Ren Zeping: Why is South Korea the world's lowest fertility rate?
Yuwa Population Research Team: Ren Zeping, Liang Jianzhang, Huang Wenzheng, He Yafu, Lv Jun
Guide
In 2022, South Korea's total population will have a negative growth rate of -0.1%, and the total fertility rate will be 0.78, ranking first among the world's major economies, with 17.5% of the population aged 65 and above, and it is in a deep aging society. What is the impact of South Korea's ultra-low fertility rate and aging population, what measures has the government taken, and why is the effect less than expected?
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Key takeaways
South Korea's total population and structure: South Korea's total population in 2021 was 51.738 million, a decrease of 91,000 from 2020, and the first negative population growth since statistics began in 1949. In 2022, South Korea's total fertility rate was 0.78, the lowest since 1970 and the lowest among major economies in the world. From 1966 to 2023, the median age of South Korea's population increased from 17.3 years to 44.5 years, and it took 18 years to go from aging to deep aging, surpassing Japan's aging rate.
South Korea's population migration pattern: South Korea's urbanization is later than that of European and American countries, and the urbanization rate is fast, and the urbanization rate from 27.7% to 70.4% takes only 28 years. From 1988 to 2002, the urbanization rate increased from 70.4% to 80.3%, and in 2022, the urbanization rate in South Korea was 81.4%. South Korea's population is concentrated in the core cities of metropolitan areas and urban agglomerations, and the spatial structure of urbanization is extremely uneven. In 2022, the metropolitan area accounted for only 11.8% of South Korea's land area, but it was home to more than half of South Korea's population, about 26.124 million, Seoul, the largest city in South Korea, with 0.6% of the area, with 18.2% of the population, and Busan, the second largest city, with 3.296 million people with 0.8% of the area, accounting for 6.4% of the population.
The impact of South Korea's demographic changes: the miracle of the Han River is no longer there, economic growth is sluggish, savings and investment rates are declining, and at the same time, the chaebol economy is shrouded, social vitality is declining, and the generation of N throwers is emerging.
In order to cope with the population dilemma, South Korea has taken a series of measures since the 90s of the 20th century, including the establishment of a population policy agency, improving the fertility incentive and parenting support mechanism, establishing and improving the old-age security system, and promoting the employment of the elderly population.
1) The high cost of childbirth affects the fertility willingness of families of childbearing age, and South Korea is the country with the highest fertility cost and the lowest fertility rate among the global economies. The cost of raising a child to the age of 18 in South Korea is equivalent to 7.8 times GDP per capita, the highest multiple among major economies in the world.
2) South Korea's housing prices have continued to grow rapidly since 2000, and in 2021, South Korea's house-price-to-income ratio ranked first among the world's major developed economies with 26.1.
3) Ignoring the objective law of population development and missing the best opportunity for population policy adjustment.
4) The inevitable result of the development of fertility theory, the utilitarian fertility intention fades, the cost constraint stage arrives, and unmarried and infertile becomes the choice of more school-age population.
5) The patriarchal ideology and the traditional family division of labor are difficult to return, and the policy does not create a social environment for gender equality. Nearly 50% of women who return to work after maternity leave in South Korea leave their jobs within one year.
6) Excessive working hours, inhibiting childbearing behavior and reducing childcare time. In 2022, South Korean workers worked an average of 1,901 hours per year, the longest among major economies in the world.
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1 Demographic characteristics of South Korea: negative growth, aging, and agglomeration in the metropolitan area
1.1 Population: from high growth to low growth to negative growth
1.2 Demographic structure: The number of births is at a record low, and the rate of aging is higher than that of other countries
1.3 Population distribution: Urbanization started late and fast, and the population concentrated in the capital area
2 Impact of demographic change in South Korea
2.1 The miracle of the Han River is no longer there, economic growth is sluggish, and savings and investment rates are declining
2.2 The chaebol economy is shrouded, social vitality declines, and the N-throwing generation emerges
3 South Korea's response
3.1 Declining birthrate: Establish a population policy agency, improve fertility incentives and parenting support mechanisms, and promote work-family balance
3.2 Aging: Establish and improve the old-age security system and promote the employment of the elderly population
4 South Korea's response was less than expected due to missed opportunities, changing attitudes about marriage and childbearing, high cost of childbearing, gender inequality, and long working hours
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1 Demographic characteristics of South Korea: negative growth, aging, and agglomeration in the metropolitan area
1.1 Population: from high growth to low growth to negative growth
1925-1955: Dragged down by political turmoil and the Korean War, the population grew slowly, from 19.020 million to 21.502 million, with an average annual compound growth rate of 0.4%. From 1925 to 1945, during the period of Japanese colonial rule, due to measures such as health and epidemic prevention, vaccination, and the introduction of Western medicine, South Korea's medical level improved and the population grew steadily, with an increase of 6.10 million people in 20 years, with an average annual compound growth rate of 1.4%. In 1945, Japan surrendered in World War II and the Korean Peninsula was liberated, but due to the separation of political factions and political turmoil, the population declined instead of increasing, and fell by 4.953 million from 1945 to 1950 to 20.167 million. From 1950 to 1955, the Korean War led to a decline in the birth rate and an increase in the casualty rate, but there was also a part of the population flowing from North Korea to South Korea, and the total population showed a slow growth trend, with an average annual compound growth rate of 1.3%.
1955-1990: Since the 60s, South Korea began to adopt a population control policy, and the population growth rate fluctuated and declined, with an average annual compound growth rate of 2.0%. From 1955 to 1965, with the end of the Korean War, the political situation stabilized, and the spread of antibiotics, South Korea's population grew explosively and recovered, and from 1955 to 1965, South Korea's population increased by 7.657 million to 29.160 million, with an average annual compound growth rate of 3.1%, known as the "baby boomer generation". However, in order to avoid hindering economic development, South Korea began to implement a family planning policy in 1961 and set up a family planning review committee under the jurisdiction of the Ministry of Health and Social Affairs, with the goal of reducing the population growth rate to less than 2.5% during the first five-year plan period. In the following 10 years, the population policy continued to tighten, and the population growth rate declined significantly. From 1965 to 1990, South Korea's population increased from 29.16 million to 43.39 million, with an average annual compound growth rate of 1.6%.
1990 to the present: Affected by the Asian financial crisis, South Korea's economy has been under pressure, affecting employment and income, and since 1990, the average annual compound growth rate of South Korea's population has dropped to less than 1%, and the population growth will be negative in 2021. In the mid-to-late 90s, due to the severe impact of the Asian financial crisis, South Korea's economic growth slowed down, and employment pressure and income uncertainty increased, resulting in the growth of South Korea's marriageable and childbearing population, and the average annual compound growth rate of the population from 1990 to 2020 was only 0.6%. In 2021, South Korea's total population was 51.738 million, a decrease of 91,000 from 2020, marking the first negative population growth since statistics began in 1949. In 2022, the total fertility rate was 0.78, the lowest since 1970, and the lowest among major economies in the world. The shift from positive to negative population growth has exacerbated the aging and declining birthrate of South Korea's population, causing the country's population pyramid to turn into a recessionary type.
1.2 Demographic structure: The number of births is at a record low, and the rate of aging is higher than that of other countries
Declining birthrate: Affected by the high cost of living and the change of fertility concepts, the phenomenon of late marriage and infertility has intensified, with the total fertility rate falling to 0.78 in 2022 and the number of newborns falling below 250,000 for the first time. From 1960 to 1990, South Korea's economy took off, followed by rising housing prices and prices, and after the Asian financial crisis in 1997, the unemployment rate and income uncertainty of young people in South Korea increased, and the phenomenon of late marriage and infertility intensified. According to Statistics Korea, from 1980 to 2020, the marriage rate in South Korea fell from a peak of 10.6 per thousand to 4.2 per thousand, and the proportion of single-person households in the total number of households increased from 4.8 percent to 31.2 percent. From 1990 to 2022, the age of first marriage in South Korea increased from 27.8 to 33.7 for men and from 24.8 to 31.3 for women. From 1993 to 2022, the average age of women at childbearing increased from 27.6 years to 33.5 years, and the average time to have their first child after marriage increased from 1.2 years to 1.5 years. The total fertility rate in South Korea has continued to decline after reaching a peak of 5.95 in 1960, falling below the replacement level of 2.1 in 1984, falling below 1 to 0.98 in 2018, and falling to 0.78 in 2022, a record low, and the number of newborns has decreased by 11,000 to 249,000 year-on-year, falling below 250,000 for the first time.
Aging: From 1951 to 2023, the median age of South Korea's population increased from 17.4 to 44.5 years, and it took 18 years to go from aging to deep aging, surpassing Japan's rate of aging. The median age of the Korean population was 20.5 years in 1925 and 17.3 years in 1966, mainly due to the decline in infant mortality and the 1955-1965 baby boom. In 2000, 7.2% of South Korea's population was over 65 years old, and in 2018, 14.3% of the population was aging. According to Statistics Korea's forecast, the proportion of South Korea's population over the age of 65 will exceed 20% in 2025, entering a super-aging society. In terms of the rate of aging, South Korea is aging later than other developed countries, but it is developing faster than other countries. It took 65 years for the United States, 126 years for France, 46 years for the United Kingdom, 40 years for Germany, 24 years for Japan, and only 18 years for South Korea to go from deep aging to deep aging.
1.3 Population distribution: Urbanization started late and fast, and the population concentrated in the capital area
Population transfer in the urbanization stage: South Korea urbanized later than European and American countries, and the urbanization rate was faster, and the urbanization rate from 27.7% to 70.4% took only 28 years. In the sixties of the last century, South Korea's urbanization started in the bud, compared with the United States, Europe and other major developed countries started late, and the population was concentrated in large cities with industrialization. The second stage was a period of rapid growth that began in the seventies and eighties, and from 1960 to 1988, the urbanization rate in South Korea rose from 27.7% to more than 70.0%. Since 1988, the urbanization rate of South Korea has slowed down, from 70.4% to 80.3% from 1988 to 2002, and after 2002, the urbanization rate has basically fluctuated in the range of 80.0%-82.0%, and the urbanization rate of South Korea is 81.4% in 2022.
Population transfer in the stage of urban agglomeration in metropolitan areas: South Korea's population continues to concentrate in metropolitan areas, urban agglomerations and core cities, and the spatial structure of urbanization is extremely uneven.
According to the administrative divisions of South Korea, the country can be divided into 17 first-class administrative regions, namely 1 special city, 1 special municipality, 6 metropolitan cities, 7 provinces, and 2 special autonomous provinces. Among the first-level administrative regions, the top three regions in terms of population in 2022 are Gyeonggi Province, Seoul, and Busan, with populations of 1,371.8, 9,417,000, and 3,296,000, respectively. Gyeonggi Province's population has grown rapidly since 1985, overtaking Seoul's population in 2005 and gathering 26.5% of the population in 2022 with an area of 10.2%. Seoul's population has been declining since 1990, but it still accounts for 18.2% of the country's population at 0.6%, while Busan's administrative area accounts for 0.8% of the country's population, and its population increased from 1.876 million to 3.296 million from 1970 to 2022, accounting for 6.0% to 6.4%.
The Seoul metropolitan area includes Seoul, Gyeonggi-do, and Incheon, and the population concentration of the metropolitan area began in 1960, and from 1960 to 1980, the proportion of the population in the metropolitan area increased rapidly, increasing by about 8 percentage points every decade. In 1982, the Seoul metropolitan area management law was enacted, which defined the boundaries of the metropolitan area centered on Seoul, and the population of the metropolitan area continued to grow. The metropolitan area accounts for only 11.8% of South Korea's land area, but it is home to 50.5% of the country's population of about 26.124 million, and according to the Second Metropolitan Area Development Plan Concept of the Korea Institute of Land Development, 55% of manufacturing companies, 70% of high-tech enterprises, and 82% of national public institutions are concentrated in the metropolitan area.
