[Inside Chodong] South Korea's Population Crisis Raises Concerns Even Among Nobel Laureates

Even Sejong City, Once Leading in Fertility, Falls Below 1.0
Urgent Need for Drastic Measures to Lower Housing Costs
No Future for South Korea if Population Decline Continues

The total fertility rate by province recently announced by Statistics Korea (the average number of children a woman of childbearing age is expected to have during her reproductive years) is chilling. It may not be surprising that the world is concerned about South Korea’s fertility rate, with Claudia Goldin, the 2023 Nobel Laureate in Economics and professor of economics at Harvard University, accurately stating that "South Korea’s fertility rate is 0.86" (as of Q1 2022), but what stands out is the notably distinct region of Sejong City. As of the end of Q2 this year, Sejong City’s total fertility rate was 0.94. Of course, this was higher than the national average of 0.7 during the same period.

However, if we look only at Sejong City, the story changes. It dropped by 0.15 from 1.19 in the same period last year, entering the 0 range for the first time. Since recording 1.89 in 2015, Sejong City’s total fertility rate has been steadily declining, but it had maintained a rate above 1 until Q1 this year (1.19). There are no signs of a rebound. In July, the number of births in Sejong City was 228, 13 fewer than in July last year. What has happened in Sejong City, once called the last bastion of ultra-low fertility in South Korea?

The cause is clear. Even Sejong City’s public officials are avoiding marriage and childbirth. For Sejong City public officials, who have stable jobs, the costs associated with marriage and childbirth are still considered burdensome. There is also a striking statistic. According to an analysis of household debt data collected by NICE through the Bank of Korea, as of the end of Q1 this year, Sejong City had the highest per capita debt. The average household debt per person in this region was 112 million KRW, even higher than Seoul’s 106 million KRW. Given that mortgage loans make up most household debt, it is ironic that Sejong City’s debt exceeds Seoul’s, where housing prices are higher. The Bank of Korea explains this as a kind of statistical illusion caused by the regional characteristic of many public officials and a sample group composed of a similar level of middle class. However, looking at it from another angle, it can be interpreted that the average middle-class household debt is in the 100 million KRW range, and this causes the middle class to feel burdened by marriage and childbirth as well.

Professor Goldin said that Japan is one of the countries with the best policies related to maternity leave and parental leave, but South Korea’s policies are not far behind. Results are also emerging. The proportion of men taking parental leave rose from 21.2% in 2019 to about 28.9% last year. Although it is still centered on large corporations, many companies are implementing systems such as telecommuting during childcare periods and automatic parental leave.

However, despite these measures, the problem is that the declining trend is steepening to the point where there are concerns about a demographic cliff. The government has poured more than 320 trillion KRW into low fertility countermeasures from 2006 to 2021 and introduced various policies, but given the current situation where even the middle class feels burdened by debt, it seems difficult to reverse the low fertility trend. After all, childcare is often called a "money-eating hippo." It is now time to consider drastic measures to reduce the biggest burden in marriage and childbirth: housing costs. It is fundamental to implement refined real estate policies to prevent housing prices from soaring. Expanding special public housing allocations for newborn families and increasing the supply of medium-sized rental housing that guarantees long-term residence for families with children are also options. It is necessary to minimize income restrictions on rental housing to create an environment where childbirth and childcare can be carried out stably over a long period. Although there may be criticism of populist policies given that national debt has exceeded 1,100 trillion KRW, what meaning would there be if the country disappears amid the demographic cliff? If the speed of the demographic cliff accelerates further, South Korea’s future will be bleak.

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