The total fertility rate[1] announced by Statistics Korea has hit the latest low of 0.78. As of 2022 with 249,000 newborns, South Korea has recorded the lowest fertility rate among all OECD countries for 10 years straight. This is why phrases like "population cliff" and "population crisis" are regularly heard in recent news. Meanwhile, the "Future Population Projection" of the same year predicted that by 2050, the working age population (ages 15 to 64) would decrease to 51.1% (71.0% as of 2021), and the GDP per capita growth rate would be less than 1%. If Korea of 2050 is a country of 10 people, four would be senior citizens and there would be not even one child (ages 0-14). Now, let's take a look at the current status, causes, and various interpretations of the population crisis in Korea; which has been only discussed but had no actual progress made over the past few decades.

The Upcoming Population Crisis of Korea

The low birthrate and aging population are by far the main reasons of Korea’s population structure problem. Some even predict that the median age[2] of Korea, which is 45 years of age, will rise to 61 years old by 2060. The natural decline of the population is common for developed countries, but in the case of Korea it shows several peculiarities. Firstly, Korea’s demographic deformation is accelerated by the urban-rural disparity and the monopoly of resources in the metropolitan area. Seoul and its metropolitan areas are sucking in all local infrastructures such as jobs, education, housing, and the population like a massive black hole. 52% of the Korean population lives in the Seoul metropolitan area, but the ccounts for only 12% of the country. Intense competition for limited resources such as real estate is bound to drive young beginners of the society to vulnerability. In addition, Lee Sang-lim, a researcher at the Korea Institute For Health And Social Affairs, indicated that the fertility rate has sharply declined compared to the baby boomer generation (born 1955- 1974), at which 1 million babies were born each year. He said, “It took only 40 years to go from 800 thousand births in the 80s to 250 thousand, […] Since the 2000’s after the IMF crisis, the birth rate of 600,000 in 2000 has fallen by one-third in just 20 years.”

Causes of Population Decline and Crisis

Difficulties in Social Circumstances

Dr. Samsik Lee, director of Hanyang University's Aging Society Research Institute, cited the society’s structural problems such as jobs, residence, and retirement security as the first causes of the population cliff. According to the Bank of Korea, in the second quarter of last year a rise in debtors in their 20s due to overinvestment in real estate or cryptocurrency marked the highest rise among all age groups. Analysts say behind that were and job shortages and housing instability caused by soaring housing prices. Second, Dr. Lee pointed out that there isn’t enough social atmosphere that accepts parental leave or flexible work arrangement systems to benefit those in the blind spots of childcare benefits, such as small business workers and self-employed people. According to the National Assembly Research Service's article titled "Reality of Childcare Penalty, Improvement Tasks to Ensure Childcare Leave," a total of 319,101 parents gave birth in 2019, but only 68,863 (21.6%) actually took their parental leave. In another survey conducted by the Ministry of Gender Equality and Family in the same year, respondents cited "at-work atmosphere" (68.8%) and "economic burden" (26.6%) as the main reasons for the inability to use the work-family balance support system (maternity and parental leave, flexible work, childcare support etc.). In addition, the research confirmed that lower household income, smaller business, and temporary employment were attributing factors to lower awareness of the work-family balance policies.

Changes in Personal Life and Values

According to the 2020 Population and Housing Census, the rate of unmarried people in their 30s was 50.8% for men, and 33.6% for women. As social conditions have become disadvantageous to young people, more and more young people choose to give up on marriage and childbirth in consideration of themselves and their possible future children. Unlike the past, when the youth were able to be optimistic about the future growth of the economy, the youth these days say that it's hard to take the high-risk choice of supporting families and raising children. While marriage and parenting are recognized as one option in life, they are no longer seen as essential. Hence marriage and childbirth, compared to the economic burden of parenting such as high housing prices and private education costs, has lost much of their validity. Some young people refuse to marry and give birth due to personal beliefs structured by gender conflict and opposition to the remaining patriarchal culture.

