International Labour Migration

This paper traced the labour flows in and out of Hong Kong since the second world war using a human capital theory framework. It is shown that most of Hong Kong's history was marked by an inflow of economic migrants. Even as a wave of politically induced emigrants emerged in the 80s the inflow of economic migrants and workers on employment visas continued, underlining Hong Kong's increasing prosperity and contributing toward that prosperity at the same time. Because of changes in immigration regulations the number of immigrants from China dropped drastically in 1980 and further in 1983. Together with underlying demographic trends and emigration, these changes precipitated the serious labour shortage that emerged after 1987. Recently the government has relaxed its restrictions on importing labour. Yet the current labour importation scheme is fraught with many pitfalls. A per-head levy on imported labour, plus a more flexible immigration policy, are found to offer a far better longer-term solution to the secular labour shortage problem in Hong Kong.