ARE FOREIGN WORKERS RESPONSIBLE FOR THE INCREASING UNEMPLOYMENT RATE IN TAIWAN?

comments. Are Foreign Workers Responsible for the Increasing Unemployment Rate in Taiwan? This paper investigates the current important issue in Taiwan that the irnpact of foreign workers on the rising unemployment by a dynatnic inter-teniporal gerleral equilibriuir~ model. The results show that the introduction of foreign workers plays a cornplernentary role and reduces unemployment rate at the early stage, defined as the first period after the shock. However, over time, the importation of foreign workers robs jobs from local unskilled labor and l~fts the unemployment rate. In contrast to existing literature, this paper supports the view that immigration increases the ui~etnploytnent rate for nationals in the long run. An appropriate policy regarding foreign workers for a small open economy like Taiwan needs to consrder the state of the global econorny. By considering the current ambiguity of world econonlic recovery and the high unemployment rate, a cautious policy for the Council of Labor Affairs to adopt is to maintain the current level of imported foreign workers.