Era of Fathers Taking 36% of Parental Leave, but... With 3 Trillion Won in Spending, Calls for Fund Restructuring Grow

180,000 Took Parental Leave Last Year... Up 39.1% From Previous Year
Rapid Fiscal Expansion Raises Concerns Over Fiscal Soundness
"Limits Reached With Employment Insurance Fund-Centered Financing Alone"

Last year, the number of people who received parental leave benefits exceeded 180,000. This represents an increase of nearly 40% from a year earlier. In particular, fathers accounted for 36.5% of all beneficiaries, the highest level on record. This is seen as a result of the government expanding both the benefit level and the duration of parental leave in response to the severe low birth rate.

However, as related fiscal spending has rapidly expanded to around 3.6 trillion won, critics argue that it is difficult to secure sufficient funding solely through the current Employment Insurance Fund. Experts suggest that, to secure stable financial resources, the government should consider various options, including expanding support from the state budget and creating new funds.

On the 26th, the Ministry of Employment and Labor held a forum titled "Performance of the Parental Leave System and Sustainable Financing Structure" together with the Korea Labor Institute. The forum was organized to review the performance of the parental leave system and discuss a sustainable financing structure at a time when responding to low birth rates and supporting work-family balance have emerged as national priorities.

To encourage the use of parental leave, the government significantly strengthened childcare support schemes last year. The maximum monthly parental leave benefit was raised from 1.5 million won to 2.5 million won, and when both working parents take parental leave together, the maximum leave period was extended from the previous 12 months to 18 months.

As a result, the number of beneficiaries of parental leave benefits rose to 184,329 last year, an increase of 52,000 people (39.1%) from the previous year. Compared with 10,000 people in 2005, this is more than an 18-fold increase. Even compared with 87,000 people in 2015, 10 years ago, the figure has more than doubled.

In particular, the number of male beneficiaries reached 87,000 last year, accounting for 36.5% of all parental leave takers. This is the highest level ever. In 2020, the share stood at 23.5%. In five years, it has risen by 13 percentage points.

Jeong Seongmi, a research fellow at the Korean Women’s Development Institute, who presented the performance of the parental leave system at the forum, said, "As a result of strengthening the 'Daddy Bonus' scheme and shared caregiving between spouses, male participation has increased, and we have taken a step closer to making parental leave a universal practice."

The rate at which mothers’ paid parental leave benefits replace their total annual income also rose sharply to 47.5% last year, up from 38.6% in 2023. Jeong explained, "Although it is still lower than in the Netherlands (70.0%), Japan (61.1%), Germany (55.0%), and Denmark (49.7%), it has increased to a level that is quite close to these countries."

However, as the activation of the parental leave system has led to a rapid expansion of fiscal spending, concerns are growing over fiscal soundness. Currently, parental leave benefits are paid out of the unemployment benefit account within the Employment Insurance Fund. Due to the increase in beneficiaries, spending on parental leave benefits has surged from 1.2121 trillion won in 2020 to 3.6292 trillion won last year.

Jeong said, "As spending on maternity protection within the Employment Insurance Fund has surged, concerns are being raised about fiscal soundness," adding, "Although transfers from the general account have increased, they are not sufficient compared with the scale of the expansion in parental leave spending."

Experts agreed that, for the system to continue delivering results, a structural shift away from relying mainly on employment insurance as the funding source is necessary. Park Eunjung, a research fellow at the Korea Institute of Child Care and Education, said, "We need to consider various options, such as separating a dedicated account within the Employment Insurance Fund or creating a new fund," and emphasized, "Changes in benefit levels must be combined with changes in the financing structure to secure sustainability."

Kwon Changjun, Vice Minister of Employment and Labor, who attended the forum, said, "The increase in the number of beneficiaries of parental leave benefits is clear evidence that the system is changing practices on the ground." He added, "Childcare support benefits are not a cost, but an investment in the future of the Republic of Korea," and went on to say, "For that investment to continue, cooperation from society as a whole is needed."