Race, Religion and Skilled Labour Immigration Chuie Hong Tan 1 Race, Religion and Skilled Labour Immigration: The Case of Malaysia ABSTRACT There have been a number of studies on microeconomic and macroeconomic determinants of migration, but few discussed on the race and religion factors on skilled labour immigration. This paper makes contribution toward filling this void by examining how religion influences the skilled labour immigration flow into Malaysia. Specifically, the sharing of religious cultures enables the formation of exchange networks that can overcome the failure or non-existence of the social and economic institutions for affecting the flow of skilled labours into Malaysia. The determinants of immigration are analysed with pooled cross-country and time series data on skilled immigration into Malaysia from 39 countries during 1998-2004. Results demonstrate clearly the sharing of Muslim, Buddhist and Hindu culture by three major races which are the Malays, Chinese and Indians in Malaysia has a significantly positive influence on the inflow of skilled labour immigrants. Keywords : Skilled labour migrants, religion, race, Malaysia
Race, Religion and Skilled Labour Immigration Chuie Hong Tan 2 EXTENDED ABSTRACT INTRODUCTION Malaysia is an important destination country for skilled migrants, particularly from South Asia and East Asia. Its multicultural society, political stability, better infrastructure and consistent economic growth create a pull of migrants towards the country. In Malaysia, the flows of the skilled migrant labour are associated essentially with the development of international business, transnational corporations and banks, and the transfer of government officials and international civil servants of one type or another. One specific way in which are race and religion can influence the pull of international skilled migration is through its network effects. The sharing of religious beliefs by adherents of the same religion living in different countries can create network of trust and familiarity that facilitate living and culture. Sociologists in particular have studied how social networks and similar religion facilitate immigration, for example Coleman (1998), Podolny (2001) and Macy and Skvoretz (1998). Religion fosters or frown social behavior, and therefore, an important institution that exercises control over beliefs and behaviours (Kennedy and Lawton, 1998). LITERATURE REVIEW In economics, the literature on networks has developed rapidly in recent years. Gould (1994), Head and Ries (1998), and Rauch and Trindade (2002) described
Race, Religion and Skilled Labour Immigration Chuie Hong Tan 3 specifically how networks of immigrants and ethnic diaspora stimulate trade between the countries. People who share a certain religious culture may be able to overcome some informational and reputational barriers to international exchange, thereby increasing international migration flow and promotes businesses between two countries. Drawing on Malaysia s recent experience with immigration, this paper analyses the importance of religion in general and religion network in particular by empirically testing the hypothesis that sharing a particular religious culture helps to build networks linking skilled labours in different countries. In the context of Malaysia, race and religion are interconnected. The Malays are regarded to practice Islam, the Chinese practices Buddhism while the Indians practices Hinduism. Those who share similar religion tend to mingle together. Hence, religion is chosen to represent the three major races in Malaysia as the information for religion is ubiquitous in all countries and this will substantiate the data. METHODOLOGY AND DATA This study is concerned with the determinants of skilled migration into Malaysia from 39 countries during the period 1998-2004. The dependent variable M i is the number of skilled immigrants to Malaysia from country i in year t. By pooling time series data for 39 countries, we can discriminate between the effects of migration determinants on the skilled labour immigrants, thus maximizing the identifying power of the sample.
Race, Religion and Skilled Labour Immigration Chuie Hong Tan 4 Several variables such as volume of population, relative per capita income, literacy rate, growth of Malaysian unemployment rate and Malaysian annual manufacturing sector wage growth rate were identified as determinants of skilled labour immigrants. The five variables were selected from a large number of institutional variables used in recent research (Pedersen et al. (2004), Karemera et al. (2000) and Gross and Schmitt (2003)). To quantify the cultural influence of religion, we construct variables that quantify the sharing of the beliefs, rituals and rules of major religions across pairs of countries. The three major religions practiced in Malaysia are Islam, Buddhism and Hinduism which represent the three major races in Malaysia. EMPIRICAL RESULTS Using the average pairwise measure of shared religious beliefs, the more people from a pair of countries share Muslim, Buddhist and Hindu, the greater is the volume of skilled labour immigrants among the two countries. The relative per capita income, population variable and change in Malaysian unemployment rate are significant. Literacy rate variable has a positive coefficient and is significant at 0.01 level. Migrants who come from country with a high literacy rate are likely to move. Malaysian annual manufacturing sector wage growth rate is however insignificant. The results for the multiplicative pairwise measure of shared religious beliefs are very similar to the average pairwise. However, the coefficients for the average pairwise measure reveal a higher value as compared to the latter. The elasticity of the skilled
Race, Religion and Skilled Labour Immigration Chuie Hong Tan 5 labour immigrants increases when the average pairwise for sharing the Muslim, Buddhist and Hindu between two countries increases. This study suggests that the cultures of Muslim, Buddhist and Hindu encourage trust and positive network effects in attracting skilled labour immigrants. The empirical results in this study strongly suggest that religion does indeed influence skilled labour immigrant s behavior and decision to migrate and work in a foreign country. REFERENCES [1] Coleman, James, S. (1998). Social Capital in the Creation of Human Capital. American Journal of Sociology 94: S95-S120. [2] Gould, D. (1994). Immigration links to the home country: Empirical implications for U.S. The Review of Economic and Statistics, 76(2), 302-316. [3] Gross, D. M., and Schmitt, N. (2003). The role of cultural clustering in attracting new immigrants. Journal of Regional Science, 43(2), 295-318. [4] Head, K., and Ries J. (1998). Immigration and trade creation: Econometric evidence from Canada. Canadian Journal of Economics, 31(1), 47-62. [5] Karemera, D., Oguledo, V. I., and Davis, B. (2000). A gravity model analysis of international migration to North America. Applied Economics, 32, 1745-1755. [6] Kennedy, E. J. and Lawton, L. (1998). Religiousness and business ethics. Journal of Business Ethics, 17(2), 163-175.
Race, Religion and Skilled Labour Immigration Chuie Hong Tan 6 [7] Macy, M., & Skvoretz, J. (1998). The evolution of trust and cooperation between strangers: A computational model. American Sociological Review, 63: 638 660. [8] Pedersen, P. J., Pytlikova, M., and Smith, N. (2004). Selection or network effects? Migration flows into 27 OECD countries 1989-2000 [Online] (IZA Discussion Paper No. 1104). Available at http://www.iza.org [2004, April 27]. [9] Podolny, J. M. (2001). Networks as the pipes and prisms of the market. American Journal of Sociology, 107(1): 33 60. [10] Rauch J. E., and Trindade V. (2002). Ethnic Chinese networks in international trade. The Review of Economics and Statistics, 84(1), February, 116-130.