Title: Dynamic co-integration between foreign workers and unemployment in Malaysia

Authors: Mohd Shahidan Shaari; Abdul Rahim Ridzuan; Faiz Masnan; Nur Salimah Alias

Addresses: Faculty of Economics and Business, Universiti Malaysia Sarawak, 94300 Kota Samarahan, Sarawak, Malaysia ' Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, Malaysia ' Faculty of Applied and Human Sciences, Universiti Malaysia Perlis, Malaysia ' Faculty of Applied and Human Sciences, Universiti Malaysia Perlis, Malaysia

Abstract: This study attempts to investigate the effect of foreign workers on unemployment in Malaysia. Data ranging from 1982 to 2018 were analysed by using the ARDL approach. The results show that a higher number of foreign workers does not have any impact on unemployment in the short run and long run in Malaysia. Therefore, an increase in the number of foreign workers into Malaysia does not affect the native labour force. This is because some critical sectors, such as construction, need foreign workers to ensure that the activities of the sectors are not affected due to the shortage of labour. Native workers do not favour jobs in the sectors owing to low payment. The Ganger causality results, on the other hand, show that migration can influence unemployment in the country. Therefore, these findings can shed light on the issue for policymakers to formulate the right policies.

Keywords: foreign workers; unemployment; ARDL; Malaysia.

DOI: 10.1504/IJPSPM.2024.142343

International Journal of Public Sector Performance Management, 2024 Vol.14 No.3/4, pp.384 - 397

Received: 05 Apr 2020
Accepted: 06 Dec 2020
Published online: 25 Oct 2024 *

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