South Korea’s Demographic Challenge: A Declining Nation

South Korea, one of the world’s most developed countries, is facing a major problem, that the country is running out of children. This is a major demographic challenge that will reshape the country’s future. The country is currently experiencing the lowest birth rates in the world, with a total fertility rate of only 0.7, which is well below the population replacement rate of 2.1 and the lowest among OECD countries. This is a significant challenge that many developed nations are likely to encounter in the future, as most have total fertility rates below the replacement level. Therefore, studying this issue is crucial to prepare for similar scenarios. Even countries with large populations, like India, should study this scenario, as our neighbor China is already facing a similar situation of declining birthrates despite being the world’s second most populous nation. India might also find itself in a similar situation in the distant future.

Does It Really Matter

The declining birthrate in South Korea is a matter of grave importance as it would affect the country’s economic stability, social security and growth in future. The birth rate has fallen well below the replacement level, and when coupled with an ageing population and a shrinking workforce, it is leading to a demographic collapse. By 2025, people aged above 65 will make up over 20 percent of the total population, leading to South Korea being classified as a “super-aged society” alongside countries such as Japan and Italy. By 2050, this percentage is expected to rise above 40 percent. This demographic shift will lead to a shortage of labour force in the country which would reduce its economic growth. As time passes, fewer people would enter the workforce and there would be a huge burden upon them to support the elderly population of the country. It could also result in increased taxes on the workforce to support the social welfare system and the pension funds for the elderly population. The falling birth rate could possibly lead to a national security issue, as fewer and fewer young men will be available for military service. It is estimated that the number of men conscripted for mandatory military service is estimated to fall from 2,26,000 soldiers in 2025 to 1,30,000 in 2040. This would drastically reduce the size of active army personnel in the Korean military.

Why is South Korea’s Demography Declining

Several factors contribute towards South Korea’s falling demography. The key factors are the high cost of living, which include high cost of raising children, housing, women being more career oriented, high pressure and stressful work environments and declining marriage rates.

South Korea’s high cost of living can be directly attributed to the concentration of the population in Seoul, its capital. Half of the country resides in Seoul making it the 9th most populous metropolitan area in the world. According to a report by the Bank of Korea, the cost of living in Korea is 55 % more than other OECD countries’ average. This is mainly due to astronomical housing prices. The price-to-income ratio (PIR) stands at 25 in Seoul, which is much more than other major cities such as New York(11) and London(14) and also than the recommended range of 3-5, given by the United Nations. Korea is one of the most expensive countries for raising children. According to a survey conducted by the Korea Institute for Health and Social Affairs, about 37 percent of newly wed couples believe that the monthly cost of raising a child would be between 1 million Won (INR 61,016.46) and 1.5 million Won (INR 91524.69) and this amount would grow as the child keeps on growing due to increased expenditure on private tuitions, sports practices etc. It is estimated that the average cost of raising a child till the age of 19 would be 251 million Won (INR 1,53,16,808.14). As women in South Korea become more career-oriented, they postpone getting married and having a child. They feel that having a child would lead to a career break and the culture in South Korea is such that those who take maternity leave are often forced to leave their jobs or are not considered during promotions. Further South Korea’s traditional family structure places the duties of raising the child and household activities on women, which discourages women from having children. Among the OECD nations, Korea has the highest annual working hours per employee, at 1901 hours, which is 149 hours higher than the OECD average. Along with this, Koreans working long hours hurts the country’s birth rate.

What Can Be Done to Fix It

To fix South Korea’s demographic decline, we have to address all the factors discussed above simultaneously. A multifaceted strategy is essential, as addressing only one of the root causes will not solve the problem. There is a need for economic incentives, cultural shifts, and policy reforms. The first step in fixing this issue would be to provide financial incentives to families and address the high cost of living. The government currently provides direct financial support to families during maternity and beyond. However, the allowance should be increased, as the cost of living in South Korea remains exceptionally high. The government should also provide tax breaks, such as property tax breaks or tax rebates, to families with children as it would encourage a higher birth rate. The government could also offer interest-free loans to families with multiple children to address housing challenges and invest in building affordable government housing. These policies would encourage young people to start families which would increase marriage and birth rates. The government should also foster a shift in work culture to be more supportive of employees who are parents, by offering more parental leave and implementing policies that promote work-life balance. Additionally, they could provide parents with extra paid holidays. Furthermore, the government should drive a cultural change regarding gender roles and family life. This includes advertisements and public campaigns, promoting shared responsibility of men and women in raising children and doing household work, thus reducing the burden on females, which would encourage them to have more kids.

By creating an environment that encourages people to raise children and have families, through financial incentives, family friendly work culture, affordable childcare and housing; along with a shift in the mindset of Koreans to foster equal responsibility in household responsibilities, South Korea can effectively tackle its demographic decline and achieve stability.

References

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