Guest worker policies for the twenty-first century.

Abstract

Guest or foreign worker programs exist to add workers to a country's labor force without adding permanent residents to the population. The rationale for guest worker programs has changed, however, from coping with macro or sectoral labor shortages in the 1950s and 1960s, to filling specific job vacancies in the 1990s. This paper reviews the rationale for and evolution of macro guest worker programs in Germany and the US during the 1950s and 1960s, as well as the micro guest worker programs developed over the past decade. A widening gap exists between the growing need for detailed and credible labor market information to administer the new micro programs when governments are reducing their presence in labor markets. It may therefore soon become difficult to avoid the traditional problems associated with guest worker programs, such as the distortion of economic sectors which become dependent upon foreign workers, and the settlement of some foreign workers.