[Chatham House Discussion] "South Korea's Ultra-Low Birthrate Draws Global Attention... Need to Reexamine Policies from the Ground Up"

Total Fertility Rate of 0.78 in 2022 According to Statistics Korea
"Worst Record in the World Updated Annually"
Increase Direct Support, Prepare Thoroughly, Then Accept Immigration

Editor's NoteThe low birthrate issue is often compared to a so-called 'gray rhinoceros.' It refers to a risk that is highly probable and has a large impact but is overlooked by people. South Korea's total fertility rate is 0.78, the lowest in the world. It means the world's largest 'gray rhinoceros' is lurking around us.

On the 7th, Asia Economy held a 'Monthly Chatham House Roundtable' at the Asia Media Tower in Jung-gu, Seoul, under the theme 'The Seriousness of the Low Birthrate Problem and Seeking Solutions.' The roundtable was attended by Park Gi-nam, Secretary General of the Korea Population, Health and Welfare Association; Yoo Jae-eon, Professor of Social Welfare at Gachon University; and Jeong Jae-hoon, Professor of Social Welfare at Seoul Women's University (in alphabetical order). They shared the current status and seriousness of the low birthrate problem and brainstormed countermeasures. The three experts expressed concern about the seriousness of the low birthrate issue, saying, "The total fertility rate falling below 1.3 is a signal that natural population recovery is impossible."

Regarding the government's low birthrate policies, it was pointed out that the budget for direct expenditures related to childbirth and childcare costs is woefully insufficient compared to the OECD average. Although a staggering 280 trillion won has been poured in over 16 years, when indirect expenditures related to parenting conditions such as education and housing are excluded from the total budget, the actual direct support budget is not large. Therefore, there was a call to clearly distinguish between direct and indirect support projects in the budget execution process and to increase the direct expenditure budget.

Meanwhile, the participants also agreed that there is a lack of low birthrate measures for workers in blind spots outside large corporations and regular employment. There was also an opinion that companies should engage in family-friendly management to balance work and family and align with the national low birthrate policies.

This roundtable followed the 'Chatham House Rule,' where the list of participants is disclosed but each speaker's remarks are anonymized. The following are the main points of the discussion.

On the 7th, participants shared their opinions at the Asia Economic Chatham House roundtable discussion titled "The Seriousness of the Low Birthrate Issue and Seeking Solutions," held at the Asia Media Center in Jung-gu, Seoul. The roundtable was attended by Park Gi-nam, Secretary General of the Population, Health and Welfare Association; Yoo Jae-eon, Professor of Social Welfare at Gachon University; and Jung Jae-hoon, Professor of Social Welfare at Seoul Women's University, who discussed the current status and solutions to the low birthrate issue. Photo by Yoon Dong-ju doso7@

◆ Moderator = Kim Pil-su, Managing Editor of Economic Finance, Asia Economy

The population decline trend is clear. How serious is South Korea's low birthrate problem?

There are two indicators that show how serious the low birthrate is: the total fertility rate and the number of births. According to Statistics Korea, the total fertility rate last year was 0.78. The number of births in 2021 was 260,562. This is a very serious figure. It is the lowest level in the world, and the problem is that this 'bad record' is being renewed every year. To put it in perspective, it is worse than countries at war. South Korea is having fewer children than Middle Eastern countries that have been at war for a long time.

South Korea is a serious 'low birthrate country' that major population economists worldwide are paying attention to. Demographically, the threshold for a 'super-low birthrate' country is a total fertility rate of 1.3, and South Korea already dropped to 1.3 in 2001. It has not rebounded since then. While the low birthrate phenomenon is global, Nordic countries in Europe, France, and the UK have their lowest fertility rates hovering around 1.45.

◆ 'Super-Low Birthrate South Korean Society' Becomes a Top Concern Among Global Demographers... "Lack of Reasons to Choose Childbirth is Key"

Why is it particularly this serious? What do you see as the cause?

Even in times when economic resources were scarcer than now, people got married and had children. The core issue is that culture has changed a lot. The standard 'life course' no longer exists. Besides the path of employment and marriage, there are various 'life course' options. There is no definitive correct path regarding whether to marry or have children.

At each stage, individuals must take responsibility and risk in making choices. The problem is that people are too 'exhausted' to choose the life course of marriage and childbirth. They have excessively depleted emotional and psychological resources through stages like college entrance and employment. Being 'burned out' from choosing the marriage-childbirth life course, they opt for other choices.

The current situation can be explained by the concept of 'quality of life.' People have children when their quality of life is high. There are two objective conditions that constitute 'quality of life': 'objective material conditions' and 'subjective life satisfaction.' When both are positive, people are happy and have children.

How is the quality of life for young people in South Korea now? They are in a plus-minus or minus-minus state. Young people in a plus-minus state have decent economic conditions but low life satisfaction due to factors like gender inequality. This mismatch means that even if they earn well, they do not have children because they are not psychologically stable. There are also young people in a minus-minus state, known as the 'deprivation state.' They are economically and emotionally struggling and naturally do not have children. Among OECD countries, South Korea ranks 35th in life satisfaction. At this level, there is little will to have children.

But if we look only at quality of life, hasn't it improved compared to baby boomers? South Korea faces a low birthrate problem, but Africa's population is explosively increasing. How should we interpret this?

