What is happening to South Korea's birth rate?

South Korea has seen its birth rate fall by another 8 per cent as the country has experienced a continuous fall in its birth rate over the last 60 years. In 1960 each woman in South Korea averaged around 6 children and now it is 0.72. For a country’s population to remain stable the birth rate needs to be 2.1. South Korea is not alone in Asia with Japan (1.34), Thailand (1.33) and Malaysia (1.82). If this trend continues South Korea’s population of 51 million will have halved to 25 million by the end of the century. 

Birth rates are falling across the developed world, bringing significant long-term challenges to governments. At a birth rate of 0.72 South Korea’s population will age incredibly fast with 50 percent of its population being over 65 in 50 year’s time. This is going to create a huge financial burden for those under 65 who are in work because so many older people are dependent on pensions, health services and social care.

A declining number of people of working age in South Korea has significant implications for the labour force and shortages of workers. This means the country’s potential output will grow more slowly or could even fall.

Why has South Korea’s birth rate fallen?

There are economic pressures on younger generations in the country such as high housing costs,  long working hours, and competitive job markets which make young South Koreans delay or stop having children. The growing number of women in the workplace in the country means some women are choosing a career over having children and whilst some men are prepared to take on the childcare role it is not a significant number. Some people also believe there is a shift in culture in the country away from the traditional family with children to a more individual lifestyle.

The government’s response

For nearly 20 years the South Korean government has tried to use financial incentives to encourage couples to have more children. $286bn has been spent on free childcare, subsidised housing, free hospital bills and IVF treatments for couples having children. However, the continued fall in the birth rate suggests the policy has not been successful.

South Korea’s falling birth rate has global implications. MDCs and eventually ELDCs may all face declining birth rates, leading to a decline in the world’s population. For many years economists have studied and discussed the problems of a rise in the world population now they might have to look at the challenges of a falling world population.

Some possible questions to discuss with a class

1. Research the trend in birth rates of 5 MDC and 5 ELDC countries. Is there a trend of falling birth rates in the countries you have chosen?

2. Why does a falling birth rate lead to an ageing population?

3. What are the economic consequences of an ageing population in South Korea?

4. How might a falling birth rate affect South Korea's potential output?

5. Discuss the possible positive consequences of a falling birth rate in South Korea.