Nobel Laureate's Advice: "Immigration System Can Expand Tax Revenue and Raise Wages"

Interview with Michael Kramer, Professor at University of Chicago
"Failure of South Korea's Birth Policy, Refer to Foreign Worker Policies"
Proposes 'Innovation Fund' to Help Elderly and Poor
On ChatGPT Technology: "Will Increase Jobs in the Long Term"

Michael Kramer, Professor at the University of Chicago, USA

Michael Kremer, a professor at the University of Chicago in the United States who won the Nobel Prize in Economics for his research on poverty alleviation, emphasized that “(Korea) can see positive effects through immigration policies, such as expanding tax revenue and raising wages for low-skilled domestic workers.”

On the 25th, Professor Kremer stated this in a preliminary interview with officials from the Korea Development Institute (KDI), the Korea Institute for International Economic Policy, the Korea Institute for Industrial Economics and Trade, and the Korea Institute of Public Finance, in response to the question, “What should Korea focus on to further advance its economy amid a declining working-age population due to low birthrates and aging?” Kremer believes that by accepting foreign workers and deploying them in childcare and elderly care labor, Korea can promote the market participation of highly skilled workers, such as Korean women.

Professor Kremer said, “Korea’s policies to increase the birthrate have not been successful, but advanced countries are expanding their economically active populations through immigration policies,” and advised, “To minimize social concerns about immigration and create positive effects on national finances and welfare, Korea can refer to special visa programs for foreign domestic helpers in Hong Kong and Singapore.”

As a policy tool to assist the elderly or impoverished, he proposed a “Social Innovation Fund.” Professor Kremer explained, “Through the fund, innovative policy alternatives can be discovered, and excellent policies selected through rigorous evaluation and pilot projects can be expanded,” adding, “Governments can verify the social effects of innovative alternatives through innovation initiatives and reflect them in policies.”

"ChatGPT Will Increase New Jobs in the Long Term"

The interview also included discussions on the impact of digital technology. Professor Kremer pointed out, “New technologies developed by advanced countries can help low-income countries,” but also noted, “In low- and middle-income countries, commercial incentives to participate in product and service development are low, so despite social benefits, such initiatives are not pursued.” He said, “Governments can play an important role in promoting private sector investment by providing necessary funding for technology development or promising to purchase after development.”

Professor Kremer continued, “One way to achieve social goals by leveraging private sector creativity is advance purchase commitments,” explaining, “Governments can encourage private sector innovation by promising government-level purchases when new technologies are developed.” He also suggested that governments exercise their authority to promote technological innovation to accelerate technological change.

Regarding recently emerging artificial intelligence (AI) technologies like ChatGPT, he acknowledged that “they can cause social disruption,” but evaluated them as “technologies with tremendous potential to expand overall social productivity and improve citizens’ living standards.” He further predicted, “In the long term, the development of AI will lead to the creation of new types of jobs.”

Meanwhile, Professor Michael Kremer is scheduled to attend the ‘Korea Seminar Day’ event at the ‘2023 ADB Annual Meeting’ starting on the 2nd of next month, where he will have a keynote dialogue with Cho Dong-chul, the president of KDI.

This content was produced with the assistance of AI translation services.