The Role of Thai Workers in Taiwan: Changes in Market Share and Competitiveness

The market share of Thai workers in Taiwan decreased from over 90% in 1992 to 49% in 1998, and 17% in 2012. This paper examines the declining significance, as well as the factors and implications of the trend. The factors explored include: (1) demand factors; (2) supply factors; (3) intermediate factors. For both (1) and (2), changes in economic structure and demographic structure are considered. In Taiwan, the completion of major infrastructure projects and the rapid population aging are crucial elements. In Thailand, significant changes might have influenced outflows of workers in general, and outflow to Taiwan in particular. They include (a) remarkable economic growth, (b) significant inflows of population, and (c) emergence of new destinations. This paper utilizes Taiwanese statistics on stock of foreign workers and Thai data on deployment of workers. The Taiwan data suggests a market segmentation, with Thai workers always dominant in construction sector. In other words, Thai workers did not become less competitive. The paper will explore reasons for: (1) why Thai males did not go into manufacturing sector when construction industry shrank, and (2) why females did not get the aged care jobs when demand increased. Thai data reveals an expansion of destinations, but little changes in occupational structure.