"'Pay Money and Have Kids' Fast-Paced Korea... Time to Refer to Germany's 'As You Can Afford' Parental Leave [K Population Strategy]"

(44) Interview with Jeong Jae-hoon, Professor of Social Welfare at Seoul Women's University
Increasing Life Satisfaction is Key to Having Children... Monetary Handouts Have Limits
Top Priority is 'Work-Family Balance'

Editor's NoteThe key to solving South Korea's population problem lies within companies. A corporate atmosphere that evaluates work regardless of gender and a family-friendly culture are crucial to addressing the K-population issue. While low birth rates result from complex factors, it is important to ensure that workplace burdens do not become obstacles that make people hesitate to have children. Asia Economy visited companies leading family-friendly policies to identify the factors that helped these systems take root stably, and plans to explore multifaceted solutions with companies that lack realistic 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 rather than financial support are key, and present alternatives from various perspectives.

Professor Jaehoon Jung. Photo by Dongju Yoon doso7@

"The entire Republic of Korea is suffering from chronic illness." Professor Jeong Jae-hoon of the Department of Social Welfare at Seoul Women's University, whom Asia Economy recently met, began speaking busily as soon as he arrived at the interview location, taking out his laptop, tablet PC, keyboard, and mouse from his bag. Warning of the crisis facing Korea's low birth rate problem, Professor Jeong displayed data on his laptop screen showing a plunging line graph. He emphasized, "Korea's low birth rate issue is ultimately linked to economic growth," adding, "Companies must realize that a crisis is coming in labor supply. It is time to refer to Germany's example."

The Era of Growth is Over... Continuing Like This Will Only Increase Conflict

Professor Jeong analyzed that the side effects of state-led growth have led to the low birth rate problem. Since the 1960s, Korea focused all its capabilities on industrialization, increasing its Gross Domestic Product (GDP) nearly 30 times during the developmental dictatorship period. However, society has become more unequal. According to Statistics Korea, the net asset share of the top 10% wealthiest households was 42.1% in 2017 but increased to 43.5% last year. This means the top 10% of households hold nearly half of the total net assets. Professor Jeong said, "Although development was led by a dictatorship, the most important value agreed upon by Korean society was growth," adding, "However, neglecting values such as distribution has led to the low birth rate problem with a total fertility rate below one."

Professor Jeong explained that an era seeking quality of life instead of growth has arrived. To have children, two conditions must be met: 'material issues' and 'life satisfaction,' but there is still a long way to go. He emphasized that the 'life satisfaction' axis is shaky, causing people in Korea to give up on having children. He said, "Korea's unique hyper-competition, regional imbalances, and income disparities between classes have lowered quality of life," adding, "Men face the burden of supporting families, and women face career interruptions, both affecting quality of life."

He warned that without improving quality of life, solving the low birth rate problem will lead to other side effects. France is an example. France's total fertility rate fell to 1.66 in 1994 but rose to 2.0 in 2013 by actively accepting immigrants. However, social conflicts due to discrimination against immigrants are severe. In June last year, Nael Merzouk, a North African teenager, was shot and killed while fleeing a police checkpoint in Nanterre, a suburb of Paris. This sparked nationwide protests against racial discrimination in France. The protests involved arson and looting. Professor Jeong said, "Immigrants in France have their basic needs like housing met, yet they are engulfed in tremendous anger," adding, "If Korea does not solve inequality issues from a long-term perspective, social conflicts will be unavoidable."

Even Low Birth Rate Measures are 'Ppalli Ppalli'... "Corporate Culture Change Needed"

"A nation built on the value of growth cannot be solved with a few policies." Professor Jeong shook his head, pointing out that current low birth rate measures resemble those from the state-led growth era. Government ministries focus on short-term measures to produce 'ppalli ppalli' (quick-quick) results, meaning distributing cash. Even the performance measurement counts how much cash was given to how many people, not the actual contribution to increasing birth rates. Professor Jeong said, "Instead of creating an environment where children can be raised, the state simply gives money to people of marriageable age to have children," adding, "Corporate welfare programs that claim to contribute to solving the low birth rate problem are similar to state-led cash distribution policies."

He proposed work-family balance as the top priority. Professor Jeong said, "Work-family balance is a short-term measure for the low birth rate problem," adding, "Women should be able to work without disadvantages from childbirth, and men should be as devoted to family as women. Without this, we cannot even start solving the low birth rate problem." The medium-term measure linked to long-term inequality resolution is "change in Korean corporate culture." He said, "Only after the recognition that family is important spreads within companies can issues like inequality be addressed," adding, "Employees should not feel that taking parental leave or flexible work puts them behind in workplace competition."

Professor Jaehoon Jung. Photo by Dongju Yoon doso7@

Germany Haunted by Nazi Legacy... Companies Step Up to Address Low Birth Rate

Professor Jeong advised referring to Germany's approach to solving the low birth rate problem when setting medium-term measures. Since the 1980s, Germany has suffered from chronic low birth rates, with total fertility rates stuck around 1.3. A pessimistic atmosphere that "it's already too late" had formed. In response to chronic low birth rates, the German government attempted a paradigm shift in population policy in 2007 by providing parental allowances. However, Professor Jeong explained that companies took a more active role in addressing the low birth rate problem than the government. The government supported companies working on work-family balance from behind the scenes. He said, "During the Nazi era, Germany promoted state-led childbirth to increase the population for war," adding, "Due to memories of the Nazis, German politicians cannot openly encourage childbirth. Companies have no choice but to take on that role."

German companies acted directly to alleviate concerns about labor shortages. Prolonged low birth rates have led to shortages of skilled professionals. In fact, as of last year, Germany was short about 285,000 STEM professionals compared to available jobs. Accepting immigrants also has limits. Since the 1960s, Germany has implemented foreign worker migration policies, and the third generation of immigrants has settled, but they are not considered fully integrated. Even third-generation immigrants cannot speak German well because first- and second-generation parents from Islamic cultural backgrounds do not assist with socialization. Naturally, without German proficiency, they cannot work in professional jobs in Germany.

The methods adopted by German companies?such as flexible working hours and parental leave?already exist in Korea. Professor Jeong said, "In Korea, parents are encouraged to take parental leave, but in Germany, it's the opposite," adding, "People who prioritize career or money take short parental leave and return to work. The important thing is a culture where employees who have children can freely manage their time." After companies focused on work-family balance and the government supported them, Germany's total fertility rate rebounded to 1.58 in 2021.

Korea Will Also Face Labor Shortages... Participation of Korea Economic Association and KCCI Needed

Korea's labor force decline is also inevitable. According to Statistics Korea's 'Future Population Projections,' the working-age population (ages 15-64), which was about 36.328 million this year, is expected to decrease to 32.418 million by 2034. In 2039, it will fall below 30 million for the first time at 29.552 million, and by 2062, it is projected to decline to 19.834 million. In 2062, the elderly population aged 65 and over is expected to be 18.647 million, nearly equal to the working-age population.

Professor Jeong pointed out limitations in efforts led by the Ministry of Gender Equality and Family to solve labor issues. He said, "Currently, the Ministry of Gender Equality and Family issues family-friendly certifications, but as of last year, only 5,911 companies were certified," adding, "This is less than 1% of all companies. Such numbers limit the ability to drive change in Korean society."

Instead, he called for participation from the Korea Economic Association and the Korea Chamber of Commerce and Industry (KCCI). Professor Jeong said, "The economic sector currently worries about shrinking domestic markets due to population decline, but the core issue is that companies will lose the skilled labor force they need," adding, "We stand at a crossroads whether to become a country leading advanced industries like AI or a country subcontracting on foundations built by others. Ultimately, the actors must step up. Voluntary efforts by companies are necessary."

Special Reporting Team 'K-Population Strategy - Gender Equality is the Answer'

Reporters: Kim Yuri, Lee Hyun-joo, Jeong Hyun-jin, Boo Aeri, Gong Byung-seon, Park Joon-i, Song Seung-seop
Kim Pil-su, Economic and Financial Editor