South Korea: How has it managed to reverse depopulation?
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Hello and 안녕하십니까. Welcome to Business Daily from the BBC World Service. I'm David Kan, and today I want to take you to South Korea, where after nearly a decade of continuous fall, the birth rate has finally started to increase. An unexpected turnaround that's catching global attention. The

The number of births in South Korea has gone up slightly for the first time. South Korea's birth rate is up. South Korea has recorded the first increase in its fertility rate in a decade. For years, the country has grappled with declining birth rate, unprecedented anywhere in the world.

I don't feel obligated to leave my genetic trace in this world just because I need to or society expects me to. This led to an aging population and a shrinking workforce, with fewer working people to support the growing number of pensioners. There just won't be enough people working to support the country. The recent uptick in birth rate is being welcomed as a potential turning point in this demographic crisis. The low birth rate is an important factor.

The problem of low birth rate is an important national agenda, and the government and the private sector must work together to solve this. And some private companies have jumped in. In accordance with our encouragement policies, a childbirth incentive payment is being awarded. Today, we'll look at what's been offered to South Koreans to encourage them to have more children and find out whether it's actually working. That's all coming up on Business Daily. Business Daily.

This is Kobe Baby Fair, being held in Kintex Ilsan in Gyeonggi-do, about an hour drive from the South Korean capital Seoul. It's Thursday morning. Most people will be at work, but it's still very busy with hundreds of moms and dads pushing their baby buggies around over 400 different stalls, selling various childcare products from milk bottles to baby health insurance. This is the biggest baby fair in Korea, with over 45,000 people expected to attend over four days.

and it's one of several happening throughout the country. One stall owner I've spoken to here says he attends three or four of these fairs every week. So you'd think that South Korea has a booming baby products industry, but the reality is far from it. South Korea already had the world's lowest birth rate. It was already the country with the world's lowest birth rate. South Korea recorded the world's lowest ever fertility rate.

In 2023, South Korea recorded a fertility rate of 0.72, far below the replacement rate of 2.1. When discussing birth rate, you'll hear this number a lot, 2.1, meaning each woman having an average of 2.1 children in her lifetime. So 21 babies for every 10 women to keep the population stable. That's assuming there's no major war, disease or famine. Many high-income countries are not meeting this gold standard of birth rate.

with the EU at 1.38 and the US at 1.62 in 2023. But South Korea is in a league of its own. Its fertility rate first dropped lower than one child per woman in 2018. The latest figure showed a slight increase to 0.75 in 2024. That's 75 babies for every 100 women, still the lowest in the world. But what's wrong with the low birth rate?

This is Kang Ho Lee, professor at KAIST School of Future Strategy and former population and children policy director at Ministry of Health and Welfare of South Korea. The retirement age in South Korea is 60, and over the next 10 years, an average of 840,000 people are going to be retiring from their primary jobs each year.

Meanwhile, the number of those entering the age between 25 and 29, and these are the people considered to be the key new job seekers, is only going to be about 510,000 per year. So there's a deficit of 330,000 workers each year.

The phenomenon has already been going on for a few years and it's going to continue. There just won't be enough people working to support the country. Fewer people working means slower economic growth and reduced tax income for the government. That is reduced funds for health care, pensions and other public programs, things that the ever-increasing elderly retired populace often rely on.

South Korea has recently reached what is known as super age society, where 20% of the population are over 65. And for some, a drop in fertility rate is a more direct immediate concern.

Hyun Jong Lee is the CEO of TED, a baby bedding company, and the stall owner I spoke to here at the baby fair. The decline in customers is obvious to us. When I first began my business, there were over 400,000 babies born every year. That number is only around 200,000 now.

It seems like there are a lot of people here, but they're the same people who will be at different baby fairs. You see the same people at every fair. They're just browsing and taking pictures. Back in the day, it was like shooting fish in a barrel. We would make 30,000 to 40,000 US dollars of profit when we came to one of these fairs. But now it's nothing like that.

Many of us who were in the baby business transitioned into pet wear. They sell dog bags instead of baby bags and dog beds instead of baby beds. In fact, as fewer women are having children, there are now more than twice as many households with pets than those with children under the age of six.

