The Research On Impact Of Foreign Direct Investment On The Labour Market In The Laos P.D.R

In 1986,Lao government has set a goal of releasing from the Least Development Countries(LCDs)in 2020,since then,with implemented the "open door" policy under which Laos has strengthened the international communication and became a member of Association of South East Asia Nation(ASEAN),World Trade Organization(WTO),ASEAN Free Trade Area(AFTA),ASEAN Economic Community(AEC),and others international organizations.In order to attract the foreign investments and advanced technologies from abroad,Lao government had issued many related laws,regulations and preferential policies,established some special economic zones,strengthened the infrastructure construction and created a good investment environment.As backbone of the economy,foreign direct investment not only plays an important role in economic growth,employment and rapid economic development of Laos,it also brought capital,technology,advanced management philosophy and created a large number of employment opportunities in Laos.Foreign direct investment has great impact on labor market of Laos;therefore,it is of great practical significance to study how foreign direct investment affects the labor market in Laos and whether it can ease the employment tension in Laos.From theoretical and empirical aspects,this paper analyzed the impact of foreign direct investment on labor market,problems existing in the use of foreign direct investment and impact of foreign direct investment on employment in Laos.In the study,it was found that foreign direct investment have provided more and more employment opportunities,the number of employed people in foreign enterprises had taken an important proportion of total employment,which indicated that foreign direct investment has great effect on employment in Laos.Most foreign direct investment projects Laos introduced are invested in industries such as timber,mining and hydropower,which resulted in the economic development of Lao lean heavily on natural resources,as well as labor market imbalance.Besides,linear regression analysis was also used to analyze the impact of foreign direct investment on labor market in Laos.According to the time series data of Laos in 1987-1915 to analyze the impact of foreign direct investment on employment rate,the study also examined the relationship between employment ratio(general population and youth population)and foreign direct investment.Empirical results showed that foreign direct investment has an important positive impact on general population and young people,which indicated the increase in foreign direct investment is positively related to higher employment rate,when foreign direct investment increased by 1%the employment rate will increase 0.1786%,the study found that education also has a great impact on employment,when education increased the employment rate increases.In addition,it was found that domestic investment has little contribution to employment,while government spending has a positive impact on employment.According to the study,this paper provided some counterproposals for Laos to make good use of foreign direct investment to improve its employment level in future.