Quantitative modeling finds that expanded temporary labor migration offsets demographic drag in the Republic of Korea, indicating immigration is necessary to prevent economic stagnation.
The Republic of Korea (ROK) faces an economic crisis driven by rapid population aging, approaching negative economic growth. I quantitatively examine the full range of policy responses and find that enhanced temporary labor migration is necessary, sufficient, and feasible to offset demographic drag. It is necessary because no other policy channel (including capital accumulation, artificial intelligence adoption, elderwork, education, or pronatalism) has the clear quantitative potential to meaningfully offset aging in the best available forecasts. It is sufficient because a rise in noncitizen worker prevalence from 3% to about 14% over 4 decades would offset most of the demographic drag on economic growth in the ROK. And it is feasible because this trajectory resembles that already experienced by Malaysia and Australia. Many advanced economies will follow in the ROK’s demographic footsteps and have much to learn from its decisions.
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Michael A. Clemens (2026) studied this question.
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