Foreign Labour on Malaysian Growth

Foreign Labour on Malaysian Growth

This paper is to examine the impact of foreign labour on Malaysian economic growth using panel data from three sectors: manufacturing, services, and construction for the period of 1990~2010. The short run and long run effects of foreign labour on output growth are analysed using the Autoregressive Distributed Lag approach. The study shows that the skilled and semi-skilled foreign labours have a positive and significant impact on the output growth in both the short run and the long run. However, the study finds that the unskilled foreign labour adversely affects output growth in both the short run and the long run.