'1.5 Million Won per Month' Halved in Japan... Raising Salaries Encourages Dads to Take Parental Leave

An analysis by the National Assembly Budget Office suggested that the cap on parental leave benefits should be raised to improve the issue of women bearing the full burden of childcare (childcare done alone without spousal help). Due to income concerns, men tend to avoid taking parental leave, but increasing the cap on parental leave benefits could raise the utilization rate of parental leave among men.

According to the "Analysis of Low Birthrate Policies and Fiscal Projects in Response to the Population Crisis" report released by the National Assembly Budget Office last year for settlement analysis purposes, the actual income replacement rate of parental leave benefits in South Korea is below 40%. Although the current regulation stipulates that 80% of the ordinary wage should be paid during the one-year parental leave period, the cap is limited to 1.5 million KRW (with a floor of 700,000 KRW). For example, a worker earning an average monthly wage of 3.88 million KRW last year would have an income replacement rate of only 38.6% based on the cap.

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South Korea’s parental leave benefits are lower compared to other advanced countries. In Japan, the ordinary wage replacement rate is 67%, but the cap is 3.17 million KRW. In Nordic countries, the income replacement rate is similar to ours at 78-100%, but the cap ranges from 5.85 million KRW to 7.74 million KRW.

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An official from the Budget Office explained, "The gender gap in parental leave usage is partly due to cultural factors that make it difficult for men to take parental leave at work. However, if someone has to take parental leave for child-rearing, it has been more advantageous for household income that the spouse with relatively lower income takes the leave."

Considering that men generally earn higher wages than women, women tend to take parental leave more often than men. According to a survey by the Korea Population, Health and Welfare Association, the main reason men avoid parental leave is income reduction (40.7%). The proportion of men among all parental leave takers remains at 24.1% (as of 2021). The low cap on parental leave benefits has significantly contributed to the reality of women bearing the full burden of childcare.

Men’s avoidance of parental leave not only concentrates childcare burdens on women but also leads to career interruptions. There is also concern about women avoiding employment due to the burden of parental leave. The childcare burden placed solely on women inevitably creates a structure that discourages childbirth.

For this reason, the ‘3+3 Parental Leave System’ implemented last year as a special measure shows that if the cap and other conditions change, men’s parental leave usage could increase. Under this system, if both parents take parental leave (simultaneously or sequentially) within 12 months of the child’s birth, the cap for the first three months is raised: 2 million KRW for the first month (100% of ordinary wage), 2.5 million KRW for the second month, and 3 million KRW for the third month. After the introduction of this improved income replacement system, the proportion of men taking parental leave increased by 30.5% compared to the previous year.

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The Budget Office proposed, "Due to the current 1.5 million KRW cap on parental leave benefits, workers (especially men who are the main earners) inevitably face economic difficulties when choosing parental leave. Considering this reality, it is necessary to gradually raise the cap on parental leave benefits to support and resolve the issue of main earners being reluctant to take parental leave."

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