In its latest attempt to boost falling fertility levels, South Korea has tripled its allowance for households with newborns by offering a monthly allowance of 1 million won ($740).
The country, which has the world’s lowest fertility rate, introduced the incentive in a budget proposal it unveiled last week. Under the proposal, Seoul will begin making monthly payments of 700,000 won ($511) next year and eventually raise it to the full amount in 2024. Families will be eligible to receive the payment for up to two years but will see the stipend halved after the child turns one.
Also Read: China Unveils New Incentives to Boost Falling Birth Rate
Locally referred to as “parent pay,” the largescale package was part of President Yoon Suk-yeol’s election campaign pledge to address the nation’s low birth rate, which the leader described as a national “calamity.”
It's even crazier when you just look at the population under 20. Compared to 1980, the number of kids in South Korea has already been divided by 2. When you look at the projections, they're going to get into Children of Men territory by the end of the century. pic.twitter.com/E48jx5oqG5
— Philippe Lemoine (@phl43) September 4, 2022
The development comes two weeks after the country broke its own record of the world’s lowest fertility, which has plummeted to 0.81 babies per woman. The figure is a further drop from 0.84 the previous year and marks a sixth consecutive year in which fertility levels have dropped. In fact, there was widespread alarm in the country in 2020, when it recorded more deaths than births for the first time in its history. According to the United Nations (UN), the country’s population of 51 million could fall by a staggering 53% by the end of this century in the absence of adequate fiscal measures to encourage births.
I'm old enough to remember when Korea encouraged couples to have only one child, frowning upon two. Now some people in the goverment may wish they had never done that. https://t.co/Ood3YIdtvc pic.twitter.com/pZy2VBNMow
— Sam Kim (@samkimasia) August 24, 2022
South Korean women recorded having an average of four children at the start of the 1970s. Experts attribute the drop in recent years majorly to career factors and economic strain, including from the COVID-19 pandemic as well as the hike in housing prices.
The government-run Statistics Korea reported that Korean women are also giving birth later in life. In 2021, the average age of women that gave birth was 33.4; 0.2 years older than in 2020.
South Korea, which already had the world's lowest fertility rate, hit a new record low of .75 this summer
— Elise Hu (@elisewho) August 30, 2022
Depopulation in action: Seoul's Dobong HS is shutting down by 2024 — the first high school in Seoul to close bc of lack of students
via @BluRoofPolitics
Against this backdrop, South Korea has become the world’s fastest ageing country. Demographic experts fear that the rapid decline will leave the country with an extremely small pool of working-age citizens, while its elderly population burgeons without proper healthcare and at-home support. As of November 2021, 16.8% of South Korean citizens were over 65 years old, while only 11.8% were aged 14 or under.
Also Read: Governments Are Using Feminism as a Pretext to Increase Fertility Rates. It Isn’t Working.
So far, the country has already been estimated to have spent hundreds of billions of dollars on trying to reverse the decline. However, the results have been vastly underwhelming, with only 260,600 babies born last year, which accounts for only a 0.5% population increase. It remains to be seen if the government’s latest tactic to combat the demographic challenge will result in significant change.
In comparison, the average fertility rate across the world’s most advanced economies is 1.6 children. To put this in perspective, countries need a minimum fertility rate of 2.1, which is considered the replacement rate, in order to maintain a stable population. Anything above this number is considered to be an indication of population growth.