Borrowed Hands: Low-Skilled Immigrant Impact on Eldercare Capacity and Quality in South Korea

• In Event: Resettlement, Integration, and Labor Market Adaptation

Abstract

Advanced economies have quietly turned to immigrant labor to staff a widening eldercare workforce gap. Yet recent tightening of low-skilled visa pathways — across the US, UK, and much of the OECD — threatens this supply precisely as aging accelerates. Will these visa restrictions cost eldercare systems capacity and quality? I provide the first causal evidence on both margins using South Korea's care-worker visa opening as a natural experiment.
South Korea offers an unusually clean setting for this question. Roughly half of the personal caregivers in Korean long-term care hospitals (LTCHs) are immigrants, predominantly ethnic Korean diaspora workers who entered through the H-2 and F-4 visa categories opened in the mid-2000s. Three features sharpen identification: universal health insurance provides patient-level longitudinal records that reduce sample-selection and under-reporting bias; pre-reform exclusion of foreign workers from the care sector creates a sharp discontinuity; and ethnicity-specific visa policies generated arguably exogenous supply shifts at the county level. To my knowledge, this is the first causal evidence outside the United States, and the first to identify both capacity and quality margins — a distinction central to visa-policy design.
My main identification strategy is a Bartik-style shift-share instrument that interacts pre-reform county-level immigrant settlement shares with national-level changes in ethnic Korean migrant stocks by country of origin. I define treatment intensity as the estimated ratio of care-eligible ethnic Korean immigrants to the native elderly population, which directly captures eldercare labor supply relative to local demand. For outcomes with lagged treatment responses — such as facility counts where opening a new facility can take years — I supplement the SSIV with a continuous-treatment difference-in-differences design, defining exposure by interacting pre-reform county-level immigrant shares (by country-of-origin) with the average country-of-origin composition of H-2 and F-4 visa holders.
Outcomes come from the Korean National Health Insurance data — a universal-enrollment administrative claims database. Capacity outcomes include facility counts, bed capacity, and staffing levels at the county level. Quality outcomes are patient-level: falls, pressure ulcers, multiple care-related infections, length of stay, and mortality.
Preliminary estimates of the supply response are encouraging. Using the SSIV at the county level, a 1-percentage-point increase in ethnic Korean care-labor exposure raises net LTCH counts by 0.15 per 10,000 elderly — roughly a 10-percent increase over the mean of 1.6 — with effects persisting at least seven years post-reform. The pattern is consistent with durable capacity expansion rather than a transitory labor-cost effect.
Preliminary patient-outcome estimates at the province level are null to mixed, reflecting substantial within-province heterogeneity that aggregates away at that level. Summer data access will extend the county-level design to patient outcomes; the clean facility result suggests the county-level analysis will be well-identified. The completed paper will inform visa-policy debates now active in the US and other OECD economies confronting the same demographic pressure.

Author

• Julie Kim, University of California, Davis
  Presenting Author