South Korea’s birth rate fell to the lowest in the world in 2020, then fell even further in 2021. But while the government keeps throwing money at the problem, its half measures have little hope of forestalling the coming demographic crisis.

Seoul Mayor Oh Se-hoon’s latest proposal to address chronic low fertility rates is representative of the government’s myopic approach to the issue: In a Facebook post on Sept. 27, the mayor said the country can alleviate the cost of raising children by hiring low-cost foreign nannies.

The government has put forward similar proposals for years. For example, a budget proposal released last month said the country will provide every household with a newborn child $486 (700,000 won) each month starting in 2023. The government will also pay $243 per month (350,000 won) to families with babies between one and two years old.

Yet despite such measures, South Korea’s birth rate has dropped six straight years to a low of just 0.81 expected births per woman in 2021, compared to 1.73 in the U.S. and 1.42 in Japan. If current trends continue, the U.N. estimates South Korea’s population of 51 million could halve by the end of the century.

Such a dramatic population decline could have disastrous consequences. It would mean there wouldn’t be enough people to sustain the economy, finance the government’s pension and health care programs, look after its aging population or conscript into the military.

To reverse this, South Korean policymakers will need to interrogate the underlying social problems driving this demographic crisis — including the extremely high cost of raising children and deep-seated gender inequality.

EXPENSIVE KIDS

Raising children in South Korea is expensive, and the government’s proposed subsidies are nowhere near enough to incentivize young South Koreans to have children. 

According to Jefferies Financial Group, a U.S. investment bank, South Korea is the most expensive country to raise a child anywhere in the world, reaching 7.79 times per-capita gross domestic product.

A significant portion of those costs results from South Koreans’ practice of sending children to privately run cram schools known as hagwon. The government’s attempts to regulate cram schools date to 1980, when the country’s last dictator Chun Doo-hwan banned private tutoring. 

But such efforts failed and the industry continues to thrive. 

The housing market is an even bigger factor: South Korea’s birth rate has been falling every month since late 2015, and those numbers roughly coincide with the emergence of the country’s real estate bubble. 

The lack of affordable housing has had a depressive effect on people’s desire to get married. And with strong cultural norms against extramarital childbirth, the decline in marriages has negatively impacted people’s desire to have children.

While many expect housing prices to fall, home ownership remains unattainable for many due to interest rate hikes that the Bank of Korea has implemented to rein in inflation.

The previous Moon administration lost support because of its inability to stabilize the housing market. However, the Yoon administration’s conservative governing philosophy that eschews economic regulation has left it unclear how it will deal with the real estate situation.

Former South Korea President Moon Jae-in at his inauguration ceremony on May 10, 2017 | Image: Republic of Korea via Flickr (CC BY-NC-SA 2.0)

GENDER INEQUALITY

As challenging as the economic obstacles may be, a far more enormous task is addressing the sexism that permeates South Korean society. Worst, it’s a problem many in the country refuse to acknowledge.

On the surface, South Korea appears to take gender equality seriously. In 2019, the U.N. Development Program ranked South Korea 10th out of 189 countries in gender equality. The index measures health, women’s rights and women’s labor participation, and South Korea appears relatively egalitarian in those terms.

However, indices that capture inequities in norms, rights, behaviors and relative achievement within the labor market and politics paint a different picture. According to the Global Gender Gap Report published in July, South Korea ranked 99th out of 146 countries in its gender gap rankings. 

The survey found that women’s labor participation rate in South Korea stood at 53.39%, good for 90th. The number of women in high-ranking managerial positions stood at 16.27%, or 125th. Meanwhile, women make up only 18.6% of National Assembly members and hold only 27% of ministerial posts.

Despite these poor rankings, then-presidential candidate Yoon Suk-yeol said in February that South Korea “no longer has any structural discrimination.”

A more disturbing indicator of South Korean misogyny is the recent rise in cases of sexual assault and femicide, which has too often resulted in overly lenient sentences for the men who murder and brutalize women. With the justice system often blind to the plight of women, many choose suicide. The rise of anti-feminist internet brigades has led to similarly tragic results.

As long as patriarchal practices and normalized misogyny in politics persist, the government’s offers of underpaid nannies and subsidies for early child rearing will fall on deaf ears. Raising the country’s birth rate requires improving not only economic conditions but also the socioeconomic environment. 

Unfortunately, the ROK government has not done enough to address gender inequality, and the current administration, which actually seeks to abolish the gender ministry, does not appear willing to change that.

SOUTH KOREAN CANARY

South Korea is not the only country dealing with declining birth rates or real estate bubbles, nor the only one where sexism exists. But the severity of the country’s demographic crisis has made it the proverbial canary in the coal mine.

The government may have to make politically unpopular decisions to deal with this staggering problem. 

For example, South Korea might have to take further steps to rein in and regulate the private cram school industry. It might have to take a page or two from Singapore’s government’s real estate policy to stabilize its own market. It might have to take on the difficult task of trying to shift attitudes toward women and overhauling the male-dominated justice system.

There are also less ambitious proposals that South Korea can consider. For example, increased emphasis on remote work and e-learning could depress housing prices by removing the need to live in a specific geographic location. 

In addition, labor shortages might compel more people to appreciate women’s contribution to the workforce, potentially improving female workers’ bargaining power.

Whether or not South Korea will successfully tackle its demographic challenges remains to be seen. But it’s abundantly clear that other nations should be paying attention. What happens in South Korea today could be their future.

Edited by Bryan Betts