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Why Does South Korea Have the Lowest Fertility in the World?

Couples are foregoing having children due to high childcare and housing costs.

Key points

  • South Korea has the lowest fertility rate in the world.
  • The vast majority of young couples in South Korea end up having only one child because of high childcare costs.
  • Young couples also delay having children because of expensive housing.
  • To increase fertility rates, South Korean government should implement long-term plans to reduce childcare and housing costs.

On Tuesday, Statistics Korea issued a report stating that the total fertility rate of the country decreased to 0.81 in 2021.1 The fact that the total fertility rate in South Korea is below 1 suggests that most couples are choosing to have only one child and that a non-negligible share of young couples are foregoing parenthood altogether. South Korea’s total fertility rate is less than half the corresponding rate for the United States (1.64). The UN projects that if the low fertility rates persist, the South Korean population in 2100 would be less than a third the size it is today. The government has sought to increase fertility by implementing pronatalist policies, like giving cash gifts to new parents, but the country's fertility rate continues to slide each successive year.

Why is the fertility rate decreasing so dramatically in South Korea?

Research suggests that rising childcare costs may be at the heart of the fertility decline in South Korea. Confucian values view education as the primary vehicle to achieve high social status and economic prosperity.2 This view has resulted in an “education fever” in Korea.

Korean parents often believe that it is their duty as parents to provide the resources necessary for their children to perform well in school and to have an educational advantage over their peers. Therefore, parents often send their children to private education centers, where they get tutored in everything ranging from Korean, English, math, writing, arts, music, and even physical education. These private education centers are notoriously expensive, and sending one's children to these centers increases childrearing costs significantly. The high costs of raising children are prompting some parents to limit their childbearing to one child or forego having children altogether.

Another explanation for why fertility is so low in South Korea centers on high housing costs. South Korea has one of the priciest housing markets in the world, and like many other countries, has recently experienced a dramatic rise in home prices. Research has shown that women living in locales with expensive housing tend to have children at older ages than those who live in locales with more affordable housing. Expectant parents may delay having children when they experience housing affordability issues, as they will need to divert resources for childcare, medical care, and food.

 Photo by Jill Sauve on Unsplash
Source: Photo by Jill Sauve on Unsplash

The third reason centers on the economic uncertainty that young men and women in South Korea face. After the Asian financial crisis in 1997, South Korea witnessed a rise in contract, precarious, and nonstandard work. Young men are having greater difficulty transitioning into stable adult economic roles, increasing the number of delayed and even foregone marriages. Because fertility occurs mainly within the context of marriages in South Korea, declining marriage rates mean decreases in fertility. Even married couples may delay or forego having children if there is high economic uncertainty. The rise in precarious work may have injected economic uncertainty into the lives of young couples and depressed fertility.

Overall, the literature on fertility suggests that the declining economic prospects of young individuals, coupled with rising housing and childcare costs, have created the perfect storm for the unprecedented drop in fertility.

Rather than implementing short-term pro-natalist policies, like offering temporary cash incentives to new parents, the South Korean government should develop a long-term plan to develop an environment where parents can raise their children without having to worry about childrearing costs. They should invest in creating a network of high-quality child care centers that new parents can access at low cost. They should also endeavor to increase the country's supply of affordable housing. Such long-term investments may hold the key to increasing fertility rates and slowing down the aging of the population.

References

1. Original source in Korean: https://kostat.go.kr/portal/korea/kor_nw/1/1/index.board?bmode=read&bSe…

2. Seth, M. J. (2002). Education fever: Society, politics, and the pursuit of schooling in South Korea. University of Hawaii Press.

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