Recently, South Korean President Yoon Suk-yeol declared a "National Population Emergency" as the country grapples with its low birth rate issue.
In response, the South Korean government has introduced fifteen core policies covering extended leave, tax exemptions, housing guarantees, and childbirth support, aiming to increase the fertility rate to 1.0 by 2030.
Data indicates that South Korea's total fertility rate, the average number of children a woman will have in her lifetime, has been below 1 for six consecutive years. According to government statistics, the total fertility rate was only 0.72 last year.
As of 2021, South Korea is the only one among the 38 OECD member countries with a total fertility rate below 1.0.
This year, the total fertility rate in South Korea is expected to drop below 0.7, remaining the lowest globally.
Simultaneously, there has been a declining trend in the willingness of young people to marry.
In the first quarter of this year, only 54,000 couples tied the knot, which is just 70% of the figure from a decade ago and half of that from thirty years ago.
Core Policy Measures:
1. Special Marriage Tax Reduction System
To address these issues, the South Korean government has decided to introduce a "Special Marriage Tax Reduction System."
The Ministry of Strategy and Finance will specify the exact amount of reduction in the next month's tax revision bill, with a likely proposal to grant a 1 million KRW reduction to each newlywed couple.
Additionally, married couples will receive more tax exemptions based on the number of children they have: 250,000 KRW for one child, 300,000 KRW for two children, and 400,000 KRW for three children, each increased by 100,000 KRW from current standards.
A family with three children could receive a total annual tax reduction of 950,000 KRW.
2. Extension of Paid Parental Leave
The new government policy also focuses on extending paid parental leave and increasing compensation during leave periods.
Currently, workers with children under 8 years old or in the first two years of elementary school can take up to 1 year of paid parental leave per parent, split into a maximum of 3 periods.
The new policy will increase the number of leave periods to 4 and adjust the monthly compensation to 2.5 million KRW for the first 3 months, 2 million KRW for the fourth to sixth months, and 1.6 million KRW per month thereafter, totaling an increase of 5.1 million KRW in parental leave compensation compared to the past.
This system is scheduled to take effect from January next year.
3. Short-term Parental Leave for Both Parents
The government is also considering establishing annual two-week "short-term parental leave" and increasing the number of working days for male parental leave from the current 10 to 20.
The goal is to increase the utilization rate of male parental leave from the current 6.8% to 50% during the current government's term, fostering a social environment where both parents can balance work and childcare.
4. Housing Security Measures
Housing issues significantly influence marriage and childbirth decisions.
In the new policy, the government has decided to gradually expand the income criteria for applying for low-interest housing loans and rental housing loans from a combined annual income of 130 million KRW to 250 million KRW.
During the low-interest loan period, if additional children are born, the applicable preferential interest rate will increase from 0.2 percentage points to 0.4 percentage points.
In addition, families with children under 2 years old can obtain more priority for housing through the "Newborn Priority Supply" program, increasing the number of households from 70,000 to 120,000 annually and raising the overall housing subscription ratio from 20% to 35%.
5. Child Education Benefits
The Ministry of Education has announced several child education benefit policies, including increasing the monthly support amount for education and childcare expenses for children aged 5 and above from 350,000 KRW to 550,000 KRW.
Even if children attend private kindergartens, parents will not incur economic burdens.
The government plans to expand the scope of this policy to include children aged 3 to 4 during its term.
Additionally, the Ministry of Education plans to extend the operating hours of educational and childcare institutions from the current 5 hours per day to 12 hours, expected to be implemented as early as 2026.
6. Foreign Domestic Workers
To ensure necessary childcare manpower, the Ministry of Employment and Labor plans to introduce 1,200 foreign domestic workers in the first half of next year.
The Ministry of Justice and the Ministry of Employment and Labor will also consider allowing those holding study visas and spouses of foreign workers to work in the childcare field.
Through these policies, the South Korean government hopes to effectively address the issue of low birth rates and alleviate the economic and social pressures caused by population decline.
Whether these measures will successfully increase the fertility rate remains to be seen, but they at least demonstrate the determination and efforts of the South Korean government in addressing the population crisis.
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