A common perception in many destination countries is that foreign workers take jobs away from natives. Our results indicate something quite different: immigration virtually has no impact on national employment levels. On the contrary, influx of migrant workers (in a given sector, region) attracts native workers from other markets into that one (Del Carpio et al. 2013). We also do not find big changes in relative wages across industries but a modest increase for native workers and a sharper decline for existing migrant workers, the main competitors to the newer arrivals. This is another indication of tight labor markets where unemployment levels stay below 5%.
In general, our results show that the main beneficiaries from the arrival of unskilled foreign workers are high school educated Malaysian workers who tend to work as immediate supervisors and have complementary skills to those of immigrants.
What do these analyses imply? One of the key goals of the government is for Malaysia to become a high-income economy. Stable growth and rapid educational improvements are critical to this process. However, this transformation creates labor shortages which can only be filled by low-skilled foreign workers. Without their availability, many firms and, potentially whole sectors, might disappear, taking away the jobs for Malaysians, destabilizing an economy which showed resilience in the face of global crisis.