Korea holds the record for the world’s lowest birth rate, dropping to 0.81 babies per woman in 2021, with the country reporting more deaths than births. With more than 40% of Korean households as single people, and women delaying marriage and pregnancy, the outlook for the population is grim.
In a budget proposal released in early September, the government plans to introduce a 700,000 won monthly allowance (US$521) in 2023, rising to 1 million won (US$740) in 2024. This is despite the nation implementing tighter fiscal policy to rein in pandemic era debt – highlighting the urgency and significance of the demographic challenges.
The reasons behind the drop in birth-rate are multifactorial. The World Economic Forum highlights that countries such as Korea and Japan, where traditional gender roles see women responsible for the majority of childcare and housework, are experiencing significantly lower fertility rates than countries with shared responsibilities. The cost of raising a child in South Korea is also a prohibitive factor, with societal expectations on an investment in expensive schooling and private tutoring. Layered on top is the rising cost of real estate and living, leading women and young couples to consider delaying or declining parenthood.
Outlook for Employers: An employee in South Korea is entitled to a minimum of 90 days maternity leave. For large companies, the employer covers 100% of the cost of the first 60 days, with a social security benefit covering the remaining 30 days. With an increased urgency on increasing the birthrate it will be interesting to observe whether additional pressure is placed on employers to fund longer parental leave provisions.