Foreign labor cannot halt Korea’s demographic slide: study

Foreign workers harvest potatoes in Gangneung, Gangwon Province, July 23. Yonhap

Korea is increasingly relying on foreign workers to counter its shrinking population, a problem especially acute in rural areas, but a new study warns that the approach has its limits as the domestic population continues to decline.

A recent report from the National Assembly Budget Office found that foreign residents now account for a rising share of Korea’s population and are spreading well beyond the greater Seoul area.

But experts, including Lee Sang-lim, a researcher at the Korea Institute for Health and Social Affairs, are quick to warn that this demographic stopgap provides no fundamental solution, arguing that the limited economic input and tax contributions of temporary workers restrict real local growth.

“Foreign residents in regional areas may slow the pace of population decline, but they are far from a fundamental solution,” Lee said.

The number of foreign residents climbed to 2.58 million last year, pushing up their share of the population from 3.4 percent in 2015 to 5 percent in 2024. Over the same period, the resident registration population — which excludes non-Koreans — peaked at 51.85 million in 2019 and has since declined by roughly 630,000.

Of the country’s 229 municipalities, 211, or 92.1 percent, saw their foreign populations grow between 2019 and 2024.

The shift has been especially stark beyond the greater Seoul area, where the share of foreign residents outside Seoul, Incheon and Gyeonggi Province climbed from 40.6 percent in 2019 to 43.3 percent in 2024, underscoring how rapidly demographic decline is transforming all corners of Korea.

Farmers and foreign workers harvest cabbages in Gangneung, Gangwon Province, Monday. Yonhap

Areas considered at risk of extinction — where the population aged 65 or older is at least double the number of women ages 20 to 39 — saw an even sharper rise in foreign residents. Of the 130 such regions, 35 recorded increases of more than 50 percent between 2019 and 2024.

The report noted that in areas with shrinking native populations, foreign residents sustain local labor, consumption and service demand, effectively offsetting the loss of working-age locals.

The government is using this shift to counter population decline, expanding the role of foreign inflows from filling labor gaps to bolstering regional economies.

In 2022, the Ministry of Justice introduced the region-specific F-2-R visa to reflect local labor needs. The following year, it named economic and regional development through immigration as a goal in its Master Plan for Immigration Policy.

That approach extends to caregiving, a pressing need in a country that became super-aged last year, with people 65 and older surpassing 10 million and accounting for more than 20 percent of the population.

Last June, the government opened elder care jobs to foreign graduates of Korean universities. This year, it designated 24 universities to train foreign caregivers and plans to run the pilot program from 2026 to 2027.

Despite the rise in foreign residents and increase in related policies, the National Assembly Budget Office report warned that foreign inflows may have limited impact in regions where the native population is shrinking, noting that long-term growth prospects are rare in the areas.

According to the study, relying on temporary foreign workers stabilizes current production in agriculture and manufacturing, but fails to attract the highly trained labor necessary for industrial upgrading or to establish permanent households needed to boost regional consumption.

Lee at the Korea Institute for Health and Social Affairs said that because most foreign workers in regional areas come primarily to earn money, their spending in Korea tends to remain relatively low, resulting in limited contribution to local economies.

“It’s also difficult to see foreign residents in regional areas as fully settled,” Lee added. “And because their tax contributions are relatively limited, they should be regarded as a supplementary presence in population decline, not a driver of regional revitalization.”

The report also noted that even if foreign workers help offset labor shortages in the short term, their contribution to growth is limited in regions where the native population base has weakened along with local demand and industrial activity.

It also stressed that lasting growth requires a shift away from depending on labor that requires less training and toward immigration policies that strengthen technological capacity and drive industrial upgrading.

As of 2024, just 15.6 percent of the roughly 547,000 foreign workers with employment visas were classified as “skilled,” while 84.3 percent were categorized as “low-skilled.” In metropolitan cities, the skilled share was relatively higher, but in most other regions low-skilled workers made up more than 80 percent.

“To ensure foreign inflows genuinely support regional revitalization, further research is needed on how to strengthen the underlying regional economic structure,” the National Assembly Budget Office told The Korea Times.