South Korea’s major political parties have promised more public housing and easy credit in their plans announced ahead of the April 2024 elections in an effort to stem population decline. By 2025, South Korea is expected to become a “super-aging” society. Accordingly, the population is projected to decline from 51.6 million to 36.2 million in 2072. New commitments announced by the government aim to alleviate concerns about the economy and population.[i]
In 2024, a significant change is expected in South Korea’s fertility rate. The average number of children born to a woman is projected to fall to 0.68. This is alarming compared to the figures of 1.3 in Japan and 1.66 in the United States (US) in 2021. South Korean President Yoon Suk Yeol highlighted the People Power Party’s policies that support the pro-business agenda and also aim to make life easier for families. These policies focus on giving parents longer leave periods, expanding flexible working opportunities and offering tax breaks to employers.[ii]
Seoul’s concerns stem from the prospect of falling behind both industrially and militarily with an aging population. Indeed, the aging of a country’s population will lead to a significant change in its demographic and population structure. Moreover, this change carries potential risks for the country’s business world. The aging of the population also affects the decline in productivity and economic relations in foreign policy. This is because societies with older populations lose their innovative power. In such a situation, fewer people of working age participate in the economy. There is a contraction in the supply of skilled workers and a decline in the employment of in-demand roles. This has a negative impact on the international competitiveness of the country in question.
As the Democratic Party campaigned to maintain its majority, it promised more public housing for young families and low-interest loans for those with children that would be canceled along with tax-free child benefits. Newlyweds will also be given the option to buy rental housing at below-market rates if they have children.[iii]
In a society where competition starts in the pre-school years, housing and education costs have been cited as reasons why fewer young people are getting married each year and families are having fewer children in their old age. According to government data, in 2022, the proportion of couples married for five years or less without children hit a record high of 46.4 percent.[iv]
In this case, South Korea’s strategies to cope with population decline can be seen as a reflection of the measures taken to address the country’s demographic challenges. First, the focus of political parties on population policies is an indication of an effort to address the country’s future demographic challenges. This reflects the concern of “national extinction” due to the rapid aging of the population and low fertility rates.
In particular, the government’s proposed housing policies and economic incentives aim to contribute to population growth by supporting young families. However, for these policies to be successful, they may need to take a broader perspective. For example, factors such as economic hardship, career-oriented lifestyles and the cost of education can influence decisions to start a family and have children. Therefore, it will be important to pursue an integrated strategy, not only with housing and economic incentives, but also with education, labor and social policies.
It is also noteworthy that South Korea’s efforts to tackle this problem are based on international comparisons. For example, one could examine how Japan and the United States have addressed similar demographic challenges. These comparisons are important for developing effective policy recommendations and providing lessons learned for other countries facing similar challenges.
At the same time, the regional conjuncture for social policies is changing rapidly and becoming increasingly fragile. In this sense, the Asia-Pacific region is becoming increasingly militarized. North Korea’s nuclear tests have a significant impact on this situation. South Korea is one of the states that feels this threat most closely, both in terms of its geopolitical positioning and historical conflicts. Given all this, it can be concluded that Seoul needs to have a significant military power and security system. This cannot be achieved with a declining and aging society. In this context, considering both the security and military conjuncture of the Asia-Pacific region, South Korea has to deal with the demographic change. As a result, South Korea’s population policies can be considered as an important step against the country’s demographic challenges.
[i] “South Korean Parties Promise Homes, Loans in Steps to Boost Population”, Reuters, https://www.reuters.com/world/asia-pacific/south-korean-parties-promise-homes-loans-steps-boost-population-2024-01-18/, (Date of Access: 18.01.2024).
[ii] Ibid.
[iii] Ibid.
[iv] Ibid.
