[Chong-Bum An’s Policy Diagnosis]We need new low fertility rate policy

[Financial News, November 23, 2023] Chong-Bum An (President of PERI)

[Chong-Bum An’s Policy Diagnosis] We Need New Fertility Rate Policy

At a time when our global standing as an economic and cultural powerhouse is at its highest point in history, there are two things that are unfortunately setting world records in a negative sense. We have the world’s lowest fertility rate and the world’s highest elderly poverty rate. In particular, the total fertility rate of 0.78 in 2022 bodes ill for our future. Add to that the fact that we are the only country in the world with a fertility rate below 1.3 for the past 20 years, and most industrialized countries have never fallen below 1.0, and it’s clear that declining birthrates are what everyone should be most afraid of right now.

The problem is that the measures we have taken to overcome this decline have not worked. The last five years have been the most serious. In the last five years since 2017, the fertility budget has increased by 2.14 times, from 24.115 trillion won to 51.7 trillion won, while the fertility rate has dropped sharply from 1.05 to 0.78.

Until now, birth control measures have been centered on childcare support. Political parties have competed to expand the targets and amounts of childcare support, and the childcare budget has become more than half of the fertility budget, excluding housing budget. Government departments also compete with each other to come up with birth control measures. In response to demands from the president and the National Assembly to come up with measures to address the declining birthrate, ministries rushed to expand existing measures or come up with new similar measures without evaluating their effectiveness.

Therefore, it is now necessary to create new birth control measures from scratch. Before creating measures, we must first thoroughly analyze the causes, and find the answer to why women are delaying marriage and giving birth. In 1993, the average age of first marriage for women was 25, and the average age of first birth was 26.2. In addition, the gap between first marriage and first childbirth has widened by about 1 to 1.5 years, suggesting that women are delaying marriage and delaying having their first child if at all possible.

It is also important to note that the rise in the age of first marriage and first birth has been accompanied by a rise in the female labor force participation rate. The labor force participation rate for women aged 30-34 is expected to rise from 66.2% in 2017 to 75.0% in 2022, an increase of 8.8 percentage points in just five years. In short, more young women are feeling the pressure of balancing work and family. This suggests that the proportion of care and work-family balance measures to encourage working mothers to give birth should be increased rather than childcare-oriented measures.

Changes in socio-cultural perceptions should also be analyzed. In addition to the main factors that discourage marriage, such as the high cost of raising children and education, unaffordable housing, and women’s fear of career interruption due to childbirth at work, it is important to consider the fact that there is a growing preference for independent single life.

The Presidential Committee on Aging Society and Population Policy plans to establish a Population Policy Evaluation Center next year to properly evaluate measures against the declining birthrate. Therefore, we can expect a scientific analysis of the causes of the declining birthrate, an evaluation of existing measures, and a preliminary evaluation of new measures. For scientific pre-evaluation, we now need to mobilize social experimental methods such as RCT (Randomized Controlled Test).

In an RCT, the target population of a policy program is divided into two groups, one that receives the program and the other that does not. Then, by observing the behavioral changes between the participants and non-participants following the implementation of the policy, it is possible to assess the effectiveness of the policy in advance.

RCTs are commonly used in the medical field to study the effectiveness of new drugs, and major developed countries have long used them to evaluate the effectiveness of social policy programs.

Therefore, we should actively utilize them for preliminary evaluation of fertility policies. Only then we will be able to make up for the mistakes that have been made in the past. Immigration policy, which is being considered as a birth control measure, also requires such scientific pre-evaluation.

November 23,2023

<Chong-Bum An, President of PERI>