Low Birth Rates, an Aging Society, and Economic Stagnation

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Until the early 1960s, Korea had one of the world's highest population growth rates. At the time, the government strongly promoted birth control under the slogan, "Let's have just three children regardless of sex." Since then, it has maintained the birth control policy in line with the immediate economic growth policy, rather than a long-term population plan.

However, even without policy restrictions, fertility rates began to fall sharply. Fever for higher education has mass-produced college graduates, but there are only a limited number of high-income white-collar jobs preferred by university graduates available. With the growing gap between the desire to raise income levels and the dismal reality, the term "Sampo Generation” became popular, meaning to “give up” (po) “three” (sam) things: dating, marriage, and having children. The total fertility rate per woman has fallen to less than 1.25 in the 2000s.

The extension of human life was a symbol of development. Like other developed nations, Korea has also expanded its investment in improving medical technology, health insurance benefits, sanitation facilities, and nutritional status. As a result, the elderly population in Korea is rapidly increasing, and, with the declining fertility rate, the population structure is rapidly approaching an aged society. In 2000, Korea became a full-fledged aging society with 7.2% of its population over the age of 65. The number is expected to reach 14.3% in 2018 and 20.8% in 2026.

The population growth rate of Korea was 2.18% in the 1970s, which dropped sharply to 1% at the end of the 1980s. The government is concerned that if this trend continues, population growth will be -0.32% in 2040 and -0.97% in 2060. This is because low birthrate and aging eventually lead to the reduction of the economically active population, which gives rise to a vicious cycle of declining labor productivity, shrinking market, and low growth.

The Bank of Korea analyzed the cases of OECD members in a report on the causes and characteristics of aging. According to the report, the labor force participation rate of women was high in 32 member countries from 1992 to 2012, and countries with a smaller wage gap between men and women recorded higher birthrates. In addition to family welfare such as parenting allowance, public pensions also helped raise the fertility rate by securing income after retirement.

In conclusion, the problem can be solved only with the government’s aggressive action and the participation of the country’s citizens.

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