'Dead Cross' Population Decline Realized with More Deaths than Births Last Year
Population Expected to Halve to 25 Million in 40 Years in South Korea
Experts Say "Low Birthrate Issue Requires Solving Youth Employment Problems"
According to the "2020 Resident Registration Population Statistics" announced by the Ministry of the Interior and Safety on the 3rd, the phenomenon of a "dead cross," where the number of deaths in our country surpassed the number of births, occurred for the first time in history last year. Photo by Yonhap News
[Asia Economy Reporter Kang Juhee] Last year, South Korea experienced a 'population dead cross' phenomenon where the number of deaths surpassed the number of births, bringing the 'population cliff' crisis into reality. Analysts predict that the population decline will negatively impact various sectors, including the national economy, due to reduced labor and consumption.
Experts suggest that the low birthrate issue is linked to employment difficulties among the youth and urgently call for fundamental measures to stabilize society.
According to the '2020 Resident Registration Population Statistics' released by the Ministry of the Interior and Safety on the 3rd, as of December 31, 2020, the registered population decreased by 20,838 from the previous year, recording 51,829,023. Last year, the number of births was 275,815, down by 32,882, while the number of deaths increased by 9,269 to 307,764, marking the first-ever 'dead cross.'
This is the first time since the resident registration system was introduced in 1962 that a population decline has been confirmed in South Korea's population statistics. While the increase in deaths had an impact, the sharp decline in birthrate due to reduced job opportunities for the youth was a major factor.
The low birthrate trend is expected to worsen. The number of births fell below 400,000 for the first time in 2017 and has continued to decline annually, dropping to around 300,000 last year, three years later.
The total fertility rate, which estimates the number of children a woman of childbearing age is expected to have in her lifetime, also hit a record low. South Korea's total fertility rate was 0.92 in 2019, 0.9 in the first quarter of last year, and 0.84 in the second and third quarters, continuously setting new lows.
According to the United Nations (UN) Population Fund, the global average total fertility rate is 2.4, and no country has a lower birthrate than South Korea. The Bank of Korea forecasts that South Korea's total fertility rate could drop to as low as 0.72 by 2022.
The Korea Economic Research Institute projected that by 2060, the number of elderly people supported per working-age person will increase to 0.98, further increasing the burden on future generations. Photo by Yonhap News
The Korea Economic Research Institute (KERI) also predicted that in 40 years, South Korea's population will shrink to less than half, resulting in a 'half-sized Korea.'
In a report released in July last year, KERI projected that by 2060, the population would be 25 million, with the working-age population at 48.1%, eligible military conscripts at 38.7%, and school-age population (ages 6?21) at 42.8% of current levels.
Meanwhile, due to low birthrates and aging, the number of elderly people supported per working-age individual is expected to rise from 0.22 to 0.98, increasing the burden on future generations, KERI anticipated.
As the working-age population decreases and the burden of supporting the elderly grows, concerns are rising that the 'population cliff' issue will inevitably cause severe damage to the domestic economy.
The Ministry of Economy and Finance projected in its '2020?2060 Long-term Fiscal Outlook' released in September last year that if the current trends of population decline and growth rate slowdown continue, South Korea's economic growth rate will remain at 0.5% in 2060.
With a shrinking gross domestic product (GDP), the national debt ratio is expected to rise to 81.1%. This is 18.7 percentage points higher than the forecast of 62.4% made in the first report in 2015.
On January 4, the first working day of the New Year 2021, commuters in Sindorim Station, Guro-gu, Seoul, hurriedly walked wearing masks on their way to work. Photo by Kim Hyun-min kimhyun81@
In response, the government announced the '4th Basic Plan for Low Birthrate and Aging Society' (2021?2025) in December last year, committing a total budget of 169 trillion won.
Key policies include ▲ introducing an infant allowance of 300,000 won for all infants aged 0?1 starting in 2022 (gradually increasing to 500,000 won by 2025), ▲ providing a 2 million won voucher upon childbirth, ▲ expanding the coverage limit for pregnancy and childbirth medical expenses, and ▲ a complete overhaul of parental leave benefits, all aimed at encouraging childbirth through cash support.
However, the prevailing analysis is that such cash support cannot be a fundamental solution to the low birthrate problem. Child allowances are seen as having only a one-time effect, and improving quality of life by creating a favorable environment for childbirth should be the focus.
Experts emphasize that the root cause of the low birthrate issue is linked to employment shocks among the youth and stress the urgent need for practical measures to stabilize society.
Professor Kim Taegi of Dankook University's Department of Economics explained, "Population is an important labor force and asset of a country. A decline in population means a decrease in national wealth. When the population decreases, labor force diminishes, consumption power drops, and a vicious cycle occurs where companies do not invest."
He added, "The low birthrate problem cannot be solved simply by pouring in finances. Childbirth depends on changes in people's values. Given the severe employment difficulties and skyrocketing housing prices, people naturally wonder how they can get married and have children."
Professor Kim stressed, "The government is pouring enormous finances into childbirth promotion policies, but child allowances are not incentives for childbirth itself. Issues in the labor market must be addressed, creating an environment where young people can easily enter and companies can create jobs. However, none of these are included in the low birthrate policies. Under such circumstances, marriage and childbirth are inevitably discouraged. It is imperative to fully understand the essence of the population decline issue and implement comprehensive policies to stabilize society immediately."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
