South Korea's Population Decline and Economic Fallout: Facing the Future

South Korea is facing an imminent demographic crisis driven by critically low birth rates, as highlighted in recent data from the Korean Peninsula Population Institute for the Future. This report delves into the projected decline in South Korea’s economically active population, dwindling birth rates, and the consequential economic impacts ().

Data indicates a staggering decline in South Korea’s economically active population, with projections suggesting a decrease of nearly 10 million by 2044. The age group of 15 to 64, vital for economic productivity, is anticipated to decrease from 36.57 million in 2023 to 27.17 million in 2044. Such a decline is expected to adversely affect consumption patterns, leading to market destabilization and exacerbating the burden of supporting the senior population.

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Implications for Education and Labor Force

The report also sheds light on the diminishing number of elementary school freshmen, which is poised to nearly halve from 430,000 in the previous year to 220,000 by 2033. This trend not only underscores challenges in maintaining an adequately skilled labor force but also raises concerns about future educational infrastructure and workforce development.

A key concern highlighted in the report is the significant disparity between births and deaths, resulting in a natural population decline. By 2060, deaths are projected to outnumber births by a substantial margin, leading to a decline of 590,000 in the total population. Consequently, South Korea’s population, estimated at 51.71 million in 2023, is forecasted to plummet to 39.69 million by 2065 ().

Root Cause: Low Birth Rates

The root cause of this demographic crisis lies in South Korea’s persistently low birth rates. The total fertility rate, a crucial metric indicating the average number of children per woman, hit a record low of 0.72 in 2023. This figure falls significantly below the replacement rate of 2.1 births per woman necessary to maintain a stable population without relying on immigration.

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Further exacerbating the situation is the alarming decline in monthly birth rates. February 2024 witnessed a historic low, with only 19,362 babies born, marking the lowest number for any February since data collection began in 1981. This downward trend underscores the urgency of addressing the underlying factors contributing to South Korea’s declining birth rates.

In conclusion, South Korea is confronting a profound demographic challenge characterized by plummeting birth rates and a shrinking economically active population. Urgent measures are needed to address this crisis, including comprehensive policies aimed at incentivizing childbirth, supporting working families, and fostering a conducive environment for raising children. Failure to act decisively risks significant economic ramifications, including weakened consumer demand, labor shortages, and prolonged economic stagnation.

Population Crisis: Childbirth Rate in South Korea Goes Down in 2022
Is total fertility rate declining in South Korea? Yes, S.Korea's childbirth rate falls again 2022.

References:

Infra-Annual Labor Statistics: Working-Age Population Total: From 15 to 64 Years for Korea - (https://fred.stlouisfed.org/series/LFWA64TTKRM647N)
South Korea’s Demographic Dividend - (https://www.prb.org/geographical-focus/south-korea/)

Source-Medindia