So why are Koreans not starting families? My name is Miranda. I'm 34 years old. I live in Seoul. I don't feel obligated to leave my genetic trace in this world just because I need to or society expects me to. It's totally up to me and the person that I'm having a baby with. I don't think it's mandatory. How do you feel like Korea is as a woman? How friendly or how unfriendly do you think it is as a society to be a mother, to choose to have kids?

if you do. There are some people who think that it's an obligation as a woman to have a

children. But on the other hand, there are employers that think that women of a childbearing age could pose a risk as an employee because all the leaves, all the time-offs, and the level of work that they could potentially do and can't do kind of changes in comparison with the male employees. So once a woman goes out for a leave because of the childbirth, it's not really easy to come back. That's what's

stopping a lot of women to hesitate on having a child. It's mostly women who has to, you know, give up their careers for the most part. Of course, there are cases where women do not give up their careers after the childbirth. And, you know, there are a few cases, but most of the time, it's not easy for them to, you know, just go back to work. So...

Yeah, that's just a reality. What would change your perspective, do you think? First, I think the perception on the marriage and the childcare needs to be changed. Like the way we perceive these.

You know, out in the social media, like a lot of people have this, I would say a little bit twisted perceptions on what marriage is supposed to be like or what child care is supposed to be like. Fancy apartments, they are even categorizing themselves and leveling themselves and saying, oh, OK, you need to have at least this amount of income. You need to have at least this big of an apartment or housing to be able to have a child. You know, there are societal perceptions on those standards.

And it's getting higher and higher without reflecting the actual reality of people who are actually planning on having a child or living up to the societal standard on having a childbirth and having a family. Or being a good mother and a good wife.

Yeah, exactly. You know, if you want to have a child, at least you need to be able to support this and that, you know, they have all these. Can you describe to me what a good wife, good mother is for your generation? What's expected of a good mother? Good

good mother can provide for her child for all needs, like expensive strollers, you know, good formulas or being able to breastfeed if they choose to, you know, when the child grows up, you need to pay for the tuition fees, ultra, you know, send them to an English preschool, for example, which is very expensive here in Korea. Like those standards, like,

Miranda's views are widely shared among other South Koreans I heard from, both men and women.

I'm not particularly against having a child, but I don't have any plans. I don't want to have a baby anytime soon because I want to keep working. I want to save more money before I have a child. I want to save enough to be able to provide everything the child needs and wants. I don't think Korea has an environment good for raising children yet.

For example, when a child is sick, the nurseries can't take care of them, and the parents who are working can't just leave their work to take care of the sick child. There is no societal support for this, so it can't be helped that people have negative views on childbirth.

If I meet a really, really good person, then maybe. But why bother? I don't see the need. I have my desires in my job and my career, and I don't think I can do that and raise a child at the same time. I'm in my 40s and finally financially stable. If I have a child now, I will have to financially support it for years. Yes, my own child will be beautiful, but I don't have the confidence that I can raise it while sacrificing my life.

According to a survey last year by the Presidential Committee on Ageing Society and Population Policy, more than half of the people who responded said they were either undecided or had no plans for children. This is Business Daily from the BBC World Service.

Hi, I'm Lindsey Graham, host of Wondery's Business Movers. In our latest series, media mogul Ted Turner launches a 24-hour channel dedicated solely to breaking news. But CNN doesn't just shake up the television industry. It transforms journalism, politics, and culture in America forever. Listen to Business Movers, making the news on Amazon Music or wherever you get your podcasts.

I'm David Kan, and today we are looking at how South Korea's fertility rate dropped so low and the efforts the country has been putting in to encourage childbirth. Back in the 1950s, it was a very different picture here in South Korea. The average fertility rate exceeded six children per woman, but in just two generations, that has dramatically reduced. Here's Professor Lee again.

There are several reasons, but the first is that South Korea implemented a very strong birth suppression policy in the 1960s and 70s, with now famous slogans like, have two and raise them well.

It was around the 1980s that the fertility rate went below the replacement rate of 2.1 and it continued to drop rapidly. Despite this, the government continued the suppression policy until 1996 and didn't start encouraging childbirth until the 2000s.

Population policy should be developed with a long-term perspective and should have changed to fit the birth rate, but the government failed to do so. And meanwhile, the people's way of thinking has changed, especially that of women. Korea was a Confucian society where women were expected to be homemakers while men went out to work.

But as women started to go out into the workplace, partly as a result of the government policy to reduce birth, and as their social status elevated, they started to rethink the idea of childbirth and of motherhood.

