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15. A World Bank study showed that for every 1,000 foreign workers deployed, some
836 full time jobs are created for Malaysians together with 169 part-time jobs. This result is
attributed to the effect from maintaining production costs low because of the use of foreign
workers, thereby making Malaysian firms competitive and giving them the possibility to
expand exports, consequently leading to an increase in demand for Malaysian workers. The
analysis in this study showed that more jobs are created in the agriculture and services sectors,
and relatively less in the manufacturing sector. Unfortunately, the study result indicate a
gender bias, in that more jobs suitable for men are created and less of the types associated
with women.

16. The World Bank study3 showed that hiring foreign workers was beneficial for
workers with mid-level to higher educational qualifications. Its impact on workers with
primary to no formal education was quite negative. For 100 foreign workers hired, about 114
jobs of Malaysians were lost or taken up by foreigners. This shows that foreign workers
compete directly with this low skilled segment of Malaysian workers. It should be noted that
these foreign workers in general also have very low educational levels. A mitigating factor is
that the relative numbers of Malaysians in this low skilled segment is relatively smaller today
as most Malaysian workers are now better educated.

17. The impact from the hiring of foreign workers on wages of Malaysian workers in
general do not show any marked impact. The findings do suggest that there is a marginal
impact in raising the level of overall wages and indicate that Malaysian labour is highly
mobile across sectors to take advantage of positive changes in wages across sectors.

18 In terms of the social impact of the presence of foreign workers, the study showed that
an increase of foreign workers into a community is associated with lower incidences of crime
in the neighbourhood. This result is largely explained by the fact that an increased presence
of foreign workers tends to increase economic activities in that area, which is the principle
reason for a lowering of crime. In most jurisdictions around the world, an increase in incomes
from rising economic activity is strongly correlated with a lower crime rate.

Immigration in Malaysia: Assessment of its Economic Effects, and a Review of the Policy and System. 2013.
3
HumanDevelopment Social Protection and Labor Unit, East Asia and Pacific Region, World Bank in coordination with ILMIA.

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