2 Impact of demographic change in South Korea
As producers and consumers, population affects both the supply side and the demand side in the process of social and economic development, with the supply side influencing the economy through labor and technological progress, and the demand side influencing the economy through consumption, savings, and investment.
During the period of demographic dividend, the proportion of the working-age population increased, the dependency ratio of the population decreased, the social production capacity was enhanced, a large amount of social wealth was created and reserved, and economic growth was promoted. After the disappearance of the demographic dividend, the labor supply will decline, the population dependency ratio will rise, the aging population will intensify, and the pension burden will increase, which will hinder social and economic development.
2.1 The miracle of the Han River is no longer there, economic growth is sluggish, and savings and investment rates are declining
During the period of rapid population growth, South Korea's labor supply was sufficient, and the economy maintained a double-digit growth rate for 27 consecutive years, creating the miracle of the Han River. From 1970 to 1978, South Korea's population aged 15-64 maintained an average annual growth rate of 3.2%, while South Korea's GDP grew at a compound annual rate of 30.6% from 1971 to 1981. From 1979 to 1989, the average annual growth rate of the population aged 15-64 fell to 2.0%-3.0%, while the compound annual growth rate of GDP fell to 17.4% from 1982 to 1991. From 1990 to 1998, the growth rate of South Korea's population aged 15-64 fell to 1.0%-2.0%, and the compound annual growth rate of GDP fell to 11.3%. After 1999, the growth rate of South Korea's population aged 15-64 fell below 1.0%, and the average annual GDP growth rate of South Korea slowed further to 5.5% from 2001 to 2022. From 2021 to 2022, South Korea's economic growth rate was lower than the average of OECD countries for two consecutive years.
South Korea's declining birthrate and aging population have led to a decline in consumption growth, and market demand is weak, but the demand for health consumption is growing significantly faster than others. From 1970 to 1980, the scale of consumption and the level of per capita consumption in South Korea fluctuated and declined, and there was a brief period of upward movement from 1980 to 1990, and then it has been fluctuating and declining. In 2000, South Korea's population aged 65 and over accounted for more than 7%, entering an aging society, and since then, the proportion of people aged 65 and over has continued to grow. From 2000 to 2022, health consumption expenditure grew at an average annual rate of 8.7%, much higher than the 5.3% growth in total consumer spending. In contrast, weakness in demand markets has a greater impact on goods with relatively high demand elasticity, such as durable goods. From 2000 to 2022, consumer spending on durable goods grew at an average annual rate of 4.7%, of which negative growth was recorded in 2022, down 2.3% year-on-year.
The national savings rate fell from 41.4% to 34.9% from 1988 to 2022 and from 31.6% to 25.4% from 1996 to 2020. Population structure is closely related to the savings rate, and the increase in the proportion of the working-age population increases the savings rate. According to the IMF forecast of the national savings rate, from 1980 to 1997, when South Korea's economy grew rapidly and the proportion of the working population was relatively high, the growth rate of income was higher than the growth rate of consumption, and the total national savings rate remained at a high level of 36.0%-42.0%. With the slowdown in economic growth, the acceleration of the declining birthrate and aging population, the slowdown in the income level of the working population, and the increase in social security expenses, the savings rate has dropped significantly to between 30.0% and 35.0%. At the same time, there is a clear positive correlation between the savings rate and the investment rate, and the continuous decline in the savings rate leads to a decline in the investment rate. The investment rate reached a high of 39.0% during the country's rapid economic growth, but by 2022, the country's gross fixed capital formation as a percentage of GDP has fallen to 32.0%.
