Local governments dish out the cash to stop demographic decline

Social Affairs

Published: 22 Jan. 2024, 19:06 Updated: 23 Jan. 2024, 11:49

Local governments dish out the cash to stop demographic decline

Kim's triplets play with toys at their home in Gangjin County, South Jeolla. [HWANG HEE-KYU / JOONGANG PHOTO]

Local governments nationwide are offering generous cash subsidies and housing benefits to encourage residents to have more children.

Gangjin County in South Jeolla provides a monthly childcare subsidy of 600,000 won ($450) per child. The subsidies are provided for seven years starting from the baby’s birth. The locality began providing the subsidy in October 2022.

The county also provides 700,000 won in parenting income and a 300,000-won child stipend every month for any babies born there.

There were 154 births in the county last year, a 65.6 percent increase from just 93 in 2022.

The locality believes the stipends and public childcare services contributed to the increase in births.

“Thanks to the monthly stipend, we can raise triplets without a financial burden for their diapers and baby formula,” said Kim, a 42-year-old mom in Gangjin County.

Her family has received 4.2 million won monthly since the triplets’ delivery last April.

“If it weren’t Gangjin County, parenting would be extremely challenging, especially when it's getting more expensive to raise children,” she added.

If Kim’s family lives in Gangjin until the triplets turn eight, they can receive up to 217.5 million won.

Kim's triplets play with toys at their home in Gangjin County, South Jeolla. [HWANG HEE-KYU / JOONGANG PHOTO]

Other localities offer substantial subsidies or cash support to encourage pregnancies and births.

Yeongdong County in North Chungcheong offers up to 124.3 million won in cash to people who get married and have children there.

Married couples between the ages of 19 and 45 who move to the country receive a 10 million won subsidy to help them settle.

The county also provides parents with 33.8 million won in subsidies until a child turns eight. After a child enters school, the country offers 27.5 million in scholarships and gifts to celebrate admissions and graduations.

The county covers up to 6 million won in interest over three years for newlyweds who take out housing loans. It also offers up to 47 million won in celebratory cash and medical subsidies during pregnancies and birth.

Several localities lend renovated homes in the countryside to newlyweds at low costs.

Occupants' belongings are placed inside an affordable housing unit provided by Hwasun County in South Jeolla in July 2023. The occupant needs to pay only 10,000 won each month. [YONHAP]

Hwasun County in South Jeolla provided 100 apartment units to the newlyweds and young Koreans. Occupants must pay only 10,000 won monthly for rent with no deposit required.

The county’s newborns climbed nearly 20 percent over a year. A total of 212 babies were born last year, while only 178 were born in 2022.

The city of Naju in South Jeolla went further. It supplied 30 house units for free to young professionals who worked in Naju but were not from Naju itself.

South Jeolla Governor Kim Yung-rok meets young residents living in ″$10 rental housing″ in Naju, South Jeolla in January. [NEWS1]

The city removed a condition attached to the childbirth incentive that reserved benefits for those who lived in the town longer than six months. Thus, any new parents — living in the city for a single day — can enjoy the benefit.

The city hands out 3 million won for a firstborn, and 5 million won for a second-born. For a third newborn or more, 10 million won is provided.

With South Jeolla-based localities attracting residents with such housing benefits, the provincial government of South Jeolla itself threw its hat into the ring.

The provincial government is pushing a project to provide 1,000 affordable houses in 16 depopulating counties — with 100 to 200 units provided each year.

Seoul city is pursuing multidimensional efforts to escape from the low fertility crisis.

A woman consults about infertility issues at the Songpa Maternity Care Center in Songpa District, southern Seoul, in March 2023. The Seoul Metropolitan Government announced it would offer medical procedure expenses to all married couples with infertility issues and grant 2 million won for each woman in their 30s and 40s who wants to freeze her eggs. [NEWS1]

The city has poured 14.7 trillion won into 28 projects to boost birthrates over the last five years.

Korea’s capital has the nation's lowest total fertility rate — the average number of births a woman is expected to give during her reproductive years. Seoul's total fertility rate was 0.59 in 2022, while the country's rate was 0.78.

Seoul differentiates itself from other localities by providing cash support to subfertile and infertile couples.

The city offers 2 million won to women in their 30s and 40s who want to freeze their eggs. Any married couple struggling to conceive a child can receive a treatment subsidy of up to 1 million won per procedure, including in vitro fertilization.

The city also fully funds the “child safety insurance” premium for twins, triplets and quadruplets.

Demographic experts advised that the country should slow down the speed of falling birthrates through childcare incentives and low-cost housing offers.

“If policies and systems decelerate the rapid decline of Korea's birthrates, those measures could prevent some of the socioeconomic costs of the demographic crisis,” said Lee Chul-hee, an economics professor at Seoul National University. “Those measures have merit [in our society] even when the macro trend cannot be reversed.”

Park Il-ha, the head of the Dongjak District Office, walks around the Dongjak Kids Cafe's Daebang Branch, which is located inside the Dongjak District Childcare Support Center in Dongjak District, southern Seoul, in July 2023. [YONHAP]

On the other hand, other experts are calling for better infrastructure.

They believe the country should first foster a parent-and-children-friendly environment to make such policies work in the long term. This is because newlyweds and young Koreans decide to get married or have a child after meticulously calculating the costs and benefits, considering factors like job opportunities, education and parenting environment.

“Policies that put external factors — work opportunities and living and educational environment — in the background are less effective,” said Jung Jae-hoon, a social welfare professor from the Seoul Women’s University.

“An effort to make an environment where people of all ages find it comfortable to settle and live should precede. Also, each region should reflect regional characteristics to boost fertility,” Jund added.

The Seoul Metropolitan Government has been discussing means to encourage inbound immigration. The city piloted a program to accommodate foreign domestic workers last year.

“To overcome the low fertility crisis in Korea, the country should hire and embrace a large number of foreign workers — at least quadrupled compared to the status quo,” said Gim Heon-soo, head of the Strategic Talents Research Institute.

“By providing permanent residency to highly skilled foreign workers, the country could bring professional personnel and host foreign technological investment,” Gim added.

BY SPECIAL REPORTING TEAM [lee.soojung1@joongang.co.kr]