Authors: Jongkwan Lee, Giovanni Peri, and Hee-Seung Yang

As workforces in high-income countries age and shrink, immigrants increasingly fill entry-level, low-skilled jobs. We examine what happens when this labor supply is abruptly reduced, exploiting South Korea’s sudden suspension of its low-skilled guest worker program following the 2020 COVID-19 border closure. Using policy-driven variation in firms’ pre-pandemic reliance on immigrant labor, we show that the collapse in inflows led to a significant increase in firm exit. Among surviving firms, greater pre-pandemic dependence on immigrant workers resulted in production disruptions and operational delays. Firms did not respond by expanding domestic hiring to replace missing guest workers. Instead, they adjusted by reallocating incumbent Korean employees toward lower-skilled tasks, contributing to occupational downgrading and significant wage declines. These findings suggest that low-skilled immigrant workers were not easily substitutable in the short run and that tighter immigration constraints can impose substantial adjustment costs on both firms and native workers.

Authors: Jongkwan Lee, Yujeong Lee, and Hee-Seung Yang

Can allowing foreign guest workers to stay semi-permanently in the host country help relieve labor shortages? This study examines the impacts of enabling a stable stay for foreign guest workers on local job vacancies and labor productivity. We exploit the introduction of the E-7-4 visa system in South Korea, which allows temporary immigrant workers to transition to a stable residency status. Using an event study design that leverages variation in districts’ pre-policy exposure to the program, we find that the policy alleviated labor shortages in agriculture and low-skilled manufacturing—sectors facing significant labor shortages. Furthermore, we show that extending the stay of guest workers improves labor productivity, driven both by positive self-selection into the new visa status and by workers’ increased participation in job training programs, which raise their chances of obtaining the visa.

Authors: Seoyoung Kwon, Jongkwan Lee, and Joan Monras

High-skilled migration programs exist around the world in the hope that immigrants complement native workers, allow firms to grow, and boost innovation. We study the effect of one such program by exploiting the 2016 extension of the Optional Practical Training (OPT) program, which significantly prolonged the work authorization period for international STEM graduates. Using a synthetic difference-in-differences approach, we find that the policy successfully increased the local supply of high-skilled immigrants in exposed Commuting Zones. This local inflow stimulated firm creation and the demand for native high-skilled workers. The program might have also boosted innovation in certain sectors and startup investment, especially in Commuting Zones hosting top-ranked universities, where, overall, the effects tend to be larger.

PI: Younga Kim · Co-PI: Sunjeong Oh

Tracks long-run labor market trajectories of young adults from international-marriage families using longitudinal panel data. 

PI: Keungoui Kim · Co-PI: Jisoo Hur

Tests whether relocating to Korea generates knowledge gains beyond what remote international collaboration achieves. 

PI: Seung Yeon Jeong · Co-PI: Jihwan Shim

Estimates how E-9 guest workers respond to the 2023 E-7-4 conversion expansion and its fiscal implications. 

PI: Han Il Chang · Co-PIs: Beomsub Park, Byungha Lee, Dongkyun Lim

Compares assimilation vs. multiculturalism models through incentivized cooperation games with 576 participants. 

PI: Eunseong Ma

Quantifies how immigration scale and composition shape growth, inequality, and social insurance finances to 2070. 

PI: Hyejin Kim · Co-PI: Jongkwan Lee

Tracks immigrant convergence with natives in earnings, employment, and social insurance using linked administrative registers. 

PI: Jongkwan Lee · Co-PI: Yunji Choi, Hyuncheol Bryant Kim, and Seung-Hun Lee

This study examines whether an increase in foreign worker supply enables firms to expand in Korea’s shipbuilding industry. Using a policy-driven labor supply shock, it investigates how greater access to foreign workers affects firm employment, hiring, and wages.

PI: Jongkwan Lee · Student author: Jaehyeok Lee

This study examines whether Korea’s F-2-R visa encourages international students to remain in designated regions after graduation. It evaluates the policy’s effects on foreign graduates’ settlement and employment, as well as local labor markets and economic activity.

PI: Jongkwan Lee · Co-PI: Youjin Hahn · Student author: Yebin Lee

This study examines how the healthy immigrant effect varies across visa categories in Korea. It compares immigrants’ health with that of the native-born population and investigates how these differences evolve with time since migration

PI: Jongkwan Lee · Co-PI: Hyojung Lee

This study examines how labor immigration affects native residents’ mobility, marriage, and fertility in South Korea. Using policy-driven expansions of the E-8 and E-9 visa programs, it investigates how immigrant inflows shape population retention and family formation in a society facing low fertility and population aging.