2.2 The chaebol economy is shrouded, social vitality declines, and the N-throwing generation emerges
The cost of social security in South Korea continues to rise, and the burden of social welfare continues to increase. South Korea has a public pension system, in which the national pension dominates the pension system, covering all citizens over the age of 18. South Korea's social welfare spending as a percentage of GDP climbed from 2.8% in 1990 to 15.6% in 2020, a 5.6-fold increase in 30 years. Among them, the proportion of pension expenditure in GDP increased from 0.8% to 4.3%, and the proportion of health social welfare expenditure in GDP increased from 1.4% to 5.2%, and the burden of social welfare increased significantly. As the burden of social welfare increases, the scale of the Korean government's debt is also increasing year by year. In 1997, the size of South Korea's national debt was 60.3 trillion won, accounting for 11.1% of GDP, and in 2022, the size of the national debt expanded to 1067.4 trillion won, and the scale of debt increased by 16.7 times in 25 years, climbing to 49.4% of GDP.
Korean companies are facing the dual dilemma of difficult employment, rising labor costs, declining market demand and declining profitability. Demographic changes in South Korea have led to an increase in the proportion of elderly retirees, and employees are demanding higher salaries and security in order to secure their future retirement, which in turn has increased the employment costs of companies. According to Statistics Korea, labor costs accounted for 13.5% of total operating costs in 2011 and 18.6% in 2020, with an average annual increase of 3.3%. At the same time, the sluggish market demand has led to a decline in the sales growth rate of Korean companies, taking Korean manufacturing companies as an example, the average annual growth rate of Korean manufacturing enterprises in 1970-1980 was 37.2%, and from 1980 to 2000, the sales growth rate slowed to 14.7%. After 2000, South Korea entered an aging society, and the sales growth rate fell further to an average annual rate of 5.9%.
Chaebol Group's sales account for more than 80% of South Korea's GDP, and the development path of youth is limited, and social vitality is declining. South Korea's chaebol originated under the Syngman Rhee government, and as the chaebol expanded, the government introduced a series of regulatory policies, but the chaebol still plays an important role in the Korean economy. According to Yonhap News Agency, in 2020, 64 groups with assets of more than 5 trillion won had sales of 1,617 trillion won, accounting for 84.3% of South Korea's GDP. The huge scale of the chaebol has led to the minority groups in South Korea holding a large number of high-quality resources, and the class solidification continues to increase. The development path of South Korea's young population is limited to entering first-class universities and high-quality jobs in chaebol groups, and competition is intensifying. Fierce competition and high housing prices have led more and more Korean young people to give up their efforts and involute, becoming the N-throw generation who abandon love, marriage, childbirth, etc., and their social vitality continues to decline.
3 South Korea's response
3.1 Declining birthrate: Establish a population policy agency, improve fertility incentives and parenting support mechanisms, and promote work-family balance
Strengthen the top-level design of the birth policy, and set up a population policy management body directly under the president, the Low Birth Rate and the Aging Society, to study, formulate, and adjust the population policy.
South Korea has ensured the smooth implementation of population policies and institutions through a series of top-level designs. In the early 90s, South Korea began to adjust its previous policy of strictly controlling the size of the population, and in 1994, the Republic of Korea established the Population Policy Review Committee, which is responsible for researching and formulating population policies, in 2001, the Ministry of Gender Equality and Family Affairs was established with the goal of promoting gender equality and family well-being, and in 2003, the Committee on Aging and Future Society was established to formulate policies for a declining birthrate and aging society. In 2005, the Committee on Low Fertility and Aging was established under the President's Mandate and required the Committee to report to the Diet on its annual population policy and related achievements.
