Foreign Labor and Economic Growth: Policy Options for Singapore

Singapore Economic Review, Vol. 52, No. 1, 2007

Posted: 8 May 2007

See all articles by Weng Tat Hui

Weng Tat Hui

National University of Singapore

Aamir Rafique Hashmi

University of Calgary - Department of Economics; University of Calgary

Abstract

Prior to the Asian economic crisis in 1997, Singapore's official projected medium-term GDP growth target was set at 7% per annum. Since then, the targeted growth rate has been reduced to 5%. This paper examines the implications of the 5% growth target on the labor requirements of the Singapore economy. It is shown that the projected resident labor force will not be able to keep pace with the increased labor demand and the share of foreigners in the labor force will increase significantly even under the most favorable scenario. Some implications of the increased dependence on foreign labor in Singapore are discussed. With permanent immigration fixed at the current level, various policy options and their effects on the demand for foreign labor are considered. These include improving labor productivity, raising the total fertility rate, increasing labor force participation of older workers and lowering the targeted rate of economic growth.

Keywords: Singapore labor market, foreign labor, growth

JEL Classification: J11, J21, O53

Suggested Citation

Hui, Weng Tat and Hashmi, Aamir Rafique, Foreign Labor and Economic Growth: Policy Options for Singapore. Singapore Economic Review, Vol. 52, No. 1, 2007. Available at SSRN: https://ssrn.com/abstract=984236

Weng Tat Hui (Contact Author)

National University of Singapore ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

Aamir Rafique Hashmi

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

University of Calgary ( email )

2500 University Drive NW
Calgary, Alberta T2N 1N4
Canada

HOME PAGE: http://aamirhashmi.com

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