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Rejuvenating Korea: Policies for a Changing Society

image of Rejuvenating Korea: Policies for a Changing Society

Korean families are changing fast. While birth rates remain low, Koreans are marrying and starting a family later than ever before, if at all. Couple-with-children households, the dominant household type in Korea until recently, will soon make up fewer than one quarter of all households. These changes will have a profound effect on Korea’s future. Among other things, the Korean labour force is set to decline by about 2.5 million workers by 2040, with potential major implications for economic performance and the sustainability of public finances. Since the early 2000s, public policy has changed to help parents reconcile work and family commitments: Korea has developed a comprehensive formal day-care and kindergarten system with enrolment rates that are now on par with the Nordic countries. Korea also has one year of paid parental leave for both parents, but only about 25% of mothers and 5% of fathers use it, as workplace cultures are often not conducive to parents, especially fathers, taking leave. Cultural change will take time, but this review suggests there also is a need for additional labour market, education and social policy reform to help Koreans achieve both work and family aspirations, and contribute to the rejuvenation of Korean society.

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Falling birth rates, key factors and pathways to overcome barriers to parenthood

This chapter describes the dynamics that led Korea to a fertility rate of 0.98 children per woman in 2018, which is the lowest among OECD countries. The strong segmentation of the labour market, changing attitudes towards marriage and children, and insufficient support to secure the transition to adulthood are key factors explaining the persistence of low fertility in Korea. Job insecurity, the cost of housing and education also limit fertility. To reverse the trend, Korea could consider: i) providing more support for young people to find affordable housing and enter the labour market; ii) increasing the rate of payment for parental leave and providing it with a “speed premium” as it exists in Sweden; iii) increasing flexibility in working hours (including more opportunities for part‑time work); and iv) investing more in the well-being of families.

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