From 2006 to 2020, the Republic of Korea implemented a three-step plan to encourage childbirth, and launched three basic plans for a low fertility and an aging society, building a relatively comprehensive policy system to encourage childbirth. In 2006, the Korean government launched the Basic Plan for a Low Fertility and Aging Society for the first time, with the goal of establishing a basic institutional framework to deal with the problem of low fertility by establishing a policy system to eliminate barriers to child-rearing, expanding the infrastructure of childcare services, and providing childcare support to families. The first Basic Plan was completed in 2010, during which the fertility rate in the Republic of Korea increased slightly but did not return to its original level. From 2011 to 2015, the Korean government implemented the second Basic Plan, which not only emphasized childcare assistance, but also added work-family balance assistance, including strengthening support for working women and meeting the needs of dual-income families to raise children. From 2016 to 2020, the third Basic Plan was implemented, and the coverage continued to expand on the basis of the second one, and in addition to families, enterprises and communities were also included in the scope of the work-family balance policy.
South Korea continues to improve the childbirth incentive and parenting support mechanism, promote work-family balance, and protect the employment rights of working women during childbirth and parenting.
Childbirth incentives: South Korea encourages childbirth by reducing the cost of childbirth medical care and providing maternity leave for both couples. To encourage marriage, South Korea provides 50,000 affordable housing units annually to newlyweds with a monthly income of less than a certain level. In order to encourage childbirth, women are exempted from medical expenses from pregnancy to childbirth, and medical expenses incurred by infants under the age of 1 are exempted. In addition, women who give birth to one child are entitled to 90 days of paid maternity leave, and women who have given birth to two or more children are entitled to a maximum of 120 days of maternity leave. In 2007, the Republic of Korea introduced paternity leave for men, further improving the leave arrangements to encourage childbirth.
Parenting support mechanism: South Korea has launched a series of policies such as the Basic Plan for Medium- and Long-Term Childcare to provide families with multi-level childcare policies and reduce the cost of family childcare. From 2006 to 2010, the Republic of Korea launched and implemented the Basic Plan for Medium- and Long-Term Childcare to lay the foundation for public childcare and improve the quality of childcare services, and in 2008 it launched the Childcare Plan (2009-2012), and from 2013 to 2017, it implemented the Medium- and Long-Term Basic Plan for Childcare for the second time. From 2018 to 2022, the Basic Plan for Medium- and Long-Term Childcare has been upgraded again to expand the social responsibility of childcare. In addition to policies, South Korea provides assistance to families with children through cash subsidies, tax cuts, etc., such as 700,000 won (equivalent to 3,790 yuan) per month for families raising children under the age of 1 from 2023.
Work-Life Balance: The Republic of Korea has introduced policies such as the Act on Employment Equality between Men and Women and Supporting Work-Family Balance to protect women's employment rights during childbirth and parenting. In 1988, the Employment Equality Act for Men and Women was introduced, and in 2007, the law was upgraded to the Employment Equality and Work-Family Balance Support Act for Men and Women, encouraging men to participate in childcare and encouraging companies to support women's work-life balance. In 2018, South Korea amended the Labor Standards Act to further protect the employment rights of women who have children and raise children, such as clarifying paid maternity leave for women and requiring companies to implement flexible work systems.
3.2 Aging: Establish and improve the old-age security system and promote the employment of the elderly population
Establish and improve the old-age security system to ensure the lives of the elderly population and low-income groups. South Korea has successively promulgated laws such as the Basic Plan for a Low Birth and Aging Society and the Act on the Promotion of Age-friendly Industries, and has established and improved the living protection system, medical protection system, and national pension system.
Livelihood protection system: the goal of the system is to ensure the livelihood of low-income groups, initially only provide cash subsidies, assistance, and then upgraded to provide employment training and opportunities, after continuous improvement, the system in 2000 to complete the legislation, that is, the "National Basic Living Security Law", low-income groups in accordance with the law to enjoy the minimum living security, the scope of protection expanded to provide education, childbirth, living environment and other aspects.
Medical protection system: Unlike other countries' medical insurance systems, the beneficiaries of South Korea's medical protection system are limited to low-income groups, and according to the law, all cities and provinces have set up medical protection funds, and the main sources of the funds are special funds from the state and local governments, and the funds cover all or part of the medical expenses of low-income groups. In addition to medical expenses, the Republic of Korea provides healthy living expenses for low-income groups through the Medicaid Improvement Program.
