"Current low birth rate measures? "There is no long-term blueprint for the middle class."

■ Broadcast: YTN Radio FM 94.5 (09:00-10:00)
■ Host: Reporter Cho Tae-hyun
■ Air date: January 10, 2025 (Friday)
■ Talk: Lee Chul-hee, Professor of Economics at Seoul National University (Director of Population Cluster at the National Institute for Future Strategy)

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information.

◇Jo Tae-hyun: YTN Radio Live Economy Part 2 will continue. What I said earlier is that there is no hope for the low birth rate problem in Korea. In part 2, we will talk about what to do to create hope. In the second part, we will continue talking with Professor Lee Chul-hee of the Department of Economics at Seoul National University. It's something that some of us looked at briefly. It's the number of marriages that we've been looking at along with the factors that have recently increased the fertility rate. The number of marriages is on the rise. How do you see the background?

◆ Lee Cheol-hee: Yes, that's right. But it is necessary to consider whether the so-called marriage rate itself goes up. The number of marriages can be changed by several factors. One is that if the number of women in marriage retirement age increases, the number of marriages will increase even if other conditions are the same.

◇ Cho Tae-hyun: Since the parameters have increased,

◆Lee Chul-hee: The other thing is that if the number of unmarried people increases in that age group, the number of marriages increases again. Because only those who are not married can get married. But actually, if you look at it now, the population of women who are not married in their 30s continues to increase. Since there are many people who are married, the so-called marriage rate, or marriage rate, is a place where how many of the non-actor women get married, and it is a matter of whether it has increased. Another thing is, as I said earlier, the overall trend has not changed, but there may be cases where people who have not been married during the pandemic postpone their marriage for a while. If that happens, there is a possibility that the future rebound will disappear.

◇ Cho Tae-hyun: In the meantime, I thought that it was natural cause and effect that the fertility rate goes up only when people get married a lot, but recently, as the number of so-called Dink people increases, some say that this is not necessarily proportional. What do you think of this assessment that women's economic activity has slowed the rate of birth rate growth?

◆Lee Chul-hee: First of all, it has been clearly confirmed that the number of DINKs is increasing. So, especially around 2010, the proportion of women who were married but did not have children was only about 10%, but it rose to almost 23% by 2023. About a quarter of them are like that. So I think that some relationship between marriage and childbirth is being cut off. However, it seems to be a question that needs to be considered whether this is due to the increase in women's economic activity. My analysis of the report data shows that when the employment rate of women in a region increases, women in that region are less married. The ratio decreases after exile. However, the reason why married people in the region have fewer children is that such a phenomenon has not been revealed. That's why it's possible that the increase in employment of women was mainly attributed to the decrease in this marriage. I'd like to say that.

◇ Cho Tae-hyun: Then, what do you see as a way to increase the fertility rate regardless of the increase in women's economic activity?

◆Lee Chul-hee: Increasing women's economic activity does not necessarily mean that the fertility rate will fall. