hankyoreh

President Yoon Suk-yeol of South Korea shakes hands with Prime Minister Fumio Kishida of Japan following a joint press conference held after their summit in Tokyo on March 16. (Yonhap)

Michael Kremer, a professor of economics at the University of Chicago and Nobel economic prize laureate, suggests immigration as a solution to South Korea’s population problem. Allowing special visa programs for non-nationals to engage in care work would have a positive effect on the economy with few side effects.

Kremer met with reporters at the 2023 Asian Development Bank annual meeting held on Tuesday in Songdo, Incheon.

“The low birth rate and low female participation in the labor force are big challenges for the South Korean economy,” Kremer said. He argued that while a number of comprehensive policies are needed, one that has already been adopted by other countries is immigration.

The economist went on to add that when it comes to general migration, “political obstacles” may exist, but some special migration programs “are less likely to raise concerns about crime or cultured change than other types of migration.”

Referring to the examples of Hong Kong and Singapore, he argued that encouraging immigration in specific fields could remedy Korea’s low birth rate problem in addition to encouraging highly skilled women to participate in the workforce.

The argument is that opening up immigration for occupations like household work and care work would help increase the overall labor force and allow women to enter the labor market free from the burden of childcare.

Kremer explained that while some argue that there is a cost, if women who have had career breaks due to caregiving are able to work, it could lead to increased fiscal revenues, including tax generation.

Kremer is known for his O-ring theory of economic development, which was inspired by the failure of the 1986 US Challenger launch. Named for the fact that the launch failed due to a small “O” shaped ring, which connected two parts, the theory posits that errors or failures in even the smallest of sectors can lead to major disasters.

When asked about South Korea’s weakest link at the press conference, Kremer said that the South Korean economy grew rapidly at a certain time, but it seems to be a different case now, referring to the low birth rate and low rate of women’s participation in the labor force.

By Cho Hae-yeong, staff reporter

Please direct questions or comments to [english@hani.co.kr]