South Korea: Ageing Tiger

WEB EXCLUSIVES | January 12, 2010     

Even among the four Asian tigers, with their economic miracles during the past several decades that allowed them to almost join the ranks of the developed nations, South Korea is extraordinary. After all, Singapore and Hong Kong are small city-states, with the latter benefitting from its colonial status, while Taiwan has less than half of the population of South Korea. During its rapid economic growth, the nation has also had to face the economic, ideological and military consequences of the Korean War, which partitioned the Korean peninsula.

Now, however, South Korea (henceforth Korea) faces a challenge quite distinct from any other: the world’s most rapidly ageing population. The speed of population ageing in Korea is unprecedented in human history. From a population profile that resembled a pyramid (with many younger individuals and few older individuals) in 1990, the profile is now diamond-shaped (with a large middle-aged population). In another couple of decades, the country’s population will be an inverse pyramid: few young people and many older ones.

By 2050, the median age of the population of Korea is projected to be 57 years, making it the most elderly nation in the world. In contrast, at present, Japan has the oldest median age at 43 years, while Korea’s stands at 37years.

Population ageing is not unique to Korea. Many European nations, and Japan, have faced it. However, as Gro Harlem Brundtland, former Director-General of the World Health Organization, noted: “While the developed countries became rich before they became old, the developing countries will become old before they become rich.” That is the dilemma for Korea, and for other rapidly ageing nations such as China.

For Korea, things were never meant to turn out this way. Its government and people never aimed for the distinction of the world’s most rapidly ageing country. Indeed, Koreans were not supposed to stop have babies, especially since there was never a one-child policy as in China. Rather, as the economy grew and consumption increased over the past several decades, couples making their individual choices began to opt for fewer and fewer children. By the mid-1980s, the fertility rate (the average number of births per woman) dropped below the replacement rate of 2.1, and by the mid 1990s below 1.5. For nearly the past decade, it has not exceeded 1.3 giving Korea the distinction of having the lowest fertility of any country.

Only recently have Korean policymakers become concerned with fewer and fewer children born, and sought to take action. However, as in other countries, enticing citizens to have more babies is nearly impossible. The only countries that have accomplished this feat are those with extensive and generous welfare states, where the care (and cost) of children is shared between parents and the state, and where the employment prospects of women are not diminished by parenthood.

The opposite is the case in Korea, where the state has for too long relied on the family, including the extended family, to shoulder the cost of childrearing. Moreover, the intense ‘education fever’ in Korea means that parents invest their own resources in after-school tutoring and classes for children: Korea has the highest proportion of private educational expenditures of any OECD country, and spends little on public childcare.

Middle-class Korean women may consent to having one child, as this can be managed without interfering too much with their own careers. They refuse to have more children, certain in the knowledge that doing so will consign them to a permanent withdrawal from the paid labour force, as well as a lifetime of taking care of husband, children and ageing parents, and then grandchildren. Part-time work is nearly unknown in the formal labour market in Korea, and employers place a premium on hiring younger workers. As such, a woman who exits the labour market finds it impossible to return in any but the most menial capacity.

Some nations cope with declining fertility, and an ageing population, by encouraging immigration. Population aging in Canada and the US is gradual, in large part because of high rates in immigration. For Korea, this option is unavailable, as it is already one of the most densely populated nations on the globe. Instead, younger Koreans are decamping to pursue educational and employment opportunities in other nations, which only escalates the speed of population aging.

Korea is also constrained in supplying would-be parents with child-friendly neighbourhoods. Since the Korean War, it has held to a policy of ensuring that there is enough arable land for it to remain self-sufficient in rice. After all, it is still a nation technically at war with its northern counterpart, and whose population remembers the Japanese occupation during the first half of the 20th century. Consequently, in a country that is 70 percent mountains, the limited land allocated for housing requires that all but the very wealthiest live in apartments in high-rise towers. These, as the experience in Hong Kong and other dense urban areas demonstrates, are not conducive to raising large families.

The Korean government has made some strides in the past decade to encourage higher fertility, such as granting greater employment protection and equality for women, and introducing a nation-wide five-day work week. At the same time, it has – ironically – had to scale back its ambitious policies to provide older citizens with financial security.

In the 1980s, before the ageing crisis, the government instituted a generous public pension plan that would provide adequate income for the elderly. Spooked by the unexpectedly large number of elderly people that will soon arrive, the pension plan has been slashed twice, and further reductions are expected.

Thus, not only will there be more elderly than planned, but they will be poorer than intended. Ironically, as young couples contemplate the financial implications of having children, they must add the cost of supporting their own ageing parents.

Korea is being watched closely by its neighbours, especially China, and other economically emerging nations. How it copes with becoming the greyest of countries will provide a regional example to be followed or avoided. Crises always served as catalysts for development in modern Korean history, be these military, economic or otherwise. Rapid ageing – which is neither normal nor desirable – will once again test Korea.

biolineThomas R. Klassen is an associate professor in the Department of Political Science, and the School of Public Policy and Administration at York University (Toronto). He is co-editor of Retirement, work and pensions in ageing Korea.

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