The Korean demographic cliff: a pressing danger

In a world where fertility rates are declining, Korea finds itself at the forefront of this unsettling trend. The phenomenon, initially observed in Europe in the 1980s, has been extending its reach to East Asia since the 2010s. Among East Asian nations — namely Korea, Japan, and China — Korea has the distinction of having the lowest fertility rate, reaching a startling 0.7 last year. This is even lower than China, which has enforced a strict one-child policy, and Japan, renowned for being the most aged society globally. Then, how, and why is this happening in Korea? Why is its demographic cliff a problem? Let’s take a further look.

To comprehend the gravity of the issue, it is essential to grasp the concept of fertility rate. Two primary statistical indices measure the number of births in a country: the crude birth rate, also known as the birth rate, and the total fertility rate. The crude birth rate is calculated by dividing the number of live births in a year by the midyear resident population. On the other hand, the total fertility rate, as defined by the Organization for Economic Cooperation and Development (OECD), refers to the total number of children that would be born to each woman, if she were to live to the end of her childbearing years and give birth to children in alignment with the prevailing age-specific fertility. Figures such as 0.8 or 1.2, which are oftentimes cited when highlighting the severity of the demographic crisis, typically refer to the total fertility rate.

In order to maintain a stable population, the birth rate should ideally be at least two children per woman. If Korea's birth rate continues to hover at 0.78, its population will diminish to two-fifths of its current size within three decades. More surprisingly, just within a century (or three generations), a group of 100 Koreans will shrink to six. The population composition will skew dramatically toward the elderly, with only 10 percent being children. The burden of supporting the elderly, who are projected to make up 60 percent of the population, will fall on the working population, who will only make up 30 percent of the entire population. This will lead the median age to rise to 59.

Still, some people think a demographic cliff is a value-neutral situation, a consequence of people exercising their free will. Others even contend that the decline in human population can have a positive impact on the environment. However, at least in the short term — within the next 50 years — a low birth rate presents a crisis to most nations. In modern nations, young people contribute to most of the workforce. The welfare system of a nation allows the elderly to receive pensions from the tax that the younger generations pay. If the birth rate remains at its current level, the tax income will dwindle, which will lead to the collapse of the welfare system. The problem increases in severity as considerable losses to the state treasury will ultimately bring about state bankruptcy in countries all over the world, even in the richest countries.

If a low birth rate is so detrimental to our society, what triggers it? A demographic cliff happens when people do not get married or when married couples choose to not have kids. In Korea, the overall birth rate has plummeted by 50 percent in the past five years. According to Statistics Korea, this nosedive is mirrored in the percentage of married couples as it also decreased by 50 percent, while the percentage of people having children has dropped by a mere five percent in the past 10 years. One-child families have only increased by five percent during the same period. Therefore, to figure out the causes of the demographic cliff, we should first focus on the reasons why people are not getting married, and then move on to why married couples are having fewer kids compared to the past, considering their contribution to the overall fertility rate.

To start with, youth unemployment and the exorbitant cost of housing make it increasingly difficult for young people to consider marriage. A 2022 research from Duo, the biggest matchmaking company in Korea, indicated that the average Korean pays approximately 287 million won ($215,000) to get married, with more than 80% accounting for housing. This is excessively high compared to the average income of Korean youth, which stands at 2.54 million won per month for those aged between 25 and 29 and 3.06 million won per month for those aged between 30 and 34 in 2022, according to Statistics Korea. Taking these figures into account, for a couple to accumulate 287 million won, each of them would have to work for at least seven years.

Difficulties in balancing work and family life can also impede many from choosing marriage — specifically for women. As explained by Professor Goldin of Harvard University, in pre-modern societies, women were simultaneously compelled to work and perform household chores. However, with modernization, women’s roles have shifted as they were labeled housewives. This new concept liberated women from double labor, rendering them only responsible for domestic chores. Unfortunately, the sexual division of labor deprived women of freedom of occupation, deriving other controversies. Nowadays, women are working again, but the social expectations for women to work still linger. The 2023 Nobel Economics Prize-winning book by Goldin emphasizes that this social atmosphere explains the gender wage gap, as it discourages women from participating in high-paying jobs, so-called “greedy jobs,” which demand more intense work. The tradeoff relationship between economic presence and housework poses a dilemma to women who want to continue their careers, inducing many to delay marriage.

In East Asian countries, such as Korea and Japan, the modern division of labor still exists as the labor force participation rate shows an average 25 percent difference between men and women aged 30 to 50. Moreover, in terms of the gender wage gap, women in these countries do not only elect to participate in low-paying jobs but are also structurally forced to do so. To be more specific, women are marginalized in the job market as corporate culture and employment practices prevent them from continuing to work. Since most companies in Korea and Japan do not provide paternity leave, women who experience marriage and delivery fall behind by roughly two years in terms of salary. As their salary lags behind due to maternity leave, women are suggested to retire and concentrate on handling household chores and raising children. In a study about career breaks of women by Oi and Matsuura, almost no women in East Asian countries can return to their original positions after career interruption. Instead, half of them remain at home for the rest of their life, while the other half, considering financial constraints, re-enter the workforce in less-paying jobs as temporary employees after several years of working as housewives. Difficulties in maintaining coexistence between work and family make marriage an unappealing choice for those who hope to maintain their career.

Furthermore, the incredibly competitive educational atmosphere and the resultant high child-rearing costs dissuade many from expanding their families. Korea is notorious for its competitive education system, and the youth suicide rate in Korea is the highest among OECD countries. This is why a good number of individuals express concerns about their children growing up in this stressful society, and decide not to have children so that misery would not repeat itself. Similarly, for parents who do choose to have children, surviving this competitive society has become one of the most important tasks. Therefore, parents often prioritize providing better quality education and opportunities for one child, rather than having more children.

So, how can this crisis be solved? Potential countermeasures are being explored. To begin with, countries can try to create new workplaces, fight youth unemployment, increase the influx of cheaper houses, and implement policies to change corporate culture. In particular, guaranteeing economic stability of individuals by providing a solid job with a decent employee welfare system can be a key. For instance, consider Lotte, where the fertility rate of employees is 2, approximately three times higher than Korea’s fertility rate. Lotte made parental leave mandatory for all its employees, regardless of their gender. This policy reduced the incentive for women to retire semi-permanently and become homemakers since every employee in the company shares the 2-year career disadvantage. As more female employees stably return to their previous positions after a career break, the opportunity cost of marriage and childbirth fairly decreases, leading to higher fertility rates.

Additionally, the implementation of new policies, such as immigration policies and life partnership acts, and revisions on existing laws including the Mother and Child Health Act can also serve as potential solutions. In Europe, despite having fertility rates not significantly different from that of Northeast Asia, the substantial influx of immigrants helps maintain a stable overall working population. Conversely, in Korea, the myth of homogeneity excludes other ethnic groups from being a part of the society. Furthermore, during the Joseon dynasty, couples were required to get married if they had children out of wedlock. As this traditional Confucian family norm still exerts its influence on Korean society, the average unmarried fertility rate for Korea is 2%, which is notably lower than the EU’s 41%. Acknowledging and recognizing diverse forms of family by establishing their legal presence and providing welfare support can be one way to raise the fertility rate, as it did in European countries.

Countries around the world are striving to increase their birth rates, and numerous countermeasures are being considered. Although there are still areas for agreements regarding the resolutions, it is time for us to find and implement them to this worldwide predicament. Despite the demographic cliff being a looming crisis, the effect of falling off the cliff is revealed only after decades. We should bear in mind that we are the ones who live in this country — who undergo the adverse effects of a dramatic decline in fertility rate. Our future lies in our hands. Before it gets out of control, we, the youth, should be on the alert and must collectively work toward a breakthrough.