South Korean government is giving cash incentives to women to have babies as the country struggles to overcome its low birth rate, reports Yonhap
A woman, Kang Mi-ok, reportedly received 2 million won (US$1,700) from a rural county in central South Korea in August. The money was meant to promote the birth of a fourth baby.
She is set to receive another 8 million won in installments by 2020 from Cheongyang County, South Chungcheong Province, to help her raise the baby.
“It’s completely a bonanza,” Kang said as she was caring for four children with her husband at a cafe in Cheongyang, 160 kilometers south of Seoul. The young housewife said the financial incentives are a great help to her family in raising four children.
Kang’s case illustrates South Korea’s desperate efforts to raise its birthrate — one of the lowest in the world — at a time when many young people delay marriage as they cannot find decent jobs amid a prolonged economic slowdown. The unemployment rate for young people between 15 and 29 years of age reached 8.4 percent in December, much higher than the overall jobless rate of 3.2 percent, according to government data.
South Korea’s total fertility rate — the average number of children a woman bears in her lifetime — stood at 1.24 in 2015, much lower than the replacement level of 2.1 that would keep South Korea’s population of 51 million stable.
Earlier this week, acting President Hwang Kyo-ahn called on officials to address the issues that make people reluctant to get married and give birth, noting South Korea has failed to get out of the “quagmire of low birthrate” for more than 15 years. Ranking officials of central and provincial governments meet in Busan on Oct. 28, 2016, to discuss measures to boost the nation’s birthrate. (Yonhap file photo)
The low birthrate has prompted South Korea’s central and provincial governments to come up with financial incentives and other measures to try to encourage young people to have more babies.
Lee Suk-hwa, the head of Cheongyang County, said his county began last year to give 10 million won to parents who have a fourth baby as part of efforts to encourage more young people to have more babies in rural areas. He also said his county has set up a 20 billion won fund to offer scholarships for college students from Cheongyang.
“Our policy does have an effect, though it has no noticeable change in the short term,” Lee said, adding it could take about 30 years before the birth promotion policy could bring any meaningful demographic shift.
Kim Man-soo, mayor of Bucheon, a city near Seoul, said his city has revised an ordinance to offer, among other things, 10 million won to parents who have a fourth baby to boost the city’s birthrate — the lowest in Gyeonggi Province that surrounds Seoul. In the past, Bucheon only gave 500,000 won to parents who have a third baby.
The move represents an about face in South Korea’s policy towards population growth over the past half century.
South Korea adopted a birth control policy in the 1960s to stem rapid population growth at a time when the country was rebuilding its economy from the ashes of the 1950-53 Korean War. At that time, the government dispatched officials to every house in rural areas to teach them about family planning. It also provided vasectomy services to reserve forces free of charge to try to lower the rapid population growth.
More than 651,000 men received the surgical sterilization procedure from 1962 to 1983, according to government data.
Government slogans warned that people could “end up being beggars if they give birth to children” without family planning. The government encouraged people to have only one child with slogans such as “A second child is too much” and “A population explosion is scarier than a nuclear explosion.”
The aggressive birth control policy lowered the country’s total fertility rate to 2.06 in 1983 from 6.0 in 1960. It fell to a record low of 1.08 in 2005, a dramatic demographic transition that served as a wakeup call to South Korea over its population policy.
South Korea has since been struggling to reverse the demographic decline by offering a set of incentives to young people. Government slogans on childbirth have also undergone a sea change from dire warnings to hope. One of the slogans issued after 2005 reads “a baby is the joy of a family and hope for the future.”
The government spent more than 101.6 trillion won from 2006 to 2016 to encourage people to have more babies, though it was not enough to boost the low birthrate. The government said it has set aside more than 22.4 trillion won this year to help raise the country’s birthrate. “It’s fair to say financial incentives are part of South Korea’s efforts to raise the low birthrate,” said Kye Bong-oh, professor of sociology at Kookmin University and a member of the Population Association of Korea. (Yonhap)
Still, he said it remains to be seen how effective South Korea’s birth promotion policy will be.
Kang said she feels relieved that her county offers 10 million won in incentives to promote birth.
Kang’s view was echoed by Lee Su-min who is entitled to receive 47 million won from the southeastern county of Changnyeong and the central government over the next five years for her fourth baby.
“Financial incentives are of help to my family, as my husband is the sole breadwinner,” Lee said by phone from Changnyeong.
The southern South Korean island of Wando also offers 5 million won as a lump sum and another 15 million won in installments over three years for those who have a fifth baby. So far, there is only one recipient, but he declined to give an interview, citing privacy. Still, not all agree with the birth promotion policy.
A recent poll of 1,000 singles found that 22.5 percent of single women said they would not have any babies after marriage, according to the Seoul-based matchmaking company Duo. More than a quarter of those surveyed said the difficulty in striking a balance between work and family is the key reason behind the low birthrate.
The low birthrate has sounded alarm bells. Last year, the number of South Koreans over 65 came to more than 6.76 million, accounting for 13.2 percent of the country’s population, according to the statistics office. Nations become an “aged society” if people aged over 65 years make up 14 percent and more.
Statistics Korea said people aged over 65 could reach more than 12.9 million, or 24.5 percent of the population, by 2030.
Experts have expressed concerns that the aging population, coupled with a low birthrate, pose a serious threat to Asia’s fourth-largest economy, as it could lead to fewer working people and increased spending on health and welfare.
Fitch Ratings Inc. cited South Korea’s aging population as one of the risks facing South Korea, Bank of Korea Governor Lee Ju-yeol said in August after meeting with a delegation of the international credit rating agency.
Lee said the government should pursue an effective policy in a consistent manner to tackle the low birthrate, noting the aging population is an issue that is more difficult than growing household debt or a U.S. rate hike.
“Financial incentives, if expanded across the country, could help raise South Korea’s birthrate,” Kang said.