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Migration or stagnation: Aging and economic growth in Korea today, the world tomorrow

Author

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  • Michael A. Clemens

    (Peterson Institute for International Economics)

Abstract

South Korea faces an unprecedented economic crisis driven by rapid population aging, as it approaches a future of negative economic growth. This paper examines the full range of possible policy responses with the potential to restore dynamism to the Korean economy. Contrary to many prior analyses, the author finds that enhanced labor migration to Korea is necessary, sufficient, and feasible. Migration is necessary because in the best forecasts we have, no other class of policy has the quantitative potential to meaningfully offset aging. Migration is sufficient because enhanced temporary labor migration by itself would offset most of Korea's demographic drag on growth over the next 50 years. And migration is feasible because the levels of migration and timescale of the transition would resemble that already carried out by Malaysia and Australia. Many advanced economies will follow in Korea's demographic footsteps in decades to come, and have much to learn from the decisions that the Korean government makes now.

Suggested Citation

  • Michael A. Clemens, 2024. "Migration or stagnation: Aging and economic growth in Korea today, the world tomorrow," Working Paper Series WP24-18, Peterson Institute for International Economics.
    • Handle: RePEc:iie:wpaper:wp24-18
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    More about this item

    Keywords

    Migration; South Korea; Labor; Demography; Economic Growth; Population Aging;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • K37 - Law and Economics - - Other Substantive Areas of Law - - - Immigration Law

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