World’s Lowest Birthrate Sinks Further Despite Cash Payouts to Parents

livemint.com:

South Korea, home to the industrialized world’s lowest birthrate, is having even fewer babies. The country’s downward demographic spiral has come even after years of aggressive government subsidies, low-cost loans and cash payouts meant to entice young people to get married and start families. South Korean President Yoon Suk Yeol wants to pay households even more to have a child.

South Korea’s fertility rate—a snapshot of the average number of babies a woman would have over her lifetime—slumped to 0.78 last year, from 0.81 in 2021, according to new government data. And the slide has worsened in recent months, falling to 0.70 in the April-to-June quarter. Countries need fertility rates of around 2.1 to maintain the population, demographic experts say.

Hwang Miae, a 33-year-old office worker, took a full year of parental leave when her first child was born three years ago. The government subsidies covered the cost of diapers and baby formula. She had always thought she would have a second child, but the prospect of raising another child while both she and her husband work has made her reluctant.

“The government subsidies are helpful when you first have a baby, but thinking about education costs long term, I’m hesitant for now," Hwang said. Many advanced economies face a dwindling number of newborns, including the U.S. where the fertility rate is 1.66.

Having fewer young people poses a range of problems, such as shrinking labor forces and tax revenues. South Korea, which has mandatory military service for men, has been struggling to offset an ever smaller pool of enlistees. Among advanced economies, South Korea is proving to be an outlier.