The Bank of Korea: "No Decrease in Domestic Employment Despite Increase in Foreign Workers"

[Asia Economy Reporter Jang Sehee] An analysis has emerged showing that even if the number of foreign workers increases domestically, the jobs of native workers do not decrease. This is due to the effect of shifting toward communication-centered tasks.

On the 5th, Kim Hyejin, Associate Research Fellow at the Micro-Institutional Research Office of the Bank of Korea, stated in the 'Impact of Foreign Inflow on the Job Specialization of Native Workers' (BOK Issue Note) that "the inflow of foreigners can affect not only the employment and wages of native workers but also the composition of their tasks."

According to the analysis, for every 1 percentage point increase in the proportion of foreigners in the total population of a region, the supply of communication tasks increased by 0.393% compared to physical tasks.

This means that if the number of physical task jobs increases by 10,000 when the foreigner proportion rises by 1 percentage point, the number of communication task jobs increases to 10,039.

The report explained, "Foreigners tend to have a relative advantage in physical tasks due to their lack of Korean language proficiency," adding, "Therefore, when the inflow of foreigners increases, native workers move toward communication tasks where they have an advantage."

It analyzed that when native workers compete with foreign workers who can speak Korean, even a slight advantage in language ability makes it significantly more favorable to engage in communication tasks.

Regarding the shift toward communication tasks, the effect was found to be greater for women (0.552%) than for men (0.229%).

The report explained, "Women tend to have shorter tenure compared to men, so they are less often used as company-specialized personnel," adding, "As a result, the cost of switching from physical tasks to communication tasks is lower."

Associate Research Fellow Kim said, "This phenomenon, previously observed in traditional immigrant-receiving countries such as the United States and Europe, has also appeared in the domestic labor market," and added, "Due to differences in language ability and understanding of the labor market, even if the inflow of foreigners increases, native employment does not decrease, and there is an effect of reallocating from physical tasks to communication tasks."

He further stated, "To maximize the productivity improvement effect resulting from this, efforts to enhance labor market flexibility, such as retraining for skill improvement of native workers, are necessary."

However, the study did not reflect the impact of COVID-19.

This content was produced with the assistance of AI translation services.