[Insight & Opinion] The Low Birthrate Issue: Invisible Solutions

The low birthrate issue in our country is now easily felt in everyday life. It is no longer unusual to see elementary schools closing due to a lack of students. According to statistics, last year’s total fertility rate in Korea was 0.78, making it the only country among the Organization for Economic Cooperation and Development (OECD) nations with a birthrate below 1. The number of births in the second quarter of this year is expected to break another record low, and the fertility rate is projected to fall into the 0.6 range by the end of this year.

The government is rushing to put out the fire by rolling out various incentives to encourage childbirth. The budget for next year includes expansions of parental benefits and extensions of parental leave pay periods. Local governments are also implementing policies that provide around 300,000 won per month in childcare costs when grandparents take care of their grandchildren. A common problem with government policies is that the groups responding to these policies can be biased. Childbirth promotion policies are no exception. Temporary policies that pour out without sufficiently improving the social infrastructure affecting marriage and childbirth?such as housing, education, youth employment, and post-retirement life security?are more likely to have their effects limited to the birthrate of low-income groups rather than raising the birthrate of the middle class, which is the backbone of the national economy. In a structure where wealth is inherited across generations and intergenerational transmission is particularly strong among the poor, the asymmetry in birthrates can accelerate the entrenchment of economic inequality.

Where does the problem with the middle class’s birthrate arise? There are various reasons, but the issue of women’s career discontinuity seems to be a major factor. According to the Ministry of Gender Equality and Family, a 2022 survey on women’s career discontinuity found that 4 out of 10 women experienced career breaks due to reasons such as marriage, pregnancy and childbirth, and parental leave. This corresponds to 42.5%, a 7.5 percentage point increase from the 35% recorded in 2019. A particularly notable problem is that married women with children experience career discontinuity more than women without children. Career breaks are problematic not only because of the interruption period itself but also because they affect future job stability and wages. In fact, statistics show that the proportion of regular employees before career breaks was 88.2%, but it drops significantly to 51.5% afterward.

Ultimately, the solution lies in improving corporate culture to prioritize career retention and work-life balance. If companies do not voluntarily change, appropriate government incentives and penalties are also necessary. According to Statistics Korea, the male parental leave rate in Korea was 4.1% in 2021, which is far below the female rate of 65.2%. Although some argue this is a statistical error, it is undeniable that both companies and the government should encourage male parental leave. In Japan, for example, the Ministry of Health, Labour and Welfare reported a male parental leave rate of 17.1% last year, showing a steady increase over the past decade. The Japanese government’s target for 2025 is a remarkable 50%, which may seem unrealistic but is a commendable policy direction. In contrast, Korea urgently needs improvement measures. The government could consider incorporating related indices that help increase the birthrate?such as the proportion of female regular employees after career breaks and male parental leave usage rates?into ESG (Environmental, Social, and Governance) evaluations and reflect these in pension fund investments.

The steadily declining birthrate is a crisis among crises facing our country. There is no clear, drastic solution that can change this long-term trend. Relying solely on short-term government-led incentives will only hasten a pessimistic future. Now, raising awareness of the issue and encouraging community participation across all sectors of society, including businesses, is necessary.

Kim Gyu-il, Professor at Michigan State University

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