[Meanwhile] A strange type of tokophobia

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[Meanwhile] A strange type of tokophobia

The author is an economic news reporter of the JoongAng Ilbo.

A civil servant in her 30s is allowed to have parental leave of up to one year. But she recently returned to work four months early because husband’s salary and parental leave pay were not enough with the recent high prices and interest rates. “I returned to work early to get the Lunar New Year’s holiday pay,” she said. “It is a luxury to think about a second child when half of the income goes to paying off loans.”

Is her case unusual? Statistics say it is not. According to the Bank of Korea, the household debt service ratio (DSR) of borrowers in their 30s to 40s are 44.2 percent and 41.3 percent, respectively, as of the end of September 2022. It means that nearly half the income goes to paying loan principal and interest.

According to the Ministry of Employment and Labor, the length of parental leave used last year was nine months, down half a month from the previous year. While women took 9.6 months of parental leave, men took 7.3 months. Economic burden seems to be the major factor.

The government has increased the income replacement rate of parental leave benefits amid the low birthrate. Since last year, one parent taking leave is paid 80 percent of their wage, or up to 1.5 million won ($1,100) monthly, for one year.

However, because 25 percent of the money is paid six months after returning to work, a maximum 1.125 million won is actually deposited in the bank during the leave. The amount is far less than the minimum living cost of a three-person household at 2.66 million set by the Ministry of Health and Welfare.

The main cause for the growing phobia of having kids is the economic burden. A recent survey on 900 men and women in their 20s and 30s nationwide showed that seven out of 10 respondents named the main cause to be the burden of child support (27.4 percent), job insecurity (20.7 percent), and housing instability (19.9 percent). Increasing private education costs weigh down on the reality as another economic burden in the near future.

Korea’s total fertility rate is 0.78. On March 8, President Yoon Suk Yeol ordered the government and the Committee for Low Birthrate and Aging Society to come up with “bold and certain measures that are palpable.”

While government officials are looking at many causes and more plans, they need to choose and concentrate. How about shaking up the board by offering some drastic support even with a sunset provision? It may have side effects, but there is no other breakthrough in sight.
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