Next 5 Years a Demographic Turning Point, Urgent Need for Education and Labor Reform

South Korea's total fertility rate recovered to the 0.8 range last year for the first time in four years. While the figure represents two consecutive years of rebound from the shocking 0.72 recorded in 2023 — a number that sparked fears of "national extinction" — the country remains the only Organisation for Economic Co-operation and Development (OECD) member with a sub-1.0 fertility rate.

Lee Chul-hee, a professor of economics at Seoul National University and one of Korea's leading demographic economists, told The Seoul Economic Daily on Wednesday, "It is doubtful whether the current rebound in the fertility rate will last another four to five years." He stressed, "We must view the decline in births not as the cause of the crisis but as a 'result,' and embark on institutional reforms to improve quality of life."

Calling the next five years "an important inflection point where demographic structural changes will begin in earnest," Lee advised, "Starting this year, we must launch population policies linked to structural reforms that make the education and labor markets more flexible" to resolve labor market mismatches compounded by the spread of artificial intelligence (AI).

Can the recent rebound in the fertility rate be seen as a meaningful trend reversal?

Marriages that had been postponed due to COVID-19 have increased since 2021, pushing up the fertility rate. Government policies likely had some effect as well. However, it is doubtful whether this rebound will continue four to five years from now. In the past, the fertility rate rebounded for several years as a reaction to the "birth cliff" of 2000–2003, but that did not last long. Even with the current uptick, the rate has not yet recovered to the 2021 level of 0.81. Without fundamental changes in labor market, education and housing conditions that discourage marriage and childbirth, there is a possibility that a pattern of modest rebounds followed by renewed declines will repeat.

What policies are needed to trigger a genuine trend reversal?

People who shift from not having children to deciding to have them are those on the so-called "borderline" — those who have some willingness to have children and whose circumstances are relatively supportive. Existing government policies have only reached the upper-middle class on that borderline. But to fundamentally raise the fertility rate, conditions must improve for those far from the borderline. Jobs must become more stable, the burden of education must be reduced and housing problems must be resolved. Even if not all problems can be solved immediately, there needs to be at least a vision that things can change in the future. There is much criticism of the government's real estate policies, but I believe that trying something is better than doing nothing — it can offer a glimmer of hope to homeless young people. The government also needs to build trust that it is making consistent efforts on education and employment issues.

Past low-fertility policies have repeatedly failed. How should the direction of population policy be set going forward?

Successive administrations viewed the decline in births as the cause of the demographic crisis and focused on increasing the number of newborns. As a result, they set numerical targets and reacted to every fluctuation, failing to maintain consistent policies. It is time to change the vision. The decline in births should be recognized not as the cause of the crisis but as a result — the product of problems society carries — and efforts should focus on easing the constraints that prevent childbirth. Only then can systematic and consistent policies be pursued. If we do not care about the environment in which children grow up and how happy they are, society will inevitably become one where having children is difficult. Institutions must be reformed in a direction that maintains and improves quality of life.