They live with satisfaction despite poor objective life conditions. This is called 'adaptation.' Then they have children. South Korea also adapted and had children in the past. But now, as awareness of the problem grows, adaptation becomes difficult. Women question, 'Why should I have children and bear the sole childcare burden?' Men question, 'Why should I be the breadwinner and bear the support burden?' Adaptation fails, and a 'mismatch' occurs. Although objective life conditions have improved compared to previous generations, the state is one of 'mismatch' or 'deprivation.' Because they are in plus-minus or minus-minus states, they do not have children.

◆ Despite pouring 280 trillion won over 16 years, the problem remains unresolved... Examining budget effectiveness reveals insufficient support for low birthrate 'core targets'

South Korea has made tremendous efforts, investing a considerable budget of 280 trillion won over 16 years. Yet the low birthrate problem remains unsolved. What are the problems with the government's population policies?

Strictly speaking, the figure of 280 trillion won is inaccurate. Low birthrate policies can be divided into 'indirect support' and 'direct support' policies. The core is 'direct support' policies such as childcare and parenting services. When looking only at these, South Korea has not had many substantial low birthrate support policies. Especially, cash support policies related to childcare have been insufficient compared to the OECD. The actual direct support budget is not 280 trillion won.

The Low Fertility and Aging Society Committee (hereafter 'LFASC') also reviewed the low birthrate budget by classifying it into direct and indirect support. According to the budget review documents, even based on the 2021 budget, the direct support portion was only about 40%. Until 2020, this classification was not official, but they decided to improve these figures. [Related article in this paper on May 22: [Exclusive] Low Birthrate Budget 'Bubble' to be Removed]

Much of the 280 trillion won budget poured into low birthrate was a 'bubble budget.' Countries with lower fertility rates than South Korea are only the United States and Costa Rica. We need to benchmark how countries with higher fertility rates are making efforts. They have increased support for family welfare, i.e., substantial 'direct support.' South Korea has not done so. It is fair to say that the government has not poured enough budget into low birthrate-related policies. This is the government's original sin.

That's right. In that sense, we need to re-examine the effectiveness of budgets classified for low birthrate. We need to see whether support measures that parents can actually feel are being presented.

The government's policy failure is not excused just because it invested less budget than the OECD average. It seems the government has not clearly defined whether to focus on raising the fertility rate or responding to the impacts of low birthrate.

This is an important point. The clear focus on what problem to solve has continuously changed. The government initially set a concrete goal of raising the total fertility rate but shifted to the goal of 'improving quality of life' from the previous administration. They decided not to set a specific target for the fertility rate anymore.

For a while, the Ministry of Economy and Finance led population problem responses, and the main agenda shifted from 'low birthrate solutions' to 'adaptation measures.' Recently, the agenda has changed again. The perception of low birthrate as a 'social problem' has begun to return. Accordingly, not only the Ministry of Economy and Finance but also the Ministry of Health and Welfare and LFASC plan to launch a 'Population Policy Planning Group' to discuss problem-solving together. Various issues will likely be discussed there.

◆ "Gender equality policies alone are insufficient... Need to examine social care, family-friendly systems, income issues comprehensively"

What specific policies do you think are necessary?

Above all, we need to design effective policies. We should examine the effectiveness of South Korea's current parental leave system. Instead of providing long parental leave, policies should be considered to balance work and childcare for both men and women. We should look at why public officials have relatively high fertility rates. It is probably because they can use parental leave and, despite some income reduction, can balance childcare and work. We should note that workers in small and medium enterprises or small self-employed businesses find it difficult to make such choices.

European cases are worth referencing. We should get ideas from Sweden, which focuses on family policies from a gender equality perspective, and France, which has a high rate of births outside marriage. France supports children rather than families registered by marriage, strengthening social integration from a diversity perspective. Although South Korea's out-of-wedlock birth rate is less than 3%, it is necessary to legally embrace diverse relationships. Also, Hungary reportedly saw a slight fertility rebound when cash support was strengthened.

There is a sociological concept called the 'valley of transition.' It refers to the phenomenon where fertility rates decline as women enter society. Subsequently, European countries implemented gender-equal social security policies to enable women to balance work and family, leading to some fertility rebound. Therefore, supporting policies from a gender equality perspective is important, but it alone cannot sufficiently raise fertility rates. Although it may be obvious, a two-track strategy is crucial. Alongside gender-equal work-family balance policies targeting parents and families suffering from lack of care time, responses to income issues must be strengthened.

Specifically, to balance work and family, a 'social care system' and 'family-friendly systems' must be fully established. Germany has established a social care system from early childhood since the late 1990s. The so-called 'Kindergarten system' provides state care services from age one. Also, (equivalent to South Korea's) full-day schools that care for children up to fourth grade if families wish have been expanded. About 70% of schools are full-day schools. Germany implemented these policies mainly in the early 2000s, and it is analyzed that fertility rates positively rebounded around 2007. Furthermore, from this period, companies also began strengthening family-friendly management.

Lastly, what do you think about 'immigration,' which almost all experts mention as a low birthrate countermeasure?

Ultimately, it is a measure that must be pursued. However, thorough preparation is needed beforehand, such as deciding how to organize the control tower.

I agree. It will eventually have to be accepted. However, much preparation is needed to ensure that immigrant families integrate well into Korean society. It is also important for social stability to carefully prevent their residential areas from becoming ghettos.