The Effect of Foreign Worker Migration on Employment in Three Countries (Indonesia, Malaysia, Philippines)

Abstract

This study aims to analyze the effect of foreign worker migration on employment in the Indonesian labor market. The increasing number of foreign workers has raised concerns regarding its impact on domestic labor opportunities, particularly in developing countries such as Indonesia. While foreign labor can contribute to economic growth through technology transfer and knowledge exchange, it may also increase competition in the labor market. This research uses a quantitative method with panel data from three Southeast Asian countries: Indonesia, Malaysia, and the Philippines during the period of 2014–2024. The variables used include employment as the dependent variable, while Gross Domestic Product (GDP), unemployment, labor force, and migration are used as independent variables. The data were analyzed using panel data regression with EViews 12 software. Based on the Chow Test, the Common Effect Model (CEM) was selected as the most appropriate model. The results show that migration has a negative and statistically significant effect on employment. This indicates that the increase in foreign worker migration may reduce employment opportunities for domestic workers due to increased competition in the labor market. Therefore, appropriate government policies are needed to balance the benefits of foreign labor with the protection of domestic employment.