Immigration and the Economy of Hong Kong

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Since 1995, immigration has been adding more people to the population of Hong Kong than natural increase each year. Is there any adverse economic impact of immigration on Hong Kong? The authors examine the effect of immigration on wages and employment in the local labour market.
Pub. Date
Sep 1, 1998
196 pages
152 x 229 mm

Foreword by the Series Editor

It is common knowledge that Hong Kong is a society of immigrants. A large proportion of its residents have come from elsewhere. In particular, immigrants from the Mai

Foreword by the Series Editor

It is common knowledge that Hong Kong is a society of immigrants. A large proportion of its residents have come from elsewhere. In particular, immigrants from the Mainland provinces of China make up a major segment of society, currently accounting for over 30 percent of the population. Throughout the past 50 years, there has been significant synergy between immigrants from the Mainland and the development of the Hong Kong economy.

The population of Hong Kong increased rapidly after the Second World War. This increase has been largely caused by inflows of immigrants from Guangdong and other regions of China. Yet, the sharp rise of population has not impeded economic growth in Hong Kong at all. Instead, immigrants has supplied the much needed labour force for Hong Kong's miraculous economic growth.

What are the salient socio-economic characteristics of the Mainland immigrants — education background, productivity, and labour force participation ratio? Are there significant differences between earlier and recent immigrants? Given their large numbers, how have they affected the local labour market in respect of wages, job opportunities and income distribution? How have they performed individually as employers and as employees?

Answers to these questions are necessary for our good understanding of Hong Kong: of its labour market in particular and of its economy and society as a whole. It is the purpose of this book to deal with these issues in analytical depth.

Immigrants are not just a productive labour "input" in economic activities. They are individuals from families and their inflow entails many changes to human relations in both Hong Kong and the communities where they come from. All Hong Kong residents, as well as potential immigrants, are directly and indirectly influenced by our immigration policy.

Immigration from the Mainland is defined by an immigration policy stipulated by agreements between the Hong Kong Special Administration Region and the Mainland. Changes in immigration policy would affect directly the socio-economic characteristics of immigrants to Hong Kong, which would in turn affect the role of immigrants in the local economy. This book investigates the prevailing immigration policy from the point of view of the economic development of Hong Kong. Some concrete proposals for improvement of the policy are made.

The authors of this book, Professors Lam Kit Chun and Liu Pak Wai, are scholars in labour economics. They have done a lot of research and published many studies on immigration and the Hong Kong labour market. Their understanding of the issues is thorough and their arguments are based on economic theory and empirical evidence. This book is an authoritative study and is a necessary reference for informed discussion on the subject.

Y. F. Luk
School of Economics and Finance
The University of Hong Kong
1. Introduction
2. A Brief History of Chinese Immigration in Hong Kong
3. Current Issues of Chinese Immigration in Hong Kong
4. Characteristics of Chinese Immigrants
5. Immigration, Population Growth, and Labour Supply
6. Economic Consequences of Immigration
7. Economic Performance of Immigrants in Hong Kong
8. Immigration and Earnings Inequality in Hong Kong
9. Immigration Policy of Hong Kong: Assessment and Proposed Changes
Appendix A: Earnings Regression of Hong Kong Natives and Immigrants
Appendix B: Decomposition of Earnings Inequality
Appendix C: Human Capital Model of Earnings Inequality