July 24, 2020

Fearing the worst economic recession in Singapore due to the Covid-19 pandemic, Singaporeans are concerned about bread-and-butter issues such as job security. Unsurprisingly, immigration was a contentious topic in Singapore’s 2020 general election (GE2020). Opponents of immigration were quick to point out that prosperity has not flowed to every Singaporean, as foreigners have displaced locals in competitive roles held by professionals, managers, executives and technicians (PMETs). On the other hand, proponents argue that immigration creates jobs for locals, while making companies more competitive. In fact, views tend to be strong and polarized, as people feel uncertain and insecure about how immigration impacts their lives.

Dr Kelvin Seah Kah Cheng (NUS Department of Economics) explores the contentious issue of immigration in his Straits Times article titled ‘Immigration – a fraught issue that deserves closer study’. He argues that we know little about immigration, and this leaves a lot of room for speculation and for different groups to make different claims about its effects, sometimes based on vested interests. To enlighten the public debate, it is necessary to conduct more research and gather empirical data on the pros and cons of immigration in Singapore.

Dr Seah mentions that some native worker groups will gain while others will lose. For instance, low-skilled immigration benefits high-skilled Singaporeans – since they complement rather than substitute these groups of Singaporeans – and vice versa. Beyond theory, further research could explore exactly which native groups gain and lose, and how large gains and losses are. Empirically, Dr Seah notes that Singapore lacks publicly available data, and therefore understands little about immigration effects on the labour market.

Dr Seah warns that simple associations are not enough. Labour market effects may be driven by factors independent of immigration, such as other macroeconomic conditions. Therefore, simple associations of immigration – with the increased or decreased wages of certain groups of Singaporean workers – are insufficient to establish causality. Dr Seah emphasises that to establish causality, we should find out “what would have been”. Specifically, we should answer a key question: Would native employment and wages have been higher if there were less migration?

If the answer to the above question is yes, it would be indicative that Singaporeans were hurt by immigration. Besides, immigration triggers complex changes in other markets such as housing and product. Dr Seah mentions that more data and research – including statistical methods – are needed to consider all these effects and assess how different societal groups are impacted, in the short and long term, and what the magnitude of costs and benefits are. This would enable more effective immigration policies to be designed for the collective interests of Singaporeans, and enlighten the public debate.

Read the full article here.