More immigrants needed to maintain growth
The Korea Economic Research Institute has argued that the Korean government should look into expanding the number of immigrants in order to soften the economic blow expected to be caused by the shrinking population.
The report argued that in order to keep a working population between the ages of 15 and 64 at the same level as in 2017, which is expected to be 37.2 million, Korea must bring in more foreign workers.
It said the population that is able to actively participate in the workforce will start falling in 2017 and by 2040, the number of working people will shrink to 56 percent of the population, down from more than 70 percent now.
If Korea’s demographic trends continue with their current momentum, the nation’s potential GDP growth will stay in the 3 percent range in the early 2020s, but it will fall to 1 percent or less in the late 2050s.
“Once the productive population starts to shrink, potential growth will fall continuously,” said Cho Kyung-yup of the Korea Economic Research Institute. “Once it falls it will be difficult to raise the growth back up.” Cho said Korea has no choice but to expand its immigrant workforce.
The report added that increasing the population of foreigners is also crucial to reducing the financial burden of elderly people. A shrinking population will also affect the government’s coffers as it will collect less on taxes.
The institute said that to raise potential growth by at least 1 percentage point will take 1.66 million immigrant workers.
By 2030, the accumulated number of immigrant works should be 9.23 million and that number should be up to 14.79 million in 2050 and 17.22 million by 2060.
To keep the population that is capable of production similar to the level in 2017, which is estimated to be about 37.16 million people, 605,000 immigrants will be needed by 2020. The figure should reach at least 4.27 million by 2030.
When the working population drops to below 30 million in 2040, the number of immigrant workers should be at least 8.29 million in order to keep potential growth above 3 percent.
The report by the Korea Economic Research Institute said the government should set up a committee to focus on creating long-term policies that will bring foreigners to Korea to work.
Currently, 1.7 million foreigners live in Korea, including 594,400 came here to work and 268,000 who are either Korean decedents or who have dual citizenship.
BY PARK SU-RYON [email@example.com]
More in Economy
Gangbuk beats Gangnam
600,000 jobs added last year, but many public or welfare
Consumer price gains pick up speed in November
Life expectancy up 7 months for Koreans born in 2019
OECD knocks tenth of a point off Korea's 2020 growth