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If the Koreas reunified, the government would face a stark choice. It could try to fill the gap in living standards between North and South, through handouts, public investment and subsidies. Or it could brace itself for heavy migration, as poor Northerners moved to the South in search of higher wages. Germany leaned towards the first option. East German Ostmark wages were converted into West German D-marks at a rate of one to one, then raised by union pressure closer to Western levels. This allayed fears that migrant workers would flood into the West, or that capital would flood out. But it also deterred private investment in the East—except for heavily subsidised property speculation which ultimately failed—and priced many of its workers out of the market.
Michael Funke of Hamburg University and Holger Strulik of the Leibniz University in Hanover are two of the many economists who have studied Germany’s reunification. In 2005 they used the same framework to model the Korean case. Their calculations (which they describe as “rigorous speculation”) illustrate the scale of the problem. To equalise the standard of living in both parts of the country would initially cost over half of the South’s tax revenues. The government could reduce the fiscal burden to 30% of revenues, but only at the cost of receiving 8m migrants, the two economists estimate.

A. 어휘
stark 빳빳한, 삭막한, 완전한. handouts 거지에게 주는 물건, 기부, 油印物(유인물).
subsidies 보조금. brace 버팀대, 支柱(지주) 떠받치다.
brace itself for 대비하다. lean 기울다, 기대다. Ostmark 동독의 화폐단위.
convert 轉換(전환)하다, 환산하다. D-marks 서독의 화폐단위.
at a rate of one to one 1對1의 비율로.
union 노동조합. allay 緩和(완화)시키다. deter 방해하다, 억제하다.
property 재산. speculation 投機(투기).
priced many of its workers out of the market 근로자들에게 일을 못하게 하다.
framework 뼈대, 骨組(골조). calculations 계산.
rigorous 엄격한, 가혹한. equalise 동등하게 하다. initially 최초에.
revenues 稅入(세입).