Migration, Automation, and the Malaysian Labor Market

This paper aims to strengthen the evidence base on the employment of migrant workers, the employment of Malaysian workers, and the automatability of tasks performed within occupations in Malaysia. It provides an updated analysis on the relationship between immigration and labor market outcomes of Malaysians. This paper also analyzes the relative automatability of tasks performed by migrant and native workers, which has implications on employment. Findings show a generally positive relationship between immigration and the employment outcomes of Malaysian workers. Further, migrant workers are more likely to perform tasks that are automatable even when compared to Malaysian workers with similar qualifications. Importantly, given that Malaysian workers make up a much larger share of the workforce, the adoption of automation technologies will ultimately have a substantive impact on Malaysians workers. This potential impact can be mitigated by a strengthening of active labor market policies. Also, strengthening the foreign worker management system towards being more demand-driven would be a worthwhile endeavor.