Korea faces serious demographic challenges owing to its low birthrate and rapidly aging population.
This week, another set of data illustrating the gravity of the problems was released by the government: The number of elderly people that every 100 working-age people have to support has reached 18.12. This represents a threefold surge over the past 40 years.
This is because the growth in the number of people aged 65 or older is outpacing the growth in the number of economically active people ― those between the ages of 15 and 64.
What’s scary is that the government statistics office predicts that in 2060, there will be 20.77 million elderly people and a working population of 26.92 million. This means every 100 workers in the country will have to support 77.16 elderly people.
Korea’s notoriously low birthrate is primarily to blame for these dismal prospects. The most recent data regarding the number of babies born each year attests to the severity of the problem. The number stood at 435,300 last year, down 1,200, or 0.3 percent, from a year earlier.
The country’s total fertility rate, or the average number of babies a woman is expected to have during her lifetime, remains at 1.21, far below the 2.1 needed to prevent a drop in population.
A low birthrate results in weaker domestic demand, lower growth potential, a tighter job market and greater welfare outlays. It is quite natural that even outside economists ― including those from the International Monetary Fund ― are warning that demographic changes pose serious challenges for the Korean economy.
The government is right to say that the next five years are important for working out measures to prevent the aging of the population from becoming a national catastrophe. But what’s important is that policymakers look beyond direct measures for raising the birthrate ― like encouraging women to marry and have children, providing greater incentives for childbirth and child care support.
They also need to realize, for instance, that the heavy burden for providing private tutoring for their children is one of the factors forcing people to give up on or delay marriage and childbirth.