Cash incentives fail to boost childbirth in South Korea

A family strolls through the Myeong-dong shopping district in central Seoul on Jan. 3. (Yonhap) via The Korea Herald

SEOUL — Having a baby is not even a question for Lim Ji-yeon, 34, as she and her husband made the decision that it was not for them years ago.

Both Lim and her husband thought having a child would be nice, but that was before they had to really consider the idea of becoming parents after getting married in 2018.

They quickly gave up on that dream, vowing to devote the remaining years of their lives solely to themselves.

“Why have a baby to voluntarily go through all the struggles? There’s not much merit in having and raising a child nowadays,” she said. “Ask everyone around my age whether he or she is excited about being a parent. I guarantee you that most of them will say no.”

Lim is one of many Koreans who are committed to a childfree life, which has led the country to report last year its “population death cross,” whereby the annual number of deaths surpassed the number of births for the first time.

According to government data, the number of registered residents in Korea reached 51.83 million people as of the end of last year, down 20,838 people, or 0.04 percent, from a year earlier.

In 2020, Korea registered a record low of 275,815 births, down more than 10 percent from 2019, but the country also recorded 307,764 deaths, up 3.1 percent from a year earlier.

The Ministry of Interior and Safety and experts say the trend is likely to continue for the time being, especially with the COVID-19 pandemic disrupting job and income security for young adults.

“The year 2020 is sending a message that we need an overarching change across the socioeconomic sphere due to the start of a population fall, the explosive increase of single- or double-member households and the lowest number of births,” said Seo Seung-woo, head of the ministry’s local administration bureau.

What the population death cross suggests for the future of Korea is quite catastrophic, experts say, as schools and hospitals will close, jobs will be lost and the burden of providing welfare to the elderly population will grow.

In response to the alarming situation, the government last month released its 4th Basic Plan for Low Fertility and Aging Society, laying out the country’s plans to pour 196 trillion won ($179 billion) to boost the fertility rate over the next five years to 2025.

Starting in 2022, the country will provide families 2 million won for each child born, and until the baby turns 1 year old, his or her family will receive an incentive of 300,000 won per month, which will be hiked to 500,000 won per month in 2025.

Couples will also be provided with 3 million won a month for their three-month parental leave.

But experts believe that creating a “habitable” environment for parents and babies should be prioritized over increasing and introducing new cash incentives.

“You can’t simply force people to have babies; that’s just not going to happen,” said Chung Ick-joong, a social welfare professor at Ewha Womans University.

“If the environment is right and when people feel they are protected and encouraged to have children, they will have babies even if they are told not to. Cash incentives alone can’t really make much progress in boosting child births.”

Cash-incentive policies have failed greatly over the years, he said, which should serve as a reason to rethink the whole approach in fertility rate and the number of births.

From 2016 to 2020, South Korea injected 150 trillion won into boosting the fertility rate, but as seen by the population death cross, no progress was made toward boosting the number of child births.

Chung said people tend to care more about whether they will be provided with time and resources without having to worry about long-term prospects of going on parental leave.

According to a 2019 survey from the Korea Institute for Health and Social Affairs of men and women aged 19 to 49, 37.4 percent of respondents cited economic instability as the biggest reason for not having a baby.

Some 25.3 percent cited child-rearing as a reason, followed by inadequate housing arrangements at 10.3 percent and lack of proper child care services at 8.3 percent.

For Kim Min-seok, a 37-year-old accountant based in Seoul, who got married in 2017, the problem was more with uncertainty of whether he would be able to provide a stable income for at least 20 years of parenting.

He doesn’t have a house under his name nor has any backup plans in terms of income, so having a baby has been the least of his problems. Kim said he would “maybe consider” having a child later if these problems are resolved.

“Luckily my job is safe and secure at the moment, but I don’t know if that will be the case later this year, especially with the COVID-19 pandemic, and you think I should be worried about having a baby?” he said.

“And by the time my kid, if I somehow had one right now, has to go to college, I may lose my job because of reaching retirement age. What am I supposed to do then?”

Kim added that cash incentives from the government were never discussed when he and his wife were discussing whether to have a baby, as they don’t provide much help when considering how much it would eventually cost to raise a child.

“The government is not going to buy me a house or anything, right? Then I don’t care about these incentives,” he said.

According to a 2012 report, it costs around 350 million won to give birth to, raise and provide for education up to college for a child. That cost would be higher over time with inflation and increases in consumer prices.

And for 29-year-old administrative worker Chang Ye-sun, the problem was more about whether companies would be accepting of her and her fiance going on leave to take care of their children and whether there would be ample care assistance resources for them as working parents.

“If I were to have a baby, I would be away from my job for around a full year to commit to parenting, and that’s a burden that my coworkers and higher-ups would not want in any case,” she said.

“And even if I come back, I would have forgotten a lot of stuff, and it would take time for me to readjust to my job. On top of that, I would still have to care for my children when they are going to school and such.”

Some experts say that the government should focus on providing benefits and incentives, not just in cash, to working parents and their employers to encourage people to give birth and raise children.

The focus should be set on the whole parenting process, not just giving birth, they say.

“Taking a career break is a serious problem for working parents, especially women, and there aren’t many policies in place to help that,” said Shin Kyung-ah, a sociology professor at Hallym University.

“Working parents in their 20s and 30s fear losing competitiveness at their jobs and losing promotions from caring for their children, and that’s why many of them ultimately decide not to have a child at all.”

Shin suggested that companies utilize work-at-home programs to provide better work-life balance for working parents and to create flexible working hour systems. At the same time, the government should prepare policies to support lost workforce during parental leave, she added.

“This COVID-19 pandemic actually is providing a chance for the country to take care of this problem by introducing remote work and flexible hours for employees,” Shin said.

“Starting with this change, Korea should gradually move toward changing the whole culture and attitude towards childbirth and parenting. We should not be fixated on the mere number of births.”