Oral Answer by Minister for Manpower Dr Tan See Leng to PQ on Government Studies

NOTICE PAPER NO. 1751 OF 2023 FOR THE SITTING ON OR AFTER 27 FEBRUARY 2023

QUESTION NO. 4265 FOR ORAL ANSWER

MP: Mr Leon Perera

To ask the Minister for Manpower (a) whether the Government has conducted any studies to determine to what extent, when foreign worker quotas and access to Employment Pass or S Pass holders is tightened, will lead to firms hiring more Singaporeans, firms hiring Singaporeans at higher pay, firms hiring more Singaporeans at higher pay and business failures that lead to net job destruction over the following one year period; and (b) if not, whether the Government will consider studying this and make public the findings.

Answer:

1. To ensure good employment outcomes for Singaporeans, it is important that our polices enable firms to access foreign workers who can complement the local workforce, so that the firms can grow and create more opportunities for locals.

2. To support policy-making, the Government regularly conducts impact assessment studies on a range of policies, including foreign workforce policies. The Government publishes some of these studies every quarter through the Economic Survey of Singapore.

3. One key finding of our internal studies on foreign workforce policies is that tightening access to lower-skilled foreign workers is more likely to have a positive impact on local employment outcomes compared to tightening access to higher-skilled foreign workers. This is because businesses were able to substitute lower-skilled but cheaper foreign workers with locals, and therefore improve production processes accordingly. This has informed our approach of remaining open to high-quality, foreign professionals, while maintaining a disciplined stance in regulating the number of work permit holders through quotas and levies.

4. It is important to note that these studies are just one input to the entire policy-making process. These studies have their limitations. For example, they are unable to account for less quantifiable effects of having foreigners in our workforce, such as knowledge spillovers to locals and other network effects. The impact of the interventions studied might also change if they are applied beyond a certain scale or at a different time period. As such, they need to be interpreted carefully alongside other sources of information, including more recent labour market statistics, as well as industry feedback.