South Korea is known for many things, strong corporations, like Samsung, Hyundai, and LG Electronics. Tensions with its neighbor to the north, and more recently the K-pop wave spreading through international billboard charts. However, there is another distraction on the horizon, which is their declining fertility rates and aging population. As Rick Gladstone of the New York Times writes “the fertility rate has gradually fallen from 2.9 in 1979 to 0.9 in 2019. It’s fallen to 0.84 in 2020 and forecasters expect it will continue to decline.
A fertility rate of 2.1 is regarded by demographers as the threshold required to replenish a country’s population.”(Gladstone). This is a massive problem for the world’s 10th largest economy. While Korea may have a strong industrial capacity, it could be undermined by the burden of an ageing labour force, without the growth of younger generations to help satisfy the world’s demand for such a large export-driven economy. Gladstone illustrates this point here “For years, population experts have warned that demographic trends in South Korea, like those in Japan, show declining growth, a bad signal for replenishing the labor force”(Gladstone).
Much like Japan, this has been a persistent problem without an effective solution to date. Korea has one of the lowest fertility rates in the world at 0.84 in 2020. The Korean government is attempting to correct the trend covering pre-natal expenses and offering parental allowances for families with children under five, however, this isn’t having the desired impact, so there are other initiatives to encourage parents to leave work earlier and take paid parental leave to raise a family.
If these declining birth rates continue, South Korea’s standing as an economic superpower in Asia could be under threat.