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Kim, Yeon Soo
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KDI Policy Forum 255
- The current foreign worker admission system divides workers into the two categories of "professional" and "nonprofessional" workers, and is thus not very successful at resolving labor shortages at varying skill levels. - If the unskilled worker requires significant job training due to his lack of skills, it might reduce his productivity and generate inefficiencies compared to hiring a worker who already has the required skills. - The "professional" category includes jobs with widely varying duties and skill levels, thereby making it difficult to implement differentiated policies among them. - There has been a lack of differentiation by skill level and labor shortage. - Admission of nonprofessional foreign workers is subject to an annual quota which is determined based on fragmented data on labor shortage and economic conditions. - Other indicators that could help assessing the labor market situation as a whole, e.g. employment and wage growth rates, are not being taken into account. - Admission of foreign workers is linked with labor shortage which is currently assessed primarily based on employer-reported statistics. - Reform towards a system that differentiates foreign workers by skill level and determines eligibility based thereon should be of high priority. - Employment of nonprofessional foreign workers should be strictly based on demand. - The "professional" category of foreign workers, which currently includes a wide range of highly skilled professionals as well as skilled workers, needs to be divided into subcategories according to occupation. At the same time, priority should be given to those in occupations that are hard to fill in the short-run and the highly skilled. - To this end, consideration should be given to the establishment of an integrated migration committee that can oversee and coordinate various foreign worker related policies and determine the need for foreign workers based on thorough labor market reviews. - Labor market tests should be implemented more widely so as to prevent the deterioration of working conditions of native workers. - The current admissions system needs to be divided by skill level and labor market tests need to be implemented more rigorously as the crowd-out of native workers may occur as the economy shifts more towards the service industry and as the economically active population currently classified under professional visas becomes more highly educated. - Labor market tests can be strengthened by requiring employers to indicate on the job advertisement specific working conditions such as wages. - One way to check whether employers participating in the employment permit system are displacing native workers is to link the foreign worker database and the employment insurance database or to perform verification during regular supervisory visits by government officials.
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Research Report

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