And then there's the issue of the cost of living and not having a good work-life balance and how difficult it is to raise children while working. The South Korean government is keenly aware of the problem and has spent more than 200 billion U.S. dollars over the past 16 years trying to remedy it. Here's then-President Yoon Seok-yeol speaking on 2023.

We must now wage a national all-out effort to transform the bleak future into one full of hope. Today, I declare a national population emergency and will activate a nationwide comprehensive response system until the day we overcome the low birth rate issue.

Some of the initiatives from government to boost birth rate included offering cash incentives. Here's Professor Kang Ho Lee again. He worked closely with coming up with some of these incentives when he served as a population and children's policy director at Ministry of Health and Welfare. Korea's birth promotion policy is in no way behind other high-income countries. It's true that the policy hasn't been effective in reversing the trend of declining birth rates until now,

but I'd like to think it would have been worse without it. To give you a few examples, all children under the age of seven are given US$100 per month, and on top of that, parents are given US$12,000 in the first year and US$6,000 in the second year.

and financial support to pay for nursery in full. And there are housing supports for families with newborns too. And of course mothers are entitled to up to a year and a half while protecting a salary of up to $2,500 a month while on maternity leave.

And private companies are also trying to encourage Koreans to start families. Last year, a South Korean construction firm, Buyeong Group, declared that they would pay employees 100 million won, that's around 72,000 US dollars, each time they have a baby. The

This is what the CEO of the group, Joon Geun Lee, had to say at the first ceremony. As a Korean company, we want to be recognized as a firm that contributes to the population and cares about the future of the country. And it seems to have worked. According to Bu Young, its childbirth incentives have encouraged the staff to have more children, with 28 newborn babies within the company in 2024, five more than their average over the previous three years.

This proved to be a win for the company too. Buyoung says it's received five times more applications for jobs in 2024 than their previous rounds of hiring. And the CEO Jungeun is hopeful the trend will spread to the rest of the country. I believe other companies will follow suit and that it will help the national fertility rate and create a butterfly effect.

Buyong isn't the only private company trying to boost the birth rate. Conglomerates like Samsung, Hyundai and GS are also giving out cash to employees who have babies. But a couple of mothers I spoke to at the baby fair were still sceptical. It's only really the big corporations that give incentives or assistance for new mothers.

And even if they do, I don't think many women would use them, as they would be too concerned about being negatively judged for doing so. I feel like a lot of these policies are just bureaucracies, just to show off. The difficult part is making them a reality. Yes, they look good on paper, but I'm sceptical about it, and I wonder how many people can really take advantage of them.

Many of my friends had the first child but gave up on the second one because childcare was so hard. It's important for little care facilities but more importantly, there should be a change to allow parents to take care of the children themselves. Work-life balance needs to improve. I'm considering taking parent leave and if I do, it's unavoidable that I will be disadvantaged.

Despite the scepticism, the joint private and public efforts appear to be starting to work. The number of babies born in 2024 jumped by 3.6% to 238,300, according to Statistics Korea.

While the fertility rate remains to be the lowest in the world at 0.75, the first increase in that rate in nine years is being welcomed with cautious optimism by Professor Kang Ho Lee. People's perception of childbirth is changing and it's reflected in the statistics. When I had my two kids, my wife was also working full time.

At that time, the idea of me taking paternity leave was unimaginable. I couldn't even bring it up at work. But now the rate of fathers who are taking parental leave is increasing and punishments for companies that don't comply are getting stricter and the young workers are becoming more demanding of their rights. In 2008, 23.6% of people said they must marry. But in 2018, that figure was 11.8%. And then it went back up in 2022 to 15.3%.

This year, the birth rate and the marriage rate have increased, so there are signs of it improving. The government must use this opportunity to be more proactive and aggressive in the policies. Sounds optimistic. But with a fall in birth rate that lasted decades, South Korea is already seeing a decline in its working population. And that requires a different solution. Could immigration be the key? Find out in tomorrow's episode of Business Daily with me, David Kan.

If you want to get in touch with the program, our email address is businessdaily at bbc.co.uk. Thank you for listening.

Hi, I'm Lindsey Graham, host of Wondery's Business Movers. In our latest series, media mogul Ted Turner launches a 24-hour channel dedicated solely to breaking news. But CNN doesn't just shake up the television industry. It transforms journalism, politics, and culture in America forever. Listen to Business Movers, making the news on Amazon Music or wherever you get your podcasts.