Addressing Labor Shortages through Stable Stay for Foreign Guest Workers: Evidence from South Korea's New Visa System
◈ 주 제 : Addressing Labor Shortages through Stable Stay for Foreign Guest Workers: Evidence from South Korea's New Visa System
◈ 발표자 : 이종관 (연세대)
◈ 일 시 : 2024년 10월 02일 수요일 16:30 ~ 17:45
◈ 장 소 : 우석경제관(223동) 405호
◈ 주 관 : 경제학부, 경제연구소 한국경제혁신센터, SSK, BK21
Addressing Labor Shortages through Stable Stay for Foreign Guest Workers: Evidence from South Korea's New Visa System
Abstract:
What are the consequences of allowing foreign guest workers to stay semi-permanently in the host country? We show the impacts of the stable stay of foreign workers on local job vacancies by exploiting the implementation of a new visa system (E-7-4), which guarantees the continuous stay of temporary immigrant workers in South Korea. Applying an event study that leverages the pre-period exposure to the new visa system across cities, we first find that the policy alleviates labor shortages in industries such as agriculture and low-skilled manufacturing, which suffered from significant labor shortages. We also find that the extended stay of guest workers led to enhanced productivity, possibly by preventing the loss of firm-specific human capital. Finally, our heterogeneity analysis suggests that encouraging the stable stay of foreign guest workers could be an effective tool in relieving labor shortages, particularly in regions where population decline is a serious problem.