Fertility rates are falling around the world, but Republic of Korea is the outlier, with a fertility rate of 0.72 in 2024. The International Monetary Fund, in its report on Korea’s economic situation (generally quite good), thought that Korea’s low fertility justified adding an “Annex” to its most recent report on Korea’s economy: “Addressing Korea’s Declining Labor Force” (IMF Country Report No. 25/41, Republic of Korea, 2024 Article IV Consultation, February 5, 2025).
This figure puts Korea’s fertility rate in perspective. You can see that the US fertility rate is a little above the average for the OECD countries (mostly the high-income countries of the world). Countries with low fertility rates include Spain, Italy, and Japan. But even among the nations with low fertility rates, Korea is a clear outlier.
As the report notes: “According to the UN’s population projection, Korea’s population is projected to decline by 17 million (equivalent to 33 percent of its current population) by 2070. The working-age population, which peaked in 2019, is projected to decline to 36.3 million (70.2 percent of total population) in 2024; 34 million (66.4 percent) in 2030; and 16 million (45.8 percent) in 2070. This decline is putting considerable strain on labor supply and hence potential growth of the Korean economy.”
Let me just empahasize that opening line again: with a fertility rate of .72, Korea’s population will fall by two-thirds in less than a half-century. Setting aside extreme conditions of war, disease, famine, and oppression, I do not know of any country which has gone through such an experience.
To see this another way, the top figure shows Korea’s population by age group in 2023. As you can see, the young age groups are quite small compared to the middle age groups. The bottom figure than projects out these trends to 2070. At that point, the middle age groups are small compared to the elderly. Also, if you look at the figure more closely, you will see that the horizontal axis in 2070 is different from the figure in 2023, so the decline in the size of the bars is even larger than it might at first appear.
Discussions of fertility can have a high emotional charge, because they sometimes can sound as if the policymaker (or the innocent writer) is telling people–and women in particular–how many children they “should” have. It’s a legitimate concern. But choices about children are heavily affected by other factors: cost of housing and schools, flexibility of workplace arrangements, availability of childare, structure of labor force, and more. In Korea, these other factors tend to lean against having children.
Consider some of these factors:
Housing costs. The IMF notes: “As of 2024Q1, it is estimated that median income families spend about 63 percent of household income for loan repayment of a median-priced home. The ratio is notably higher in the Seoul Metropolitan Area (151 percent), where the best jobs and education institutions are concentrated, and for larger living spaces needed to raise a child (153 percent for a property bigger than 135 square meters).” Payment of this size pretty much define “unaffordable.” (For those who don’t read metric, 135 square meter is about 1200 square feet; that is, a typical size for a two-bedroom apartment or condo.)
The centrality of private tutoring for children. Mothers in Korea are often expected to oversea a regime of private tutoring, which is seen as necessary to gain entry to prestigous univerisities. The IMF: “Korea’s high private tutoring participation rates largely reflect fierce competition to enter prestigious universities. … A significant portion of parent’s income is thus spent on private tutoring. In 2023, 78.5 percent of Korean primary and secondary school students took private tutoring (Ministry of Education, 2024). Monthly average expenditure for private tutoring per student relative to household disposable income has increased sharply since 2015, reaching … roughly 10 percent of average household disposable income in 2023. Empirical analysis suggests that prevalence of private tutoring is negatively associated with country-level total fertility rate …”
A dual-structure workforce. Korea’s labor market has what is called a “dual structure,” which means that one set of jobs are highly paid, highly demanding, seniority-based and often quite secure, while the remaining jobs are less well-paid, with limited promotion prospects, and often insecure. Thus, a mother in Korea will have a very hard time remaining on the highly-paid track–and in a dual-structure economy, once you are off the highly-paid track, it is very difficult to re-enter that track. Here’s a figure showing flexibility of working arrangements. The US ranks near the top; Korea is near the bottom.
This figure illustrates the dual labor-market in Korea by showing that temporary and self-employment in Korea are especially high in comparison to other countries.
Although the IMF report doesn’t mention this point, it also seems relevant to me that the tradition in Korea has been for a married couple to move in with the husband’s family, which has often meant that the wife end up doing household tasks with her mother-in-law. This pattern has become less common over time, but the possibility of such a living arrangement seems likely to discourage marriage and child-bearing for at least some women.
The IMF report goes into detail about how various policy steps could offset Korea’s low fertility rates, at least to some extent. I should also add that the dangers of extrapolation apply here with some force: If Korea’s population and workforce decline with the speed of these predictions, then in the next few decades housing should become substantially more affordable, admissions at major Korean universities will be less selective, firms will be under pressure to be more flexible in their workforce, and so on. As the US experienced after World War II, baby booms are possible, too. Decisions about how many children you “want to have” are not made in a vacuum.
