Immigration, job vacancies, and employment dynamics: Evidence from Thai manufacturers

Do immigrant workers fill in job vacancies and promote employment dynamics? Using Thailand's firm-surveyed data, this paper investigates the challenges experience by firms employing immigrant workers and how immigrants help to fill job vacancies. Descriptive analysis shows that Thai firms do not have much difficulty employing immigrant workers, who come mostly from neighboring countries. Our regressions shows that, by analyzing firm-level characteristics, firms employing immigrant workers tend to be more labor intensive, use computers or other technologies less in production, are recently established, and employ high proportions of low educated workers. Firms having job vacancies in either skilled or unskilled positions and losing production days due to slowdown and stoppage of workers will tend to employ more immigrant workers in order to fill those vacancies and smooth out its production. The impacts of job vacancies on the demand of immigrant workers was found to be stronger among firms located in non-border areas where immigrants tend to move away from bordering provinces to larger provinces where there are better job opportunities. Labor cost concerns, either wage cost or fringe benefit costs, also force firms to employ more migrants in order to maintain their cost competitiveness. By using firm-level panel dataset, firms employing migrant workers in the past seem to realize the benefits from employing more migrants today. The results pose challenges to migration management policies that aim to harmonize the demand for labor in short-term vis-a-vis long-term development.