Do Foreign Care Workers Affect Native Health Outcomes?: Evidence from Japan's Care Sector

To alleviate the growing shortage of care workers, the recruitment of foreign labor has become an important strategy in the care sectors of many high-income countries. However, existing studies on the impacts of foreign care workers--an issue of major concern for host countries--remain limited and report mixed findings. Taking Japan as a case study, this paper empirically examines whether the employment of foreign care workers in the care sector affects the health outcomes of native residents. We use Japanese native mortality rate attributable to care institutions as a proxy for health outcomes and focus on the impact of the share of foreigners among Certified Care Workers (CCWs). Using prefecture-level panel data from 2012 to 2023 and fixed-effects models, we find a statistically significant and negative association between the share of foreigners among CCWs and the native mortality rate attributable to care institutions. However, when applying causal inference methods, the causal effect remains inconclusive. We further examine heterogeneous associations and obtain several noteworthy findings. In addition, pathway analyses suggest that the negative association between the share of foreigners among CCWs and native mortality rates is more likely driven by improvements in the quality, rather than the quantity, of care workforce human capital. Overall, our findings indicate that the employment of foreign CCWs is associated with improved health outcomes for native residents, thereby supporting the continuation of Japan's immigration policy of admitting foreign CCWs in the care sector--a field facing an increasingly severe labor shortage.