{"id":2206557,"date":"2024-09-20T16:37:30","date_gmt":"2024-09-20T07:37:30","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206557"},"modified":"2024-09-23T20:02:18","modified_gmt":"2024-09-23T11:02:18","slug":"south-korea-boosts-housing-and-parental-leave-to-reverse-declining-birth-rate","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/09\/south-korea-boosts-housing-and-parental-leave-to-reverse-declining-birth-rate\/","title":{"rendered":"South Korea boosts housing and parental leave to reverse declining birth rate"},"content":{"rendered":"

South Korea proposed to reform the country\u2019s declining birth rate during a briefing with foreign correspondents, acknowledging both the scale of the demographic crisis and the challenges these reforms may face in reversing the trend.<\/span><\/p>\n

The announcement by Sung Tae-yoon, the presidential chief of staff for national policy, followed President Yoon Suk-yeol\u2019s introduction of the <\/span>\u201c4+1 reform\u201d agenda<\/span><\/a> on Aug. 29. This plan targets four primary sectors \u2014 pension, education, healthcare and labor \u2014 with an additional focus on birth rate, which Sung emphasized is influenced by various factors across these areas.<\/span><\/p>\n

South Korea\u2019s fertility rate has reached record lows, drawing global attention. In 2023, the total fertility rate fell to <\/span>0.72 children per woman<\/span><\/a>, down from 0.78 in 2022, making South Korea the only Organization for Economic Co-operation and Development (OECD) member state with a fertility rate below 1.0.<\/span><\/p>\n

Sung outlined the government\u2019s strategy, which centers on three main pillars: housing support, work-life balance and regional development to ease competition in the real estate market and education in the Seoul Metropolitan area.<\/span><\/p>\n

These efforts, comprising 151 specific initiatives, are designed to create an environment more conducive to raising families.<\/span><\/p>\n

\u201cWe are taking unprecedented steps to address what we consider a national emergency,\u201d Sung, a former professor and economist, stated, emphasizing the need to support not only traditional marriages but also other family structures to combat declining birth rates.<\/span><\/p>\n

The government\u2019s financial commitment to these reforms is reflected in its <\/span>2025 budget proposal<\/span><\/a>, which <\/span>allocates<\/span><\/a> about $14.8 billion (19.7 trillion won) for birth rate initiatives. This represents a 22% increase from the previous year, a significant rise despite the administration\u2019s general focus on fiscal restraint.<\/span><\/p>\n

While the Yoon administration’s approach is more comprehensive than previous efforts, Sung acknowledged the reform measure\u2019s effectiveness without addressing the deep-rooted cultural factors that have led to South Korea’s ultra-low birth rate.<\/span><\/p>\n

\"\"

South Korean President Yoon Suk-yeol visiting children and teachers at HD Hyundai’s daycare center in Seongnam, Gyeonggi Province,\u00a0 on the sidelines of a low birthrate committee meeting | Image: ROK Presidential Office, June 2024<\/p><\/div>\n

EXPANDING HOUSING SUPPORT<\/b><\/p>\n

A key aspect of the Yoon administration\u2019s strategy to increase birth rates is expanded housing support for young couples and families. The government\u2019s 2025 budget proposal allocates $11.1 billion (14.8 trillion won) for public housing. This is crucial as the high cost of homeownership has become a significant deterrent to marriage and childbirth in South Korea.<\/span><\/p>\n

One of the main policies is the expansion of a special loan program for newlyweds and young families. To be eligible for the loan program, a newlywed couple\u2019s annual income cannot exceed $98,000 (130 million won). If passed by the National Assembly, that cap will be raised to $188,000 (250 million won), enabling more middle-income households to qualify for support.<\/span><\/p>\n

Additionally, the government announced plans to provide more public rental housing units and pursue a new jeonse rental program. The latter will make 30,000 non-apartment units available at below-market rates to remedy urban housing shortages.\u00a0<\/span><\/p>\n

SOCIAL BARRIERS<\/b><\/p>\n

Despite these efforts, significant challenges remain. In desirable areas of Seoul, particularly those near reputable schools, the average apartment price <\/span>exceeds<\/span><\/a> $752,000 (1 billion won), making homeownership unattainable for many families, even with expanded loan limits.<\/span><\/p>\n

Moreover, the 49,000 public rental housing units to be supplied for newlyweds, according to the 2025 government budget proposal, may also fall short of demand in highly competitive urban markets.<\/span><\/p>\n