National Pension System: The National Pension System covers all citizens and provides a variety of livelihood guarantees for the elderly to maintain their pre-retirement living standards. In order to maintain the sustainability of the national pension system, the Korean government has implemented a five-year fiscal calculation system since 2003, which calculates and forecasts the cash flow of the pension based on factors such as the number of pension recipients, the number of new enrollees, and price fluctuations, and adjusts the pension system plan accordingly.
Promote the employment of the elderly, protect the equal employment rights and interests of the elderly population in accordance with the law, provide employment assistance for the elderly population, build a lifelong training system, and provide more opportunities for the elderly population to find employment. From 2012 to 2022, the proportion of full-time employees over 55 years old increased from 10.0% to 17.8%.
The aging population structure has increased the financial burden of the Korean government, reduced the labor supply of enterprises, changed the family pension model, and the employment demand of the elderly population is growing. At the same time, the elderly population is not willing to re-enter due to the low pension after retirement, the stability and quality of life are not high.
South Korea has passed legislation to extend the retirement age to 60 years old to ensure equal employment rights and interests of the elderly. In 1991, the Republic of Korea enacted the "Employment Promotion Act for the Elderly", in 2003, the Republic of Korea established the Committee on Aging and Future Society to solve the problem of employment of the elderly population, and in 2008, the "Employment Promotion Act for the Elderly" was upgraded to the "Prohibition of Age Discrimination in Employment and the Employment Promotion of the Elderly".
South Korea provides a variety of employment assistance for elderly workers, such as wage subsidy assistance for employees under the wage cap system, and the maximum amount of assistance per person per year does not exceed 10.8 million won (equivalent to 58,000 yuan). In addition to the elderly employed, South Korea also provides assistance to enterprises that employ the elderly population, such as enterprises that employ employees over 45 years old, during the internship period, the company can enjoy 600,000 won (equivalent to 3,250 yuan) per month of assistance, and after becoming regular, enjoy a subsidy of up to 5.4 million won (equivalent to 29,000 yuan).
Korea provides career planning services for the elderly population and has established a lifelong training system. In the early days of the development of the career planning system in South Korea, the service objects were few, the scope was small, and the project was single, but with the continuous improvement of the system, the service objects were expanded from in-service employees to job-seeking employees, and the scope of services was expanded from large enterprises to small and medium-sized enterprises, which greatly promoted the re-employment of the elderly population. At the same time, South Korea encourages enterprises to train employees according to age, provide different training courses for employees who are new to the workplace and employees who have left the workplace, and provide lifelong training for employees to improve the re-employment ability of the elderly population.
4 South Korea's response was less than expected due to missed opportunities, changing attitudes about marriage and childbearing, high cost of childbearing, gender inequality, and long working hours
In 2023, according to the forecast of the Ministry of Health and Welfare, the budget size of "parental allowance" will be about 2.4 trillion won (equivalent to 12.9 billion yuan), but South Korea is still mired in the demographic dilemma of ultra-low fertility rate and continuous aging, with a total population growth rate of -0.1% in 2022 , the total fertility rate is 0.78, the lowest among major economies in the world, and the population aged 65 and above accounts for 17.5%, which is in a deep aging society. What is the reason?
First, the high cost of childbirth affects the fertility willingness of families of childbearing age, and South Korea is the country with the highest fertility cost and the lowest fertility rate among the global economies. The cost of childbirth includes both the cost of pregnancy and childbirth (i.e., the cost of childbirth), as well as the cost of parenting and education (i.e., the cost of childbearing), and the cost of childbirth is one of the most important factors affecting the fertility intention of families of childbearing age. By comparing the cost of raising a child to the age of 18 in different countries relative to the multiple of per capita GDP, it is found that the cost of raising a child to the age of 18 in South Korea is equivalent to 7.8 times of per capita GDP, and the higher the multiple of the cost of childbirth is equivalent to the per capita GDP, the greater the pressure of parenting.
