Visiting Nobel Prize laureate James Heckman, said yesterday that Taiwan and China should cooperate in developing their mutual economies.
"There is enormous benefit for Taiwan and China through trade across the strait," said Heckman, winner of the 2000 Nobel Prize for economics.
Replying to the question whether Taiwanese government should or should not impose control measures on trade across the strait, Heckman said that Taiwan and China could "complement each other" through trade.
China is a vast country with huge natural resources, but most of its massive labor force have only limited work skills, whereas Taiwan is just the opposite -- (exemplified in) the creation of a comprehensive education system over the last five decades in Taiwan, he said.
This means that the two could complement each other like in a partnership inside a developing economy, especially with China lagging in new technology. Trade and cooperation can provide huge benefits for both sides across the strait, Heckman said.
Heckman made the comment in a seminar focused on the importance of human capital.
Heckman also suggested a way to deal with Taiwan's unemployment problem of recent years.
"I don't recommend job-retraining for unemployed laborers over 50 years old," said Heckman. "A [short-term] subsidy for the unemployed is a better solution. But in order to provide incentives for the unemployed to get jobs in the future, a [comprehensive] welfare system is not a good idea either," he said.
"It's more cost-effective to retrain younger workers who are in their 20s or 30s, instead of workers who are in their 40s or 50s," said Heckman. "What the government can do for the unemployed workers over 50 is to provide subsidies when these workers find lower-wage jobs. The capital investment should be in young people -- not the aged," he added.
"The welfare system in the US has failed to provide incentives for the unemployed to find jobs. Taiwan should not become another welfare-nation like the US or many of the European countries," he said.