South Korea splashes the cash in scramble to fix fertility crisis

Ilsan, South Korea – In their apartment on the outskirts of Seoul, Kwon Jang-ho and Cho Nam-hee recently sat down at the kitchen table to work out the monthly budget for their 17-month-old son, Ju-ha.

“Raising a baby in Korea can be affordable if you don’t buy unnecessary stuff and take advantage of government support,” Kwon, who works as an announcer for a local radio station, told Al Jazeera as he ran through the numbers.

“In our building, there’s even a local government-sponsored center where you can borrow things like toys or strollers for free,” adds Cho, who is on maternity leave and, like most South Korean women, doesn’t know her husband’s last name shares.

“Who doesn’t find it useful?” said Kwon. “It is good that the government is providing some support to families who already know they want children, but there are other factors to consider when it comes to tackling the problem of the low birth rate.”

With the world’s lowest birth rate, South Korea faces imminent demographic and economic disaster. In 2022, the average number of babies expected per South Korean woman fell to 0.78, down from the previous record low of 0.81 last year.

The replacement rate in developed countries – the number of births needed to keep the population stable – is typically about 2.1.

To reverse the trend, South Korea’s central and local governments are seeking to provide payments and other benefits to anyone who gives birth to a child.

South Korea, which has risen from poverty to developed country status in a generation’s time, is not known for strong social security – social spending is among the lowest in the OECD.

But even compared to European countries known for well-developed social security systems, many of which have introduced their own “baby bonuses” in response to low birth rates, South Korea’s schemes are generous and no strings attached.

Since 2022, mothers have received 2 million won ($1,510) cash payments at the birth of a child, more than in famously socialist France.

Families will receive 700,000 won ($528) in cash per month for babies up to the age of one and 350,000 won ($264) per month for babies under two years of age, with payments going up to 1 million won ($755) and 500,000 won ($377)), respectively, in 2024.

An additional 200,000 won ($151) per month will be provided for children up to primary school age, with additional payments for low-income households and single parents.

Other benefits include medical expenses for pregnant women, infertility treatments, babysitting services, and even dating costs.

In a district in Busan, South Korea’s second largest city, a separate bonus for giving birth three or more times was recently increased from 500,000 won ($377) to 10 million won ($7,552). And in the rural southwestern province of South Jeolla, monthly allowances of 600,000 won ($453) per child are provided for seven years – equivalent to 50.4 million won ($38,000).

But whether splashing the cash can in any way alleviate South Korea’s demographic woes is unclear.

Cho Joo-yeon, a 39-year-old Korean interpreter in Seoul who has been married for 10 years, said having children has never been an option for her and no government support would change her mind.

“Having a child would be a huge responsibility because the foundation would be how my parents raised me, which is a huge standard to live up to,” Cho told Al Jazeera. “I never wanted to get pregnant. I’m not going to sacrifice my career for a child.”

Cho’s husband Nam Hyun-woo is a creative director in the advertising industry and the couple cherish their time together despite a busy professional life.

“We like the financial free time we have, we don’t have to worry about sending kids to expensive schools or extra savings. We can splurge on ourselves and have that extra luxury,” Cho said.

For many South Koreans, choosing not to marry or have children is simply a matter of preference.

In a survey conducted last year by the Bureau for the Coordination of Government Policy, 36.7 percent of 19 to 34-year-olds indicated that they had no desire to have children.

In Seoul, which has the lowest birth rate of cities and counties in the country, six in 10 young adults responded similarly in a survey by the Seoul Foundation of Women & Family.

According to survey data from the Korean Association for Social Welfare Studies, only 4 percent of young South Korean women consider marriage and parenthood essential, while more than half consider neither important in their lives.

In 2022, there were just 192,000 marriages in South Korea, where out-of-wedlock births remain rare, a historic low.

Experts have often pointed to the need to address a complex web of issues that prevent families from having children, including a grueling work culture, skyrocketing housing and education costs, and gender inequality.

In a survey conducted earlier this year for the Joongang Ilbo newspaper, 27.4 percent of respondents said they believed the cost of childcare is the main reason for low birth rates. Other reasons cited included job insecurity, housing instability, and other economic factors.

Some controversial remedies put forward by politicians include exempting men with three or more children from compulsory military service and allowing foreign housekeepers to work for less than minimum wage to ease the burden of domestic ease work.

South Korean President Yoon Suk-yeol recently declared that spending 280 trillion won ($211 billion) on the problem over the past 16 years had been a failure and called for “bold and sure measures” to deal with the crisis. to take.

Yet the government has doubled the financial incentives.

Professor Song Da-yeong, professor of social security at Incheon National University, said cash allowances are not a long-term solution.

“Raising children is not a matter of providing financial support for the first two years of a child’s life,” Song told Al Jazeera. “It is not possible to provide high levels of parental benefits until a child reaches adulthood.”

Kwon Jang-ho and Cho Nam-hee, who live in Ilsan, about 25 km north of the South Korean capital, expect greater challenges when their son starts primary school.

“For people who live in big cities and have high ambitions, the competition to send our children to the best schools is increasing. You have no choice but to spend money on hagwons,” Cho said, referring to the after-school private academies where many parents enroll their children as young as five.

In 2022, spending by South Koreans on private education will reach a new record, with total annual spending of 26 trillion won ($19.6 billion) and nearly 80 percent of all students receiving some form of private education.

“There’s always that pressure to get ahead of everyone else,” Kwon said.

Song, the university professor, said the government should focus on creating an environment where parents can balance work and childcare, rather than just financial support.

South Korea has some of the longest working hours among developed countries and is ranked in the Economist’s annual glass ceiling index as the worst OECD country for women to pursue equal opportunity in the workplace.

“It should include policies such as using up all available parental leave, short-time work and flexible working arrangements,” Song said, emphasizing the need for an environment where women are not “kicked out of the labor market” after giving birth.

Although South Korea’s traditionally patriarchal attitude is gradually changing, women are often still expected – and in some cases feel obligated – to become full-time mothers after giving birth.

Cho Joo-yeon, the interpreter who intends to remain childless, believes social structure and perceptions must be transformed to address South Korea’s birth rate.

“It is not just one person, one government or one generation that needs to change; it could even be several,” she said.