Korea is facing major economic and social challenges as its birth rate plummets to the lowest in the world and pet strollers outsell baby prams.
A report from the OECD, released this week, said the country’s current fertility rate of 0.7 meant that for every 200 people in the current parent generation there would be only 70 children and 20 grandchildren.
Fertility rate refers to the average number of children born to each woman of child-bearing age.
Off the back of these numbers, the Korean population is expected to halve over the next six decades with the elderly (aged 65 or older) then accounting for around 58 percent of the total population.
“The population already began to decline in 2021, leading to the conversion of kindergartens into nursing homes and of wedding halls into funeral parlours,” the OECD said.
“The sales of pet strollers exceeded those of baby strollers on a leading e-commerce platform for the first time in 2023.”
The birth rate crisis is linked to the high career and financial cost for women to have children. The county has the widest gender pay gap in the OECD.
Koreans are also reluctant to have children outside of marriage and marriage rates are also in steep decline. From 1990 to 2022, the total marriage rate plummeted from 9.3 persons per 1000 marrying in any given year to 3.7.
The trends are forecast to have profound consequences for Korea’s finances, welfare and family dynamics.
“The fertility rate of 0.7 and its consequences are so extreme that it forces a fundamental re-think of how society allocates the responsibility to bear the cost of raising children,” the OECD report said.
“Due to Korea’s rapid development, it is only a few decades since children provided old-age security directly to their parents, often pooled in extended family structures.
“The benefit of having children and grandchildren to provide the goods and services parents need when they reach retirement is…shared across the entire parent generation.
“A couple raising two children will put in considerable investments, but this investment will on average need to secure the retirement of roughly six individuals from the parent generation.”
Over the past six decades the fertility rate in Korea has plummeted well below the population replacement rate of 2.1 and well below other low-birth countries such as Japan (1.2), Germany (1.6) and France (1.7).
Over the next 60 years, the old-age dependency ratio will surge from 28 percent (of the working age population) to 155 percent.
“Even if the fertility rate were to bounce back to 1.85, the dependency ratio would surge to 117 percent, still turning the country from one of the youngest to the oldest in the OECD,” the report said.
“Labour shortages will intensify as retirees make up an increasing share of the population, and the fiscal cost of health, long-term care and pensions is set to more than double to 17.4 percent of GDP by 2060.”
Last month Korea declared its population situation a national emergency and appointed a new ministry of population strategy to deal with the crisis.
The full report can be found on the OECD website.
