South Korea's low birthrate begins to cause economic concerns: economist

Economists have warned South Korea's aging population and low birthrate could create a demographic tipping point in the country as its population of almost 52 million fell for the first time on record this month.

Kim Gi-young and Choi Hana, a couple living in Seoul, planned to have children at first when they married. But soaring housing costs in the metropolis and the price of education in one of the world's most competitive societies brought on a rethink.

"It costs a lot of money. It would be okay for those who can afford to have children, but it is difficult to have children in a single income family," said Choi, a part-time office worker.

The couple are clearly not alone given the latest census figures that show the population fell for the first time this year, down by almost 21,000 people. According to statistics, South Korea's birthrate is now the lowest in the world at 0.84 percent, far below the standard of 2.1 percent to maintain a stable population.

"Usually when the economy is improving, the birthrate is declining, that's the usual phenomenon in the world. But the thing is that the decline rate is too fast and too sudden in Korea," said Bowon Kim, professor with the KAIST College of Business.

In addition to the lowest birthrate, South Korea has one of the world's most elderly populations.

"We have a falling birthrate and the entire population is becoming aging, so an aging population is becoming the majority. So young people must care about the older people in a very disproportionate way so I think it's going to be a huge burden on the Korean economy," said Kim.

The government is set to offer cash incentives for families to have more babies starting in 2022. However, many Korean women said it's not just about the high costs and pressure, but society still compels them to leave the workforce if they become pregnant.

"In this country if you have a child the woman must make an unconditional sacrifice. This is the reason people have to quit their job," said Choi.

Future labor shortages and a lack of taxes to pay for pensions are just some of the concerns. At a societal level it's a matter of questions still seeking answers beyond the obvious cultural change and a need for innovation.