Additionally, Korea's traditional gender role structure, such as solitary parenting and parental conflict, has a negative effect, especially on women. According to a survey by the Korea Population and Health Welfare Association, women (56.0%) were more negative about marriage than men (43.0%). Women who expressed their disagreement on childbirth (65.4%) replied that young people "do not want to sacrifice my own life for the child" as the second highest reason. On the other hand, even if they are willing to marry and give birth, financial difficulties prevent them from complementing their will because they do not want to let their children go through a painful life like themselves due to a situation in which they are not financially stable.

Is the Shrinking Population a Problem, or a Favorable Factor?

Can It Be a Favorable Factor?

Some demographers have come up with a reverse idea of calling a shrinking population a blessing. John Wilmoth, director of the Population Division of the United Nations Bureau of Economic and Social Affairs told The New York Times, "the doom-and-gloom assessments about declining fertility rates and depopulation tend to be overstated… Japan has been battling population decline since the 1970s, but it remains one of the world’s largest economies.” At first thought, people might think that if the population decreases, environmental problems and the quality of individuals can be enhanced by cooling down the overheated competition on resources. Joel E. Cohen, a professor at Rockefeller University, pointed out the fact that Finland (with a fertility rate of 1.39), which has a high OECD happiness index despite its low total fertility rate, is not much different from the United States (1.66) and Japan (1.3). Furthermore, referring to the cases of countries with high educational standards and technological skills even with a small population such as Norway and Singapore, he argued that even if population growth decelerates, GDP per capita will grow much faster. Emerging technological developments such as AI as an alternative labor force added hope to the feasibility.

It Is a Serious Problem!

However, regarding the positive interpretation of population decline based on this theory of population adequacy, Korean experts expressed concern that it is a mere "ideal hypothesis." The immediate aftermath of the population decline is a shortage of labor. In general, in our capitalistic society, labor productivity (added value divided by the number of workers) must be high enough to increase GDP. If the number of workers is reduced through mechanization and automation, labor productivity per capita increases. But the problem is the added value, which is the numerator. This is because labor costs account for a large part of added value. When labor costs fall, the consumable population decreases, and in the end, productivity improvement alone cannot avoid deflation[3] due to a decrease in the working-age population in the long term. Dr. Samsik Lee also said, "What is more important than the population is the proportion of the elderly and working-age population to the total population," stressing once again the special situation in Korea, where the elderly population is much higher than other countries.

The Population Policy in Korea Needs Change

Since 2006, the government has allocated a total budget of 280 trillion won[4] to resolve the low birthrate and created 2,000 related systems, but no substantial progress has been made. Experts pointed out that the project was only a ‘one-off event,’ despite the complexity of various areas in the low birthrate, such as wages, high housing prices, and unequal structures. Analysis has shown that a long-term response and a complex approach to problems is needed instead of simply a policy stance such as generous financial support including parental benefits and empty childbirth promotion campaigns. The report by the Korea Institute of Public Finance, which said higher housing prices lead to a decrease in marriage and fertility rates, said the government needs to stabilize housing supply, provide financial assistance to rent and purchase homes for young people, and guarantee stable jobs. Besides the Low Birth Rate Countermeasures Committee, which is currently an advisory committee operated under the president, and the National Assembly, the Korean government needs a pan-ministerial control tower that can exert practical influence in various areas of administration, including welfare, finance, and housing.

The demographic crisis has been mentioned as social problems since 2002. However, after 20 years of getting so used to it and lacking positive changes, the Republic of Korea today is facing a looming demographic cliff. Ma Kang-Rae, a professor of the Department of Urban Planning and Real Estate at Chung-Ang University, says, "If we focus only on childbirth, we will never be able to solve the problem of low birth rates. We should focus on the situation where the young population is anxious about the future." It is time for the government to take effective measures based on the situation of young people, and make childbirth a ‘free’ option for young people in consideration of their changes in personal values.