Costly fertility rate solutions by gov't may not be enough, experts say

Social Affairs

Published: 19 Jan. 2024, 19:03 Updated: 28 Jan. 2024, 15:52

Costly fertility rate solutions by gov't may not be enough, experts say

Han Dong-hoon, interim leader of the People Power Party, right, and Lee Jae-myung, leader of the Democratic Party, speak in a meeting at the National Assembly on Dec. 29, 2023. [KIM SEONG-RYONG]

More stipends will not solve Korea's ultralow birthrate, several demographic experts argued as the People Power Party (PPP) and Democratic Party (DP) push for cash awards, housing subsidies and parental leave policies for families with children ahead of the general elections in April.

"The two parties seem to believe that the cause of the low fertility rate is a lack of welfare policies, but that's not why young people are not having children in Korea today,” Cho Young-tae, a professor at Seoul National University's Graduate School of Public Health, said.

The leaders of the PPP and DP have put forward their proposals to solve Korea’s demographic crisis, as the country continues to annually break its own record of the world’s lowest fertility rate.

Korea’s total fertility rate, or the average number of children a woman is expected to have during her reproductive years, was 0.78 as of 2022, the lowest in the world.

Korea’s fertility rate has been in the red zone of below 1.3 since the early 2000s, with some research both local and international pointing to serious ramifications in terms of both its labor force and economic capacity, and even its very existence as a nation.

Various administrations have injected 280 trillion won ($209.2 billion) into the cause over nearly two decades to try to turn things around, but to no avail.

[WHY] Don't Koreans have kids anymore?

“There are questions about how effective cash support will be if the systems and practices related to marriage, childbirth and child care remain unchanged,” Choi Seul-gi, a researcher at Korea Development Institute, said. “Cash rewards may have some effect, but only temporarily.”

The PPP has largely put forward policies focusing on family-friendly policies at work, and the DP on large-scale housing stipends and cash subsidies.

The two parties offered similar policies in the creation of a demographics bureau or department. The PPP pledged to establish a demographics bureau to be overseen by the deputy prime minister, and the DP to establish a population decline crisis response department.

Both parties also promised to automate the parental leave system so that any worker can apply for leave and bypass the office or government bureaucracy.

More significant differences could be seen in their other pledges.

Baby cradles are empty in the newborn's nursery at public postpartum center in Seoul on Dec. 26 last year. [YONHAP]

The PPP said it will mandate a month of paid paternity leave for fathers. The current mandate for fathers is just 10 days.

It also said it will increase the monthly minimum salary for paid child care leave from 1.5 million won to 2 million won, and increase the subsidy granted to companies in hiring short-term replacements from 800,000 won to 1.6 million won per worker, and up to 2.4 million won in the case that the replacement is a worker returning after a long-term hiatus due to child care or a retired person.

It also promised incentives to companies if they hire foreign workers as replacements for those on child care leave.

The DP promised public rental housings sized 854 square feet for families with two children, and of 1,174 square feet for families with three children. Houses of this scale tend to come with two to three rooms in addition to a living room.

It said it will expand the 100-million-won housing loan duration for newlyweds to up to 10 years, the interest rates of which will reduce the more children the couple has.

The liberal party also said it will give a monthly stipend of 200,000 won for each child aged between 8 to 17.

It also pledged an additional 500,000 won monthly salary bonus for those who take maternity or paternity leave at an SME.

People in their 20s and 30s have shown mixed responses to the proposals.

"Ultimately I think these are good measures for people who are thinking about having children anyway,” 33-year-old Park Byeong-jun said.

Kim Jeong-hwa, a 38-year-old woman preparing to get married in March, said these measures are not convincing enough to make her bring a child into the highly competitive Korean society.

“Competition starts early for children, from getting into English kindergartens to attending coding academies, and these competitions are costly,” she said. “I don’t have the confidence to bring my child into this competitive world.”

A 40-year-old woman surnamed Oh, who’s been married for six years, says the problem has less to do with money and more to do with the structure of Korean society.

Alluding to the parental leave policy proposals, she said, “Flexible working, as much as we want it, is not possible in a company still stuck in rigid hierarchical practices.”

Oh works some 12 hours a day on average.

“How will I find child care that I can afford?” she said.

A teacher in her 20s surnamed Ji also said the parties’ policy proposals are not enough to convince her.

“It costs over 200 million won to raise one child. The government is saying it will give 100 million won if you give birth to three children. I don’t think we can increase the birth rate with money anymore,” she said.

Professor Cho called for structural changes to address the way young people work today.

“We need to change the environment to improve the lives of young people,” Cho said. “We need to break away from the manufacturing-oriented industrial structure and create new economic structures to ease the harsh competition for survival, especially in the metropolitan areas.

“Creating a new demographics department cannot be a one-stop solution,” he added. “We need to get down to the nitty-gritty to change the very equations of how we live and work in Korea.”

BY ESTHER CHUNG, SHIN SUNG-SHIK [chung.juhee@joongang.co.kr]