 04, 1-15

Abstract: Using a services firm-level dataset for Singapore, we find that different services industries have different industry dynamics with regards to work-permit foreign workers (FWs). In the retail industry, higher FW use is associated with lower firm-level profitability. This suggests that greater industry consolidation through tighter FW allocation could improve overall productivity in the sector. On the other hand, greater FW use in the hotel industry is associated with higher firm-level productivity. This suggests that FWs represent a critical input that supports more productive firms in this tradable sector. Hence, for this sector, FW policy should be more accommodative.

Keywords: Labor markets; firm heterogeneity; allocative efficiency; J31; J48; L25 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1142/S0217590812500269

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