Labor market segmentation, complementarity, and the politics of foreign workers: evidence from Macao

This paper investigates the relationship between foreign workers and local employment in Macao challenging the traditional “job displacement” story through a novel theoretical framework—the Segmentation-Complementarity-Mobilization (SCM) model, that conceptualizes the symbiotic yet politically contested relationship between foreign workers and local employment. Using a mixed methods approach combining 26 years of administrative data (1999-2025), content analysis of 500+ media reports, and quasi-natural experiment using COVID-19 as an exogenous shock we demonstrate that anti-foreign worker sentiment is primarily targeted non-professional workers (82.1% of total foreign workforce) in spite of their complementary rather than substitutive relationship with local employment. We show that political mobilization against foreign workers is not actual labor market competition, but the intersection of economic anxiety, identity threat and political framing. The study contributes to migration studies by theorizing the “segmented complementarity paradox” and provides policy insights for small open economies managing labor mobility in an uncertain economy.