Proceedings of the 1st Workshop on Multidisciplinary and Its Applications Part 1, WMA-01 2018, 19-20 January 2018, Aceh, Indonesia

Research Article

Review of Literature on The Impact of Foreign Workers on Wages Keywords:Foreign Workers; Wages

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  • @INPROCEEDINGS{10.4108/eai.20-1-2018.2282081,
        author={Sri  Wahyuni and Nasri  Bachtiar and Elfindri  Elfindri and Endrizal  Ridwan},
        title={Review of Literature on The Impact of Foreign Workers on Wages Keywords:Foreign Workers; Wages},
        proceedings={Proceedings of the 1st Workshop on Multidisciplinary and Its Applications Part 1, WMA-01 2018, 19-20 January 2018, Aceh, Indonesia},
        publisher={EAI},
        proceedings_a={WMA-1},
        year={2019},
        month={9},
        keywords={foreign workers wages},
        doi={10.4108/eai.20-1-2018.2282081}
    }
    
  • Sri Wahyuni
    Nasri Bachtiar
    Elfindri Elfindri
    Endrizal Ridwan
    Year: 2019
    Review of Literature on The Impact of Foreign Workers on Wages Keywords:Foreign Workers; Wages
    WMA-1
    EAI
    DOI: 10.4108/eai.20-1-2018.2282081
Sri Wahyuni1,*, Nasri Bachtiar2, Elfindri Elfindri2, Endrizal Ridwan2
  • 1: Department of Economics, Universitas Almuslim, Bireuen, Indonesia
  • 2: Department of Economics, Universitas Andalas, Padang, Indonesia
*Contact email: wahyuni1313@gmail.com

Abstract

This paper reviews the current theoretical and foreign workers research with a particular emphasis on the impact of foreign workers on wages level. In general, the model that is used to measure the impact of foreign workers on wages level is Constant Elasticity of Substitutes model (CES), assimilation economic model, cohort effect model, spatial correlation model, Total Factors Productivity (TFT), Skill-Biased Productivity (SBP), standard cross-section and other estimation models. The research results found are different, thus emerging the positive and negative effect. The positive impact is the optimism of the impact of foreign workers’ presence on local workers with high skills and experience. The group of high skill and experience shows that the relations between local and foreign workers are complementary and causes the transfer of technology and knowledge level, as well as the wages of local workers, tend to increase. Meanwhile, the negative impact is the pessimism of the impact of foreign workers’ presence on local workers with low skills. The group of low skill and experience are substitutionary and causes increased unemployment, as well as the wages of local workers, tend decline.