Second, South Korea's housing prices have continued to grow rapidly since 2000, with excessively high housing prices, unstable income and employment, and inhibition of fertility behavior. South Korea's population continues to concentrate in the Seoul metropolitan area, the imbalance between supply and demand, and the national property speculation environment created by the all-rental housing system, housing prices continue to grow rapidly. According to the data of the third quarter of 2022 from the National Bank of Korea, the housing prices in Seoul, South Korea in the third quarter of 2022 were about 820 million won (equivalent to 4.44 million yuan), while the average household income in Seoul in the same period was only 57.01 million won (equivalent to 309,000 yuan). According to Numbeo data, in 2021, South Korea ranked first among the world's major developed economies with a house-price-to-income ratio of 26.1. In contrast to high housing prices, South Korea's economic growth has slowed, job opportunities have decreased, income polarization has intensified, competition for the working-age population has intensified, and uncertainty about income and employment has increased, which has discouraged childbearing behavior.
Third, ignoring the objective law of population development and missing the best opportunity for population policy adjustment. In 1983, the total fertility rate of the Republic of Korea fell to the replacement level of 2.1, which was the perfect time to adjust the population policy. However, South Korea only took measures to adjust its population policy in the 90s, and at the same time, due to the inertia of the policy of limiting the size of the population in the early stage, the population policy adjustment style in the 90s was conservative, focusing on improving the quality of fertility and not emphasizing the stimulation of fertility. It was not until after 2000 that the population policy shifted from a conservative policy to an active fertility policy, resulting in no peak births since the introduction of the policy, and the total fertility rate has remained below 1.3 since 2000.
Fourth, the inevitable result of the development of fertility theory, with the fading of utilitarian fertility intentions, the change of Korean marriage and childbearing concepts, cultural customs, and the arrival of the cost constraint stage, unmarried and infertile have become the choice of more school-age population. According to the changes in the dominant factors driving the decline of fertility, human history can be divided into four stages: First, the high mortality driving stage, people need to fight high mortality with high fertility, and the total fertility rate is more than 6, and the concept of "more children and more blessings" in South Korea is deeply rooted in the hearts of the people at this stage. Second, in the driving phase of mortality decline, it is recognized that low fertility can also ensure maximum returns, and the total fertility rate has fallen from more than 6 to about 3. Third, in the stage of fading of utilitarian fertility, people's fertility behavior is closer to emotional needs, and attention is paid to the improvement of the quality of children, and the total fertility rate is roughly reduced from 3 to about 2. Fourth, in the cost-constrained low fertility phase, the total fertility rate falls below the replacement level of 2, which is lower than the intended fertility level. In 1983, South Korea had reached a stage of cost constraints, and a declining total fertility rate was inevitable.
Fifth, the masculinist ideology and the traditional family division of labor are difficult to return, the policy has not created a social environment for gender equality, and the needs of women have not been truly met, making it difficult to achieve a balance between work and family. Although the South Korean government has introduced a series of policies to protect women's rights, the policies are limited to family support, mainly married and childbearing working women, and are not based on changes in the overall social environment, which makes it difficult for the policies to be effective in deep-rooted traditional social thinking. According to relevant data, nearly 50% of women who return to work after maternity leave in South Korea leave their jobs within one year, and the traditional social and cultural environment is not friendly to married and childbearing working women, so more and more women choose the latter between "parenting" and "pursuing career development", and have fewer or even no children.
In 2022, the average annual working hours of South Korean workers were 1,901 hours, the longest among major economies in the world, which inhibited childbearing behavior and reduced childcare time. At the same time, the increase in working hours exacerbates the family-work conflict, reduces the happiness of employees, and thus reduces the willingness to have children. According to OECD data, South Korea has the longest working hours among major countries in the world in 2022, which is an important reason for South Korea's lowest fertility rate.