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Labor, Productivity And Singapore'S Development Model

Author

Listed:
  • ENG FONG PANG

    (Lee Kong Chian School of Business, Singapore Management University, 50 Stamford Road, Singapore 178899, Singapore)

  • LINDA Y. C. LIM

    (Stephen M. Ross School of Business, University of Michigan, 701 Tappan, Ann Arbor, Michigan 48109-1234, United States)

Abstract

This paper discusses how Singapore's labor market policies since independence have been molded by the state-driven, foreign investment-led, export-oriented, manufacturing-focused development model the country has followed over the past fifty years. The literature we review shows that high GDP growth has been achieved through factor accumulation rather than productivity increase, a strategy of extensive growth that has now run into diminishing returns as well as political, social and resource constraints. Prolonged heavy dependence on imports of foreign labor and skills to attract foreign investment has contributed to low, declining and even negative productivity growth, with low real GDP growth in recent years. In response, the government is pursuing renewed economic restructuring, limiting foreign labor inflows, targeting investments more selectively, and promoting productivity and innovation, so far with uncertain results. This paper suggests that Singapore should let market forces propel the economy toward services, domestic consumption and regional trade, led by domestic private enterprise. But the retreat from established state industrial and social policies will be difficult.

Suggested Citation

  • Eng Fong Pang & Linda Y. C. Lim, 2015. "Labor, Productivity And Singapore'S Development Model," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 60(03), pages 1-30.
    • Handle: RePEc:wsi:serxxx:v:60:y:2015:i:03:n:s0217590815500332
    DOI: 10.1142/S0217590815500332
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    References listed on IDEAS

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    1. repec:ilo:ilowps:485017 is not listed on IDEAS
    2. Tat Hui, Weng & Toh, Ruby., 2014. "Growth with equity in Singapore : challenges and prospects," ILO Working Papers 994850173402676, International Labour Organization.
    3. Alwyn Young, 1994. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," NBER Working Papers 4680, National Bureau of Economic Research, Inc.
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    Cited by:

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    2. Matthew Zook & Michael H Grote, 2017. "The microgeographies of global finance: High-frequency trading and the construction of information inequality," Environment and Planning A, , vol. 49(1), pages 121-140, January.
    3. Peter Waring & Azad Bali & Chris Vas, 2020. "The fourth industrial revolution and labour market regulation in Singapore," The Economic and Labour Relations Review, , vol. 31(3), pages 347-363, September.
    4. Vié, Marie-Sklaerder & Zufferey, Nicolas & Cordeau, Jean-François, 2019. "Solving the Wire-Harness Design Problem at a European car manufacturer," European Journal of Operational Research, Elsevier, vol. 272(2), pages 712-724.

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