Singapore—In an opinion piece for The Straits Times, NUS Professor Kelvin Seah Kah Cheng writes about the advantages and disadvantages of immigration in Singapore, in the light of it being a much-discussed issue in the recent General Election, with many Singaporeans weighing in on the issue of foreign workers in the country.
Professor Seah calls it a “fraught issue that deserves closer study,” and adds that it is one that divides Singaporeans, with those in favor of it saying immigration keeps costs low, attracts international business, which ends with more jobs for citizens. Those in favor of immigration have said that fewer migrants would mean increased prices, as well as less competitive companies.
However, those opposed to an overly large migrant community argue that immigrants end up in competition with locals for jobs, that the quotas for work permit and S Pass holders are too generous, and that no levies or quotas are imposed on Employment Pass holders.
But how people will in actuality be affected by immigration still remains to be seen.
Professor Seah says that according to economic theory, immigration does not affect people in the same way. This depends on their skill level, as well as the skill levels of immigrants. In general, when immigrants have low skill levels, this is to the advantage of highly skilled local workers, but to the detriment of the low-skilled local workforce. Immigrants with low skill levels are apt to take the place of the low-skilled local workforce but are complementary to high-skilled local workers, and vice versa.
However, since this is dependent on theory, data is still needed to determine the nature and extent of the gains and losses to the local workforce.
Professor Seah writes, “But even this endeavour has not yielded conclusive findings. To be sure, many empirical studies done internationally have found immigration to have only small and insignificant effects on wages and employment of native workers.”
And while research conducted in different countries has yielded different results, he maintains that the effects of immigration are specific to the country where it occurs and that generalisations would be difficult to arrive at.
More research, he says is needed in Singapore. “Empirically, what do we know about the labour market impact of immigration in Singapore? Not much. One reason for this is the lack of high-quality peer-reviewed Singapore-based empirical research addressing this, owing possibly to the lack of publicly available data.”
Moreover, he adds that the simple associations between the immigration and labour market outcomes are insufficient for drawing conclusions. While those in favour of immigration say that it is beneficial due to a positive relationship between the incomes and employment of natives and immigration over time, those on the opposite side argue that the local workforce experiences a stagnation in their wages by showing a negative relationship between immigration and the salaries of local workers.
The scarcity of data is part of the problem, as this leads to speculation from both sides concerning the effects of immigration, as well as brings about uncertainty and insecurity among people.
Undoubtedly, there are benefits and costs to immigration, and it brings about changes in any country’s economy. But in order to determine the extent of these changes, “a comprehensive assessment would need to consider all these effects and to assess how different groups in society are impacted by immigration – both in the short and in the long run,” he writes, saying that how we presently comprehend the situation is “woefully inadequate.”
The professor also calls this troubling, as it prevents Singaporeans “from knowing exactly what the trade-offs associated with immigration are and to improve upon public decision-making.”
Additionally, the lack of research puts Singapore at risk of policies being implemented for the good of certain lobbying groups, and not the nation as a whole.
“More data and research on the impact of immigration in Singapore will serve to enlighten the public debate and allow more effective immigration policies to be designed,” writes Professor Seah. —/TISG
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