The relationship between immigration and labour market performance in Sabah’s oil palm plantation sector

Abstract

The main objective of this paper is to analyze the relationship between immigration and labor market performance in Sabah region's oil palm plantation industry. The labour market performance refers to the wages and employment of local workers in the oil palm plantation sector. The relationship of these variables can be in short run or/ and in the long run. This study uses Vector Error Correction Model (VECM) to examine the relationship between the immigration and labour market performance. In fulfilling this study, Johansen cointegration test is used to determine the relationship among the variables - immigration, employment and wages. The data are collected from the Department of Statistics Malaysia, Labour Department, Farmers’ Organization Authority Malaysia, National Archives of Malaysia and Sabah Agricultural Department over the past 31 years. The result shows that there is a relationship between immigration and employment of local workers in short run and long run. While, there is no relationship between immigration and wages either in short or long run.