The Peninsula

From 'Six Children per Woman' to 0.7: How South Korea Confronts its 'Population Cliff' and Shrinking Labor Force

South Korea stands at a critical demographic juncture, facing a declining birthrate that has far-reaching implications for its economy and society. The increasingly severe demographic trends have pushed the government and society to consider which policy measures might offset the social and economic consequences of demographic decline.

Fertility quickly declined from an average of six children per woman in the 1960s to a mere 0.7 children in Q2 2023—the lowest in the world. This figure falls well below what demographers call the population replacement rate: the birthrate at which a population exactly replaces itself from one generation to the next, typically set at around 2.1 children per woman. Indeed, in 2022 the country’s total population shrank for the second consecutive year—the first time since 1949 it had done so. Demographers predict that at this rate, the population will shrink an astoundingly low 38 million (down from the current 51.7 million) by 2070.

In a foreboding common phrase, Korea faces a “population cliff.”

One worrying consequence of the top-heavy population structure is the change in workforce. A shrinking working-age population can stifle economic growth, as a smaller labor force may not generate the same level of productivity and innovation needed to sustain South Korea’s economic dynamism. As Korean baby boomers age and birthrates shrink, the working-age population will fall from 72 percent in 2020 to 56 percent by 2040.

Younger cohorts will bear a more substantial burden of both child and elderly care. The burden of caring for an increasingly elderly population places additional strain on public resources, especially the healthcare and pension systems. As the population shrinks and cost of living continues to increase, the reduced demand for goods and services resulting from a smaller population of young consumers further compounds economic challenges. Industries reliant on domestic consumption may face headwinds, potentially impacting business growth and overall economic resilience.

South Korea’s demographic decline is not a result of a single factor but rather a complex interplay of various drivers. These include changing societal norms that have delayed marriage and childbirth, high living costs, especially in housing and education, and the demanding nature of modern careers that often leave little room for family life.

South Korea’s policy interventions to counteract the birthrate decline have included substantial childcare support and education subsidies, making it more feasible for families to provide quality early childhood education for their children. These investments have helped alleviate some financial burden on parents, encouraging them to have more children.

The government has also expanded parental leave policies, allowing working parents to balance their careers and family life more effectively. These policies aim to create a family-friendly work environment, reducing the pressure on parents—especially mothers—to choose between their jobs and family responsibilities. Notably, in 2021 South Korea implemented an unprecedented paternity leave policy, offering one of the longest paternity leave periods in the OECD. This forward-thinking approach challenges traditional gender roles and promotes a more equitable division of childcare responsibilities. However, only one in five Korean men eligible for the program take advantage of any paternity leave, much less the enviable eighteen-month period introduced by the Ministry of Employment and Labor.

However, deep challenges to implementing these policies persist. Many South Korean parents still face financial and logistical forces that preclude larger families. Societal pressure and long-held cultural norms that discourage larger families highlight the need for a broader cultural shift to support these policies fully.

To improve take-up, South Korea should deepen a two-pronged approach that links economic incentives with cultural change. As outlined above, the economic leg of this approach is relatively straightforward. But, when it comes to the politics of designing and implementing policies, things become a bit more complicated. Younger Koreans are engaging in fervent debates on gender roles both in the workplace and within the family.

Many young men in their twenties and thirties express openness to their partners pursuing careers, yet they remain concerned about the potential impact on the traditional male role as the primary breadwinner and head of the household. On the other hand, young women harbor doubts about whether these policies can effectively dismantle the entrenched patriarchal structures that limit their freedom in both work and society. As a result, some women choose to opt out of heteronormative, male-led marriages and motherhood and instead pursue their personal and professional goals independently.

South Korea has also introduced a patchwork of immigration policies to serve as short and mid-term solutions. A comprehensive short-term guestworker program addresses labor gaps in industries such as manufacturing and agriculture. This program has undergone significant revisions to fill diverse roles, especially in small and medium-sized enterprises (SMEs) struggling to attract local workers for demanding jobs. Over the course of thirty years, migrant advocacy has bolstered legal institutions that protect the rights and welfare of guest workers. However, the program remains a stop-gap solution, as it excludes family reunification and settlement of low and unskilled foreigners.

Long-term immigration, particularly through marriage migrants, has also been embraced as a means to stimulate family growth. In this context, marriage migrants are understood as immigrants who move to Korea with the explicit purpose of marrying a Korean national. I have discussed the politics of multicultural family policies in-depth elsewhere, but here it’s worth noting that, similar to the difficult questions Korean society faces when addressing the contested gender dynamics emerging among younger Koreans, integrating children with an immigrant parent into mainstream Korean society necessitates significant educational, social, cultural, and legal changes.

South Korea’s journey to navigate the population cliff is a formidable task, but it is one that the nation, known for its resilience and adaptability, is well-equipped to undertake. By addressing the demographic issues head-on and fostering a social environment conducive to family growth and economic sustainability, South Korea can secure a bright and prosperous future for generations to come. Through comprehensive policy measures, South Korea can reshape the cultural ecosystem of its economic landscape, create a more equitable labor market, and ensure social safety nets for all its citizens.

Dr. Darcie Draudt-Véjares is a nonresident fellow at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from watchsmart’s photostream on flickr Creative Commons.