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Why does South Korea have low birth rates?

Research suggests that rising childcare costs may be at the heart of the fertility decline in South Korea. Confucian values view education as the primary vehicle to achieve high social status and economic prosperity. This view has resulted in an “education fever” in Korea.

Korean parents often believe that it is their duty as parents to provide the resources necessary for their children to perform well in school and to have an educational advantage over their peers. Therefore, parents often send their children to private education centers, where they get tutored in everything ranging from Korean, English, math, writing, arts, music, and even physical education. These private education centers are notoriously expensive, and sending one's children to these centers increases childrearing costs significantly. The high costs of raising children are prompting some parents to limit their childbearing to one child or forego having children altogether.

Another explanation for why fertility is so low in South Korea centers on high housing costs. South Korea has one of the priciest housing markets in the world, and like many other countries, has recently experienced a dramatic rise in home prices. Research has shown that women living in locales with expensive housing tend to have children at older ages than those who live in locales with more affordable housing. Expectant parents may delay having children when they experience housing affordability issues, as they will need to divert resources for childcare, medical care, and food.

The third reason centers on the economic uncertainty that young men and women in South Korea face. After the Asian financial crisis in 1997, South Korea witnessed a rise in contract, precarious, and nonstandard work. Young men are having greater difficulty transitioning into stable adult economic roles, increasing the number of delayed and even foregone marriages. Because fertility occurs mainly within the context of marriages in South Korea, declining marriage rates mean decreases in fertility. Even married couples may delay or forego having children if there is high economic uncertainty. The rise in precarious work may have injected economic uncertainty into the lives of young couples and depressed fertility.

Overall, the literature on fertility suggests that the declining economic prospects of young individuals, coupled with rising housing and childcare costs, have created the perfect storm for the unprecedented drop in fertility.

Rather than implementing short-term pro-natalist policies, like offering temporary cash incentives to new parents, the South Korean government should develop a long-term plan to develop an environment where parents can raise their children without having to worry about childrearing costs. They should invest in creating a network of high-quality childcare centers that new parents can access at low cost. They should also endeavor to increase the country's supply of affordable housing. Such long-term investments may hold the key to increasing fertility rates and slowing down the aging of the population.

Older, poorer, more dependent

Older, poorer, more dependent

Countries need a total fertility rate of 2.1 children per woman to replace their population, when the effects of immigration and emigration aren't considered. And South Korea's fertility rate has been consistently below that number since 1984, when it dropped to 1.93, from 2.17 the year before.

What makes the South Korean fertility rate decline more astonishing is the relatively short period in which it has occurred.

Back in 1800, the U.S. total fertility rate was well over 6.0. But it took the U.S. around 170 years to consistently drop below the replacement level. Moreover, in the little over 60 years in which South Korea's fertility rate fell from 6.0 to 0.8, the U.S. saw a more gradual decline from 3.0 to 1.7.

Fertility decline can have a positive effect in certain circumstances, via something demographers refer to as "the demographic dividend." This dividend refers to accelerated increases in a country's economy that follow a decline in birth rates and subsequent changes in its age composition that result in more working-age people and fewer dependent young children and elderly people.

And that is what happened in South Korea—a decline in fertility helped convert South Korea from a very poor country to a very rich one.

Behind the economic miracle

Behind the economic miracle

South Korea's fertility decline began in the early 1960s when the government adopted an economic planning program and a population and family planning program.

By that time, South Korea was languishing, having seen its economy and society destroyed by the Korean War of 1950 to 1953. Indeed by the late-1950s, South Korea was one of the poorest countries in the world. In 1961, its annual per capita income was only about US$82.

But dramatic increases in economic growth began in 1962, when the South Korean government introduced a five-year economic development plan.

Crucially, the government also introduced a population planning program in a bid to bring down the nation's fertility rate.

This included a goal of getting 45% of married couples to use contraception—until then, very few Koreans used contraception.

This further contributed to the fertility reduction, as many couples realized that having fewer children would often lead to improvements in family living standards.

Both the economic and family planning programs were instrumental in

moving South Korea from one with a high fertility rate to one with a low fertility rate.

As a result, the country's dependent population—the young and the elderly—grew smaller in relation to its working-age population.

The demographic change kick-started economic growth that continued well into the mid-1990s. Increases in productivity, combined with an increasing labor force and a gradual reduction of unemployment, produced average annual growth rates in gross domestic product of between 6% and 10% for many years.

South Korea today is one of the richest countries in the world with a per capita income of $35,000.


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