South Korea\u2019s housing initiatives still lag behind more aggressive policies implemented in countries like <\/span>Singapore<\/span><\/a> and<\/span><\/a> Hungary<\/span><\/a>, where <\/span>stronger<\/span><\/a> government intervention has seen more success in addressing housing costs as a barrier to family formation.<\/span><\/p>\n

But more importantly, the success of these policies will depend not only on their ability to lower financial hurdles but also on how they address the widespread perception that ties housing location and social status.<\/span><\/p>\n

For instance, part of the reason why families tend to prefer to live in certain districts over others is the presence of elite academic institutions. The type of education that people receive over their lifetimes impacts their employment prospects, which in turn impacts their income and marriage prospects.<\/span><\/p>\n

Sung acknowledged these issues in his address last Wednesday, pointing to \u201cnorms\u201d about social status as an additional pressure on the younger populations.<\/span><\/p>\n

\u201cWe think these factors are intricately linked to the country\u2019s low birth rate,\u201d he said. \u201cThrough controlling excessive competition, we hope that our policies will create a social atmosphere where people feel happy living together as a community while having children. That is why we are considering all these aspects simultaneously.\u201d<\/span><\/p>\n

\"\"

South Korean children at HD Hyundai’s daycare center in Seongnam, Gyeonggi Province | Image: ROK Presidential Office, June 2024<\/p><\/div>\n

FAMILY-FRIENDLY WORK ENVIRONMENT?<\/b><\/p>\n

The Yoon administration has allocated $3.3 billion (<\/span>4.4 trillion won<\/span><\/a>) in the 2025 budget to improve people\u2019s work-life balance, which Sung emphasized is crucial to encouraging people to raise families. However, he linked this issue to broader challenges in labor and work culture reform.<\/span><\/p>\n

To that end, Sung highlighted that the administration will increase parental leave benefits. The government has proposed raising the maximum monthly allowance for parental leave from $1,500 to $1,880 (2.5 million won). Additionally, it will extend paid aternity leave from 10 to 20 days.<\/span><\/p>\n

To further support this initiative, small and medium-sized businesses will receive additional government benefits from $600 to $900 (800,000 won to 1.2 million won) per temporary hire.\u00a0<\/span><\/p>\n

The administration has also stated it will provide a monthly stipend of $150 (200,000 won) to businesses to compensate workers who have to pick up the slack caused by employees taking parental leave.<\/span><\/p>\n

However, while these reforms mark progress, they still fall short compared to policies in other OECD countries.<\/span><\/p>\n

For instance, Sweden offers <\/span>480 days of paid parental leave<\/span><\/a>, which can be shared between parents until the child is 12 years old. Singapore recently allowed parents to take <\/span>ten additional weeks<\/span><\/a> for parental leave starting in 2026, bringing the total up to 210 days.<\/span><\/p>\n

Meanwhile, Germany <\/span>shifted<\/span><\/a> from direct financial support to broader childcare services and time-off policies, which helped <\/span>increase<\/span><\/a> the birth rate from 1.25 in 1995 up to 1.58 in 2021.<\/span><\/p>\n

In contrast, South Korea\u2019s proposal to extend paid paternity leave to 20 days, still lags far behind these international benchmarks. Meanwhile, the government still has not expanded maternity leave.<\/span><\/p>\n

The effectiveness of these policies will largely depend on their adoption in the workplace. Many employees, especially those in smaller companies or non-regular positions, face difficulties in taking parental leave due to workplace pressures.<\/span><\/p>\n

A recent <\/span>survey<\/span><\/a> by the labor ministry shows that taking parental leave often results in career and promotional setbacks even in larger companies.<\/span><\/p>\n

Sung acknowledged these challenges, stating, \u201cWe are focusing on creating a flexible and more elastic labor market that allows companies and workers to coexist while achieving work-family balance.\u201d He suggested that the private sector could explore \u201cdiverse\u201d work models, likely hinting at remote work systems.<\/span><\/p>\n

However, changing entrenched workplace norms remains a significant challenge. While President Yoon pledged earlier this year to increase male parental leave participation from 6.8% to 50%, this goal is unlikely to be met without stronger government mandates or substantial aid for employers, both of which are notably absent from the current reform plans.<\/span><\/p>\n

It remains to be seen whether South Korean society can overcome the deep-rooted cultural and economic barriers that have long deterred family formation. The coming years will determine whether this shift in priorities can meaningfully impact the nation\u2019s demographic trajectory or if more profound societal changes will ultimately be required.<\/span><\/p>\n

Edited by John Lee<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Culture & Society<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

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