Cash incentives prove ineffective at remedying real causes of low birth rate: long working hours, gender inequality

Posted on : 2024-02-29 17:09 KST Modified on : 2024-02-29 17:09 KST
Experts argue that without addressing more fundamental causes, like long working hours and gender inequality, Korea will continue to see fewer people deciding to start families
A single infant sits in an otherwise empty nursery in a South Korean hospital in this file photo. (Kim Myoung-jin/The Hankyoreh)
A single infant sits in an otherwise empty nursery in a South Korean hospital in this file photo. (Kim Myoung-jin/The Hankyoreh)

On Wednesday, Statistics Korea reported that South Korea’s total fertility rate last year had reached a new low of 0.72, which raises questions about whether the government is capable of devising effective measures for societal aging and tumbling birth rates.

Experts urge the Korean government to focus on Korea’s work hours, which are among the longest in the world, and on issues of gender discrimination in the family and at the workplace. Some raise concerns that the government and political establishment place too much emphasis on cash assistance.

It was in 2004 that the Korean government identified the low birth rate as a national challenge and began preparing large-scale programs to address that issue. After drafting its first basic plan for the low birth rate and societal aging in 2006, the government has updated the basic plan at five-year intervals. According to figures maintained by the Presidential Committee on Ageing Society and Population Policy, the government has spent 280 trillion won (US$210 billion) on programs aimed at addressing those issues between 2006 and 2021.

But Korea’s total fertility rate in 2004 was 1.16, or 60% higher than it is today, indicating that despite 20 years of efforts, the phenomenon of declining births is only worsening. That has convinced many that the social and economic conditions and attitudes that lead many Koreans to avoid or abandon marriage and childbirth largely remain in place.

In other words, the government has steadily worked to reduce the cost of having and raising children by expanding free daycare, introducing and expanding a child stipend, and (under current President Yoon Suk-yeol) paying parents a stipend as well. But the government hasn’t managed to reduce work hours or address gender discrimination enough to help people juggle work and family responsibilities.

“We need an approach that will guarantee the quality of life for people who choose marriage and childbirth. I think the government offering various perks for people who have children is no longer a valid approach,” said Kim Jin-seok, a professor of social welfare at Seoul Women’s University.

Numerous studies have shown that the birth rate is clearly correlated with work hours and gender equality levels.

For example, a report titled “Causes of Korea’s Low Birth Rate and Economic Impacts” that was published by the National Assembly Budget Office in 2018 found that the likelihood of a married woman getting pregnant within a year decreases by 0.3 percentage points for every extra hour worked per week. The same report found that working overtime reduces the likelihood of unmarried women getting married within a year by 3.7 percentage points.

According to a study titled “A Study on the Relationship between Fertility and Gender Equality According to Socioeconomic Development” that was published last month by the Korea Institute for Health and Social Affairs, an analysis of 146 cases around the world found that higher levels of gender equality are associated with a higher total fertility rate in late industrializing societies.

Given these research findings, it is troublesome that the Yoon administration hasn’t developed any programs to reduce work hours or improve gender equality. Instead, the government made an abortive bid to adopt a 69-hour workweek last year, which would have increased Koreans’ work hours, provoking a public outcry. Meanwhile, the Ministry of Gender Equality and Family, which is responsible for addressing gender equality, has its hands tied and is on track to be shuttered altogether.

As for the childbirth tax breaks that the Ministry of Economy and Finance is currently reviewing on orders from the president, even state-funded research institutions don’t think they would be efficacious.

“Since people in their 20s and 30s have lower income than other age cohorts, they’re likely to have a low tax burden or be totally exempt. I doubt it would be practical to use income tax breaks to tackle the low birth rate,” wrote Kwon Sung-joon, an associate research fellow at the Korea Institute of Public Finance, in a report published Tuesday.

By Choi Ha-yan, staff reporter; Ahn Tae-ho, staff reporter; Park Jong-o, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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