System reforms needed to address low birthrate

Hong Sok-chul
The author is an economics professor of Seoul National University.

Last month, Statistics Korea estimated the fertility rate — the average number of children born to a woman over her lifetime — will drop to 0.68 this year and hit the bottom at 0.65 next year before reversing course from 2026. Population projections serve more as policy guidance than to offer an exact number.

We therefore should be concentrating on coming up with urgent measures against the dire demographic crisis from a low birthrate instead of panicking over the estimate. Based on the policy, the bottoming-out in birthrate can take place this year or come later than expected.

Some like to see the upside to depopulation, as 19th century British demographer Thomas Malthus argued for limits on reproduction as a low birthrate helps improve the quality of life thanks to the increased food supply. But there is no silver lining for Koreans from a dearth in births. If the fertility rate hovers at around 0.6 and 0.7, Korea’s population will be halved with the elderly share taking up 60 percent of the entire population by 2070. Koreans will be the world’s oldest — and the fastest shrinking — people.

Under such a demographic structure, the economy cannot generate any growth. The load on the working population to sustain the bigger majority elderly cannot be imagined. Widening borders for immigrants would be of little avail as few would willingly come to live in a country with no bright future. With scarcer talents and capabilities to innovate, the strategy to accommodate a smaller country through a technology revolution is only wishful thinking.

How has a country that used to be one of Asia’s four dragons ended up going down doom’s way? Overly-fast industrialization is the primary reason. South Korea, which was among the poorest after the 1950-53 Korean War, prioritized efficiency in order to survive. It achieved industrialization and joined the ranks of developed economies in an unprecedented pace. But the cost had been dear.

Family and community value was overlooked and sacrificed for growth and corporate interests. Korea is paying the overbearing price for competition in expensive private education, overconcentration in the capital region, gender conflict, climate crisis and deepening inequalities. The readings in youth happiness, suicide rates, social isolation and others indicating the quality of life hardly picture Korea as a rich developed society. The members of the society have come to shun marriage and child births due to the fixation of these multiple problems.

All countries achieving wealth through industrialization suffered side effects from competition intensity. But Western societies have persistently complemented social and economic systems so that competition does not impair family and community values. Without correcting the fallout from overcompetition, we cannot solve the ultralow fertility issue.

Despite the gravity of the problem, government attention and social change have been disappointing. A government budget to promote births has stayed stagnant since 2015. Spending to support families amounts to just 65 percent of the average spending of the governments of the Organization for Economic Cooperation and Development whose fertility rates are twice as high as Korea’s. We cannot expect any improvement in birthrate when government investment, corporate culture and social awareness do not come up to the average of advanced societies.

We need a radical paradigm shift with the same determination and drive behind the Miracle on the Han. Instead of vainly looking for a miracle cure for birthrate, the government must announce an across-the board reform scheme to revolutionize social and economy systems. Gender equality must be ensured to enable work-life balance and the gap between big and smaller companies needs to be narrowed.

The lifelong aftereffect of a university’s name — earned through expensive private education — must cease to exist. Housing for young people must be radically increased even if the country has to yield some of the greenbelt zone. Various family forms must be appreciated and the budget to support families should be doubled. It is important to demonstrate a strong determination through such radical measures at the expense of some competition.

We are at a crossroads of disappearing from the map or reinventing the country. The fertility rate is certainly projected to have sunken under 0.7 by the end of last year. Combat measures must be equally extreme against such a dire reality. Korea’s fight with the birthrate issue can provide the watershed for the country to reform social and economy systems to restore family and community values, balance growth across the nation and transform into a welfare state. The upcoming parliamentary elections must be a turning point toward that goal.

Translation by the Korea JoongAng Daily staff.