Impact Of Foreign Direct Investment On The Employment Of Low-Income Labor Force

Affected by the financial crisis, the pace of global economic development has slowed down and foreign direct investment in Jiangsu Province has dropped, causing a huge impact on the labor-intensive industries in Jiangsu Province, driving the low-income workforce with relative low level of education and skill into dilemma of losing their jobs. On the other hand, it seems that the entry of foreign capital can also directly contribute to the increase in total social investment in Jiangsu Province, thus creating more jobs for the region. However, compared to domestic enterprises, foreign-funded companies have higher degree of technology, and therefore such companies require more labors with higher skill levels than those with low skill levels. Therefore, it is necessary to explore the specific impact of foreign direct investment on the employment of low-income workforce. Based on this, this study will first analyze the current situation of foreign direct investment and the employment of the low-income labor force in Jiangsu Province, and will then outline the theories which are about foreign direct investment and the employment of low-income labor force. The next part will do empirical analysis about this problem. According to the empirical results, it is found that foreign direct investment can lead to the decrease in the employment of low-income labors on one hand, while on the other hand, it can also affect the employment of low-income labors by the impact of technology and domestic investment, and the overall effect is negative.