SEOUL, Jan. 7 (Korea Bizwire) — The increase in the number of foreign workers does not result in domestic employees losing jobs — instead, it promotes the relocation of domestic workers towards duties where communication skills are important, South Korea’s central bank said.
The influx of foreign workers can impact not only the employment and wages of domestic workers but also the composition of duties, according to the report released by the Bank of Korea.
The study showed that a 1 percentage point increase in the share of foreigners in a region’s total population resulted in a 0.393 percent increase in the supply of communication duties compared to physical duties.
This means that if the number of jobs with physical duties is set at 10,000 when the share of foreigners increases by 1 percentage point, the number of jobs with communication duties increases to 10,039.
The report noted that foreigners have a comparative advantage in physical duties due to poor Korean language skills. Accordingly, when the influx of foreigners increases, domestic workers shift to communication duties where they have a comparative advantage.
It added that even when competing with foreign workers who can speak Korean, domestic workers could be in a more advantageous position to perform communication duties if they have marginal superiority in language skills.
The share of foreigners in the Korean population rose to 2.3 percent in 2015, about a fourfold increase from 0.5 percent in 2000, the fastest growth among members of the Organization for Economic Cooperation and Development (OECD).
J. S. Shin (email@example.com)