The impact of immigration on Thailand's economy

The impact of immigration on Thailand's economy

In recent decades, Thailand has been an attractive destination for immigrant workers due to its relatively high wages and economic growth. A joint paper by the International Labour Organization and the OECD Development Centre looks at the impact immigration has had on the country’s economy.

Immigration’s positive effects far outweigh any negative impact,” writes Amelie F. Constant “…Instead, migrants often complement native workers or accept jobs that natives don’t want or can’t do.”

This supports the findings of the report which says foreign-born and native-born workers in Thailand integrate very differently in the labor market. Immigrant workers are relatively young and active in many fast-growing occupations, which seems to confirm that immigration mostly responds to demand for labor. They are also younger than their native cohorts, and more likely to be employed, filling labor shortages which have arisen from the aging Thai workforce.

When assessing the impact migrant workers had on employment opportunities for native-born Thai workers, the report found that there was no impact on employment levels. However, the presence of immigrants does affect the composition of employment, and in particular seems to positively increase the number of native-born workers in paid employment.

According to the report, immigrant workers are active in all sectors of the economy, particularly in the industrial sectors. In 2010, one in every eight workers in manufacturing was an immigrant. Foreign-born workers were also overrepresented in construction as well as in some service sectors.

Given the sectoral distribution of workers and their productivity, the economic contribution of immigrant workers is estimated to range from 4.3% to 6.6% of GDP in 2010, while they represented 4.7% of the employed population.

Constant says, “…the quantitative evidence shows that, overall, immigrants do not take native workers’ jobs in the long term and that they stimulate job creation through increased production, self-employment, entrepreneurship, and innovation. They also provide opportunities for native workers to upgrade their occupation and specialize in higher-skill jobs.”

Thailand became a net migration country in the early 1990s. Over a period from 2000 to 2010, the foreign-born population increased by a factor of ten from 263,000 to 2.5 million people.

While the rights of immigrant workers have progressed, specifically in health care, social security, and education, they remain vulnerable.

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