Government Accelerates Response to Low Birthrate and Aging Population... Discusses Raising Age Threshold for Senior Discounts to 65 (Comprehensive)

Government Announces Response Directions to Demographic Changes at 15th Emergency Economic Central Countermeasures Headquarters Meeting
Enhancements to Parental Leave System and Support for Youth and Foreign Employment
Some Criticize Lack of Concern Over Birth Rate and Effectiveness Issues

[Sejong=Asia Economy reporters Kim Hyunjung and Joo Sangdon] The government plans to increase the number of times parents can split their parental leave and provide incentives to companies that use the reduced working hours system during childcare to address low birth rates and aging population issues. Considering the extension of average life expectancy and improvement in health levels, discussions to raise the age standard of 65 for senior citizen benefits will be actively pursued. At the same time, alternatives will be prepared for changes in the employment market linked to demographic structure, such as discovering youth employment opportunities and employment of foreign international students in small and medium-sized enterprises (SMEs). However, some critics argue that there is insufficient consideration of the sharp decline in birth rates caused by structural social problems, and that the effectiveness of each measure is limited.

On the morning of the 27th, the government held the 15th Emergency Economic Central Countermeasures Headquarters meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Namki, where the cross-ministerial 2nd Population Policy Task Force (TF) announced the "Response Direction to Changes in Population Structure" containing these measures.

◆ Encouraging Parental Leave and Re-discussing Senior Citizen Benefit System Standards = As part of measures to address low birth rates, the government plans to expand the current one-time limit on splitting parental leave usage and allow parental leave during pregnancy. From next year, companies that use parental leave or the reduced working hours system during childcare will receive incentives in the form of initial support payments (100,000 KRW per month) for 1 to 3 times.

To encourage youth economic activity, from next year, job-seeking youth who have given up looking for work will be identified through community centers and local education offices and provided with employment services. Reflecting the recent trend of increasing elderly workers, employment indicators for the "65-69 age group" will be developed to understand the labor market participation of older adults and to prepare related policies. The Statistics Korea will start publishing employment rates for "ages 15-69" separately from the "ages 15-64" starting January next year. Foreign international students who graduated from science and engineering undergraduate programs will be allowed to work in domestic SMEs as qualified professionals (skilled workers), and the "dual citizenship system" will be expanded to compensate for population decline in the job market.

[Image source=Yonhap News]

Discussions will also begin on raising the age standard for the senior citizen benefit system, currently set at 65 years. Although detailed directions or standards have not been decided, public opinion reflecting the extension of average life expectancy and significant improvement in health levels calls for consideration of these factors. According to a 2017 survey, the most common age range that elderly people consider as the threshold for being elderly was 70-74 years (59.4%). The government plans to form a TF soon to gather opinions from various sectors.

◆ Full Effort to Address Aging Population... Criticism of Lack of Fundamental Measures = To improve the transportation system to be more elderly-friendly, the government will increase low-floor buses and boarding facilities and expand elderly protection zones around nursing homes and traditional markets. As part of fostering the elderly-friendly industry, a provisional Elderly-Friendly Promotion Committee will be formed by the second half of this year, along with a public-private consultative body. By next year, a system to collect behavioral information of the elderly will be established, and a roadmap for standardizing elderly-friendly products and services will be developed. Promising elderly-friendly industries will be discovered and fostered in medical care, caregiving and independence, housing, food, and leisure sectors.

Additionally, to help elderly people adapt to financial environments, the government will enact the "Elder Abuse Prevention Act," mandate age-specific impact analyses for new products, and strengthen penalties for incomplete sales targeting the elderly. To solve regional depopulation problems, the government plans to survey the status of vacant houses nationwide, devise management and utilization plans, and strengthen competitiveness in agriculture and fisheries using information and communication technology (ICT).

However, some critics point out that the government's focus is only on the "result" of population structure changes, namely aging, and lacks fundamental consideration of the "cause." While the government boasts that 87.1% of the 1st TF tasks have been completed and research has begun on extending employment, for the first time, a natural population decline has occurred for three consecutive quarters up to the second quarter of this year. The number of births has been decreasing for 55 consecutive months since December 2015, and the total fertility rate is at a record low of 0.84 since statistics began.

Regarding this, Professor Kim Sangbong of Hansung University’s Department of Economics said, "There should first be consideration of the earlier stages of the life cycle, such as why the birth rate is low, but it seems the government has only prepared measures based on the results." He pointed out, "Despite the increase in women's economic participation, the low birth rate is due to broader social structural problems such as difficulty finding employment, not attending good universities, and poverty." Lee Taeseok, head of the Public Economics Research Department at the Korea Development Institute (KDI), explained, "The key is to improve both the quantity and quality of the workforce, but short-term effectiveness is inevitably limited. The labor market conditions must change, but due to significant conflicts among stakeholders, this must be done gradually."

This content was produced with the assistance of AI translation services.