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In this Explainer, find out…
How have Singapore’s immigration policies evolved since independence?
How does Singapore control the number of foreigners in our workforce today?
What are the economic impacts of Singapore’s immigration policies?
Introduction
Singapore’s history is closely linked to immigration. For most of its history, Singapore's population growth has predominantly come from immigration rather than natural births. This influx of people has been critical, ensuring the nation's development and prosperity while creating a unique socio-cultural landscape.
This Policy Explainer is the first of a two-part series delving into the pivotal role of immigration in shaping the fabric of Singapore. It will trace the evolution of Singapore’s immigration policies over the years, explain how today’s immigration policies are designed, and discuss the economic impacts of these policies on modern-day Singapore.
In the next instalment, we will investigate how the same immigration policies have shaped Singapore’s culture, incorporating the perspectives of both Singaporeans and immigrants. Finally, we will explore possible future directions for Singapore's immigration policies.
Singapore's Immigration Policies Through The Years
Immigration has been a cornerstone of Singapore’s growth since its founding in 1819. Throughout its years as a British colony, immigrants acted as a key source of labour for Singapore. Economic activities such as trading, rubber cultivation, and public works all depended on migrant labour. This demand for labour, coupled with a steady supply of migrants from China, India, and the Malay Archipelago, contributed to Singapore’s rapid population growth till its independence in 1965.
Singapore’s immigration policies evolved drastically between 1970 and 1990. During this period, the ratio of Singaporeans to migrants in low-skilled work hovered around one-to-one. This became a cause of concern for the Government; they feared that migrants were less invested in Singapore, and thus, less willing to contribute to the nation’s long-term prosperity. Consequently, the Government recalibrated its immigration policies to create a majority-Singaporean workforce. This was achieved through various means, such as making a pathway for work permit holders to become Permanent Residents, and ultimately, Singaporeans.
1990 was a major turning point for Singapore’s immigration policies. As Singapore lost its comparative advantage in low-cost manufacturing to less-developed economies, the Government recognised a need to attract high-skilled migrants to catalyse Singapore’s next phase of growth. This would be realised through initiatives like scholarships, where high-potential youths from abroad are incentivised to study and work in Singapore.
2009 marked another important year for Singapore’s immigration policies. By then, citizen sentiment towards immigrants had become negative. On the one hand, low-skilled work permit holders received negative attention as they were seen as the cause of wage suppression in the job industry. This was, among other factors, due to their willingness to take lower wages than citizens. On the other hand, high-skilled immigrants were seen as competitors for jobs among educated Singaporeans.
These negative perceptions towards Singapore’s immigration policies led to a backlash in the 2011 General Elections, where the incumbent People’s Action Party recorded their lowest vote share since independence. There was also considerable disapproval of the 2013 Population White Paper, which outlined plans to address Singapore’s demographic challenges — specifically, declining birth rates and an ageing population — by growing Singapore’s foreign population.
In response to the negative reactions, the Government has recalibrated its immigration policies, tightening foreign worker inflows since 2019. We will now turn to some of these policies, which are in effect as of 2024.
Work Passes
All foreigners who wish to work in Singapore must hold a valid work pass. The type of work pass issued depends on various factors, such as the foreigner’s income and qualifications (read more at the Ministry of Manpower’s website here). To simplify our discussion, this Policy Explainer will classify foreigners into one of three categories — high-skilled, mid-skilled, or low-skilled — which proxy their income and qualifications.
For High-Skilled Foreigners
The Employment Pass (EP) and Overseas Networks & Expertise Pass (ONE Pass) are work passes that allow high-skilled foreigners to work in Singapore. Such foreigners earn significantly more than their counterparts, averaging S$9,500 per month, well above the median monthly income of Singaporeans. These foreigners tend to be in managerial or directorship roles too. According to the International Standard Classification of Occupations (ISCO), they would be employed in what are considered Class 1 jobs. The that require either a bachelor's or master's degree.
EP and ONE Pass holders differ in one key respect. EP holders are typically foreign professionals, managers, and executives. Meanwhile, ONE Pass holders are foreigners at the top of their field, such as in business, arts, sports, or research.
For Mid-Skilled Foreigners
The S Pass is a work pass tailored to mid-skilled workers. Such workers are relatively skilled but do not meet the EP criteria. They typically earn around S$3,300 a month, which is equivalent to Singaporeans in the 25th percentile of the income distribution. Their jobs are typically Associate Professionals and Technician Jobs (APTs), also known as ISCO Class 3 jobs. These are considered non-managerial yet highly skilled jobs. Such jobs thus often require some form of technical education.
For Low-Skilled Foreigners
Work permits are work passes targeted at low-skilled workers. These workers undertake labour-intensive jobs in industries like construction, marine shipyards, manufacturing, and services. Low-skilled workers tend to come from countries like Malaysia, India, and Bangladesh, just to name a few. There are no limits to the number of times Work Permits can be renewed.
ATTITUDES TOWARDS HIGH- VS. LOW-SKILLED FOREIGNERS
The variety of work passes in place highlights a key distinction between high-skilled and low-skilled foreigners. This begets drastically differing treatment.
Low-skilled foreigners tend to be viewed as temporary. As part of their temporal nature, they are faced with many strict rules which control their social and economic life in Singapore. This includes mandates that their family cannot be brought to Singapore, compulsory medical screenings, and strict housing conditions. Further, they cannot attain Permanent Resident (PR) or citizenship status unless they become S pass holders.
In contrast, high-skilled foreigners face drastically different treatment. Generally, they are welcomed in Singapore and can attain PR or citizenship status as long as they display their intent to remain in and contribute to Singapore. As such, they encounter fewer tangible constraints, even being encouraged to bring their family to Singapore. This is apparent from the terms of the EP and ONE Pass.
The restrictions placed on low-skilled foreigners relative to high-skilled counterparts implicitly reveal Singapore’s view on each group. High-skilled foreigners are seen as a major asset to the country. Hence, the policy is designed to improve their time in Singapore and encourage them to stay. In contrast, low-skilled workers are perceived as a transient population, filling a need for manual labour that the local population chooses not to engage in.
Singapore implicitly differentiates high-skilled and low-skilled foreigners using the Complementarity Assessment Framework (COMPASS). This tool allows businesses to determine whether a foreigner will qualify for an EP using metrics such as salary, qualifications, diversity, nationality, and shortage considerations (see Figure 1).
Each factor earns one up to 20 points, with 40 points being the minimum to qualify for an EP. The number of points earned depends on how valuable the candidate is relative to their competition. For example, a graduate from a top 100 university based on the QS World University Rankings earns the full 20 points available from qualifications. Separately, if the hiring company employs few foreigners, they can earn the full 20 points. This helps Singapore filter for foreigners who would add the most value to our workforce while ensuring that Singaporeans continue to be hired.
Figure 1: Overview of COMPASS⁶
TRADE-OFFS OF IMMIGRATION POLICIES
All countries that adopt an open immigration policy must weigh various considerations whose importance changes over time. Singapore is no exception. This Policy Explainer delves into the economic considerations that undergird Singapore’s immigration policies. In the next Policy Explainer, we will shift gears and look at cultural considerations.
Positive Economic Impacts
One significant reason for adopting an open immigration policy is the labour market flexibility it offers. Compared to residents, foreigners are more easily replaceable, since their work passes are bound to expire and there is less obligation to retain them. To this end, employers can hire more foreigners during economic booms when labour demand is high. Conversely, during economic downturns, foreigners can be released more swiftly than Singaporean workers, preventing a sharp rise in unemployment among residents. Thus, foreign labour acts as a buffer against economic fluctuations, contributing to greater economic stability in Singapore.
Separately, an open immigration policy also entails lower costs for Singaporeans. Due to the low cost of living in their home countries and the strength of the Singapore dollar, low-skilled foreigners are typically willing to accept lower Singapore dollar-denominated wages. This reduces labour costs for companies, who can pass their savings on to consumers. In turn, Singaporeans have been able to enjoy cheaper goods and services, such as in the food and beverage industry, mitigating the extent of the rising cost of living in Singapore.
Finally, an open immigration policy ensures that foreign labour complements Singapore’s resident labour force. For instance, few Singaporeans are willing to take up low-wage, manual jobs in industries such as cleaning and construction. In such situations, foreign workers fill the gap by taking up these jobs that, while shunned, play a crucial function in our society. Concurrently, Singaporeans may lack the necessary skills and talents for certain high-skilled jobs. This can be ameliorated by hiring foreigners into such roles, thereby complementing the skillsets of locals.
Negative Economic Impacts
Besides the benefits of an open immigration policy, drawbacks also exist. First, foreigners are bound to compete with Singaporeans for jobs, depriving the latter of career opportunities they would otherwise have. Such competition is especially likely when residents and foreigners share similar skill sets, making them substitutes for each others’ labour. Recognising this, Singapore has calibrated its immigration policies over the past years, granting relatively more work permits so that low-skilled labour can complement Singapore’s highly educated resident workforce.
Second, the preponderance of foreign labour also affects Singapore’s productivity. Singapore currently experiences high levels of "labour churning," where foreign workers are frequently replaced when their work permits expire. This short tenure discourages employers from adopting productivity-enhancing measures such as training, exposure, skill development, and experience accumulation. Consequently, foreign workers may not become highly productive members of the workforce. Additionally, companies may rely on cheap foreign labour instead of innovating and adopting new technologies, further hindering productivity growth. Thus, an open foreign labour policy can negatively impact Singapore’s productivity.
Conclusion
As we have outlined, Singapore's immigration policies have been instrumental in shaping the country’s economic outcomes. Over the years, our immigration policies evolved to address changing needs, swinging from an open immigration policy to one that has tightened the flow of foreign labour. Despite the economic benefits of flexibility and lower costs, challenges such as job competition and productivity impacts remain. Future policy directions will need to balance economic imperatives with public sentiment. The next Policy Explainer in this two-part series will explore the cultural impacts of these policies, providing insights into their effects on Singaporeans and foreigners alike.
This Policy Explainer was written by members of MAJU. MAJU is an independent, youth-led organisation that focuses on engaging Singaporean youths in a long-term research process to guide them in jointly formulating policy ideas of their own.
By sharing our unique youth perspectives, MAJU hopes to contribute to the policymaking discourse and future of Singapore.
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