Comprehensive Analysis of 218 Population Solutions: "Paternity Leave and SME Support Are Key" [K Population Strategy]

(14) Korea Institute for Health and Social Affairs, Analysis of Low Birthrate Measures
Parental Parental Leave Highly Relevant to Policy
"Related Subsidies Should Favor Small and Medium Enterprises Over Large Corporations"

Editor's NoteThe key to solving South Korea's population problem lies within companies. A workplace atmosphere that evaluates employees based on their work regardless of gender and a family-friendly culture are crucial to addressing the K population issue. Although low birth rates are influenced by multiple factors, it is important to ensure that workplace burdens do not become obstacles that make people hesitate to have children. Asia Economy visits companies leading family-friendly policies to identify the factors that helped these systems stabilize, and plans to explore various solutions with companies that lack practical conditions. Through this, we encourage change starting from companies and analyze the government's role in enabling this. We listen to voices emphasizing that company culture and atmosphere that reduce psychological burdens are more critical than financial support, and present alternatives from various perspectives.

Although paternity leave has been introduced in South Korea for nearly 30 years, childcare responsibilities still largely fall on women. Despite the government rolling out numerous low birth rate measures, including parental leave, over the past decades, these policies have failed to achieve significant results as they have not adequately reflected societal changes such as increased female workforce participation and dual-income households. This is why research highlights the necessity of "parental leave for both parents" as a core element in establishing a K population strategy.

According to the "Analysis Study on Government Policies Related to Low Birth Rate and Aging," conducted last year by the Korea Institute for Health and Social Affairs, which analyzed 218 government low birth rate policies, a culture where men utilize parental leave equally with women was identified as the most important factor in all population measures.

Comprehensive Analysis of 218 Population Solutions: "Paternity Leave and SME Support Are Key" [K Population Strategy]

This study was commissioned by the Ministry of Health and Welfare to evaluate the importance of government low birth rate policies. Despite spending a massive 280 trillion won over 16 years, the low birth rate has not been curbed, so the goal was to determine "which policies are most necessary." The research team rated projects as high, medium, or low relevance and then scored detailed strategies within each project on a 5.0-point scale.

Among the highly relevant projects, "expansion and establishment of a culture of parental leave usage by both parents" was highlighted. The report explained, "Expanding parental leave for both parents is a policy that simultaneously supports childcare, nurturing roles, and income for dual-income parents," emphasizing its "very high importance." It further added, "Childcare is not solely a woman's role, so when one spouse's parental leave ends, it is necessary to improve the system so that the other spouse can immediately take over."

In 2022, the total number of parental leave users was 199,976, of which 145,736 (72.9%) were women. Although the number of men increased by 28.5% from 42,197 the previous year to 54,240, they still accounted for only 27.1% of the total.

To activate parental leave usage among both men and women, government support for small and medium-sized enterprises (SMEs), which generally have less favorable conditions, is essential. Accordingly, among detailed tasks, "expansion of support funds for SMEs" received the highest score of 4.7 points. This was higher than similar tasks such as parental leave return support (3.3 points), focused guidance for workplaces vulnerable to parental leave (3.2 points), and increasing the income replacement rate during parental leave (2.9 points). The report explains that since SME workers generally earn less and it is difficult to find replacements, support fund policies are more urgently needed for SME employees and employers than for large companies.

While most workers are employed by SMEs, parental leave is predominantly taken in larger companies. According to statistics released by the Ministry of SMEs and Startups last year, as of the end of 2021, there were 7,714,000 SMEs, accounting for 99.9% of all companies. The number of SME workers increased by 3.9% from the previous year to 18,493,000, representing 80.9% of the total workforce. In contrast, 70.1% of male and 60.0% of female parental leave users were concentrated in companies with 300 or more employees.

Jang In-su, Associate Research Fellow at the Korea Institute for Health and Social Affairs, explained, "Since there is a gender gap in parental leave usage, the number of men taking parental leave needs to increase significantly."