[General Election Pledge Analysis③] Different Calculations on Low Birthrate by Ruling and Opposition Parties... System Establishment vs. Cash Support

New Ministry Established to Address Low Birthrate
People Power Party Mandates 1-Month Paid Paternity Leave
Democratic Party Proposes 100 Million KRW Loan with 10-Year Term for Newlyweds

The low birthrate measures of the two major parties differ in direction. The People Power Party focused on building and supplementing existing systems and institutions. In contrast, the Democratic Party of Korea proposed a form of direct cash support as a modified version of basic income.

The People Power Party prominently proposed mandatory one-month paid paternity leave (spouse childbirth leave). They announced plans to raise the upper limit of parental leave pay from the current 1.5 million KRW to 2.1 million KRW and allow automatic leave simply by applying for parental leave. They also announced as their first pledge the mandatory notification of flexible working hours during childcare and the phased free implementation of Neulbom School. Han Dong-hoon, the emergency committee chairman of the People Power Party, recently stated, "We will fully exempt university tuition fees for all children in families with three or more children. We will increase the free childcare support fund for the Nuri curriculum starting from age five (expected to cost 700 billion KRW)."

The People Power Party plans to establish a 'Population Department' to oversee low birthrate policies and operate a special low birthrate account to secure approximately 10 trillion KRW in funding. They also revealed that the funds for expanding parental leave for self-employed workers will be sourced from this special low birthrate account. Hong Seok-cheol, head of the People Power Party’s pledge headquarters, explained, "This is differentiated from purposeless cash support. It is a system designed to allocate budgets appropriately where truly needed."

The Democratic Party announced a low birthrate pledge to provide all newlywed couples with a 100 million KRW loan per household with a 10-year maturity. The government guarantees the loan, and banks handle the lending. The principal and interest are reduced differentially based on the number of children born: zero interest conversion upon the birth of the first child, zero interest plus 50% principal reduction upon the second child, and full exemption of principal and interest upon the third child. The current child allowance of 200,000 KRW per month for children under eight years old will be expanded to cover children under 18. When a child is born, the government will deposit 100,000 KRW monthly into a fund account until the child graduates from high school (Our Child Independence Fund). Parents can also contribute 100,000 KRW monthly to the fund without gift tax, and all earnings are tax-exempt.

They also proposed supplying 250,000 half-price apartments for youth and newlyweds and supporting public rental housing with sale conversion of 24-pyeong units for families with two children and 33-pyeong units for families with three children. The estimated budget is about 23.5 trillion KRW. The Democratic Party is also pushing to establish a 'Population Crisis Response Department' as a dedicated unit for low birthrate response. Kim Jong-su, head of the Democratic Party’s policy office, drew a line by saying, "There are also pledges for installment-type support in the form of funds, so it might be a matter of interpretation rather than simply seeing it as cash handouts."

"Leave system utilized only in large companies" vs "Cash support lacks sustainability"

Experts generally evaluated that the People Power Party’s low birthrate pledges focus on institutional improvements. Yoon Ja-young, a professor of economics at Chungnam National University, analyzed, "The ruling party has proposed many policies that tightly fill institutional gaps such as support for substitute workers in small and medium enterprises." However, she pointed out, "There are virtually no policies related to reducing working hours," and "These policies have limitations as they can only be utilized by regular workers or in large and medium-sized companies." She also questioned the feasibility of expanding parental leave for self-employed workers.

Regarding the Democratic Party’s pledges, Professor Yoon said, "They can be seen as filling gaps from another perspective, covering from childbirth to when children grow up to 18 years old," and added, "It is difficult to simply evaluate cash payments as wrong. Many systems currently do not exist, and from the parents’ perspective, the more cash support, the better."

On the other hand, Song Da-young, a professor of social welfare at Incheon National University, criticized, "Cash support is not sustainable." Professor Song said, "Policies that target recipients linked to childbirth should not be implemented," and "The supply of 250,000 half-price apartments is likely to benefit only a few. The approach of 'We will give you a house if you have children' is really wrong." She emphasized, "The highest aspect of welfare is employment," and "The most important thing is to enable people to maintain jobs while having and raising children."

There are also claims that the low birthrate measures proposed by both parties focus only on current issues and that more long-term discussions are needed. Park Yang-su, former head of the Bank of Korea Economic Research Institute and current head of the Korea Chamber of Commerce and Industry’s Sustainable Growth Initiative (SGI), said, "Companies may face shrinking domestic markets or labor shortages due to low birthrates. There is an opinion that companies should take responsibility and bear part of the burden as long as low birthrate solutions do not come with strong regulations." However, Park added, "It seems there have been no low birthrate policies discussing changes in labor structure due to artificial intelligence (AI) or robots."