[Myungho Lee's Future Preview] Urban Migration by Generation, Let's Create Cities for a Second Act in Life

Epidemics Are Unpredictable... Climate Change and Low Birthrate Can Be Prepared For
Population Changes Threaten National Extinction... Foreseen Economic Crisis Approaching
Specialized Cities by Generation Needed... Starting with Age-Friendly Healthy Cities

Predicting the future is difficult. This is because the events currently unfolding intertwine to produce unexpected outcomes. An uncertain future presents both crises and opportunities simultaneously. When it rains, umbrellas sell well; when it’s hot, fans sell well, causing the fortunes of umbrella and fan vendors to diverge. Therefore, we try to reduce risk by selling both umbrellas and fans together. Of course, this requires increased capital investment (purchase quantity, display space), and since we cannot sell both at once, the profit gained at a time decreases.

The COVID-19 crisis is a representative example. Traditional commerce suffered, but the online market flourished. Could this crisis have been predicted? Looking back at the SARS and MERS outbreaks, the likelihood of an epidemic increased, but the timing could not be predicted. Timing is crucial in forecasting. We cannot live always prepared for an epidemic to break out tomorrow. However, some events have predictable timing, such as global climate change and South Korea’s low birthrate and aging population. For these issues, we know what phenomena will occur when the predicted time arrives, but preparation is often neglected. Because these are not immediate problems and progress gradually, problem-solving is postponed.

What kind of crisis will the demographic changes of low birthrate and aging population that South Korea is experiencing bring? First, the crisis of national extinction. According to a recent report by the Board of Audit and Inspection, the population of 51 million in 2017 will decrease to 15 million in 100 years, by 2117. Among metropolitan cities and provinces with populations over one million, only Seoul and Gyeonggi will remain after 100 years. Most regions are expected to struggle to maintain normal urban functions.

The basis for this forecast is the low fertility rate. The total fertility rate of 0.98 in 2018 served as the basis. Three years later, it has dropped further to about 0.82. Population decline is expected to accelerate. Generally, the replacement fertility rate needed to maintain the current population size is 2.1. South Korea’s rate is less than half of that and is at the lowest level in history. Among OECD member countries, South Korea is the only country where the fertility rate has remained below 1.3 continuously. The fertility rate, which was 4.54 in the 1970s, dropped to the ultra-low fertility level of 1.3 in 2002, just 30 years later, and the downward trend has not stopped.

Population growth was an important factor in South Korea’s economic growth. The population of 25 million in the 1960s rapidly increased to 51 million in 2017 due to high fertility rates, doubling in size. The increase in young population and working-age population (15?64 years) naturally contributed to expanding the economy. However, the working-age population peaked at 37 million in 2018 and is now declining. In 2015, the working-age population ratio (73.2%) was the highest among OECD member countries. The total dependency ratio was 36.7 in 2017, the lowest among OECD countries. This was a strength of South Korea’s competitiveness. However, the trend is now reversing. Due to declining fertility and aging, the total dependency ratio?the number of dependents (youth and elderly) per 100 working-age people?is expected to rise from 36.7 in 2017 to over 70 by 2038. By 2056, it will exceed 100, meaning one worker will have to support more than one elderly person. A foreseeable economic crisis is approaching.

The causes of low birthrate include housing costs, child-rearing expenses, and education costs associated with marriage and child support, as well as concerns about the declining competitiveness (employment and promotion) of young people marrying later. Regional differences in fertility rates clearly illustrate this. As of 2018, the total fertility rate was 0.92 nationwide, but when divided by region, it was 1.01 in non-metropolitan areas, 0.85 in the metropolitan area, and 0.72 in Seoul within the metropolitan area. The metropolitan area, where jobs and young and economically active populations concentrate, shows a lower fertility rate. The more people flock to find jobs, the higher the competition. High competition delays marriage and childbirth. The higher the population density, the lower the fertility rate, and the concentration of population in the metropolitan area continues unabated.

If the crisis of low birthrate appears in the distant future, aging is a problem that is happening right now. The proportion of elderly people aged 65 and over was 15.7% in 2020 and continues to increase, entering a super-aged society at 20.3% in 2025. It will reach 40% by 2050. Aging is accompanied by increased dependency and medical costs. South Korea’s population boom began in the 1960s. Those born during the baby boom are now entering old age. Less than half of them belong to the relatively poor class and will live more than 20 years of life. As of 2017, South Korea’s elderly relative poverty rate was 44.0%, more than twice that of OECD countries.

The government has invested a budget of 190 trillion won over 15 years from 2006 to 2020 after establishing the Basic Plan for Low Birthrate Measures to resolve the low birthrate problem. However, as the fertility rate figures show, the policy has failed. Various methods were employed, from housing support for newlyweds to childcare subsidies, but the situation worsened. As seen in previous surveys, population concentration is the biggest cause of low birthrate.

A new approach is needed to resolve low birthrate, aging, and population concentration. I propose implementing population movement policies by generation and life cycle. Young and middle-aged generations who moved to the metropolitan area for university and jobs would move to regional healthy cities upon reaching retirement age. To disperse the youth population to local areas, much investment is needed in good childcare facilities, schools, and quality jobs, which mainly falls within the private sector. On the other hand, for elderly migration, good hospitals and lifelong learning institutions are sufficient.

Equipping cities with facilities needed by all generations from infants to the elderly is costly and inefficient. Creating cities specialized by generation reduces costs and strengthens urban competitiveness. Starting with elderly-friendly healthy cities that relieve the high density of the metropolitan area is possible. Cities with healthy leisure activities and jobs of 2?3 days a week, less than 4 hours a day, can be self-sufficient. The elderly generation born in the 1960s led the industrialization and democratization era. Now, a new challenge called the aging era lies ahead.

Myung-ho Lee, Vice President, Korea Futures Society

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