Will ASEAN mutual recognition arrangements induce skilled workers to move? A case study of the engineering labor market in Thailand

Abstract

This chapter assesses the potential impact of one of ASEAN’s mutual recognition arrangements (MRAs) on Thailand’s engineering market. Utilizing data from Thai Labor Force Surveys, regression analysis estimates the probability of Thai engineers engaging in formal employment, and relative wage returns to engineering education and occupations in Thailand. Results show that only one-third of Thai engineering degree holders and only 10 percent in engineering occupations are informally employed. Furthermore, relative wage returns to engineering degrees/jobs is high compared to other degree/job fields, including a 42 percent premium for engineering graduates who match with engineering jobs. Given Thailand’s current labor market conditions and the limited impact of MRAs on reducing migration costs, there is little impetus for most Thai engineers to move to work in other ASEAN countries. However, engineers from the other ASEAN countries might consider working in Thailand, possibly leading to greater competition in the Thai labor market.