South Korea has set a troubling record with the world’s lowest fertility rate, exacerbating concerns about its aging demographics and the resultant impact on healthcare, social welfare, and economic growth. According to data released by South Korea’s national statistics office, the number of expected babies per woman dropped to 0.72 in the past year, with the number of births decreasing by 7.7% to 230,000.

The aging population poses challenges for public pensions and healthcare, raising concerns about the increasing fiscal burden. The decline in the number of young people paying taxes coupled with rising demand for medical services and welfare creates a complex economic landscape.

President Yoon Suk Yeol’s attempts to address these demographic challenges have faced obstacles, particularly in increasing the number of medical students to counter the acute shortage of doctors. Thousands of trainee doctors have protested, highlighting issues with their working conditions and creating a standoff that jeopardizes lives ahead of parliamentary elections.

The low fertility rate not only strains the medical system but also threatens long-term economic prosperity by shrinking the workforce and slowing consumption. Bank of Korea Governor Rhee Chang-yong warns against Japan-style fiscal and monetary stimulus, emphasizing the need for effective measures to combat the challenges of an aging economy.

The decline in births also has implications for national security, with fewer South Korean soldiers contributing to concerns over provocations from North Korea. Tech University of Korea’s Shin emphasizes the importance of avoiding Japan’s focus on seniors, urging a balanced economic cycle that invests in the education of the next generation.

Factors contributing to South Korea’s low birth rate range from high housing costs and competitive education environments to increasing gender tensions. Marriages hit a new low in 2022, reflecting concerns about unfavorable consequences for couples taking time off work for childcare.

Addressing the declining population, the government has introduced measures such as tripling monthly allowances for parents and easing regulations on hiring foreign nannies. Seoul mayor Oh Se-hoon explores innovative solutions like city-sponsored matchmaking programs to promote marriages and boost birth rates.

Experts suggest potential strategies, including raising the retirement age, increasing automation at work, and opening doors to immigration. The challenges faced by South Korea echo a global trend of aging populations, raising questions about sustaining economic growth and transitioning industrial structures in the absence of a robust working population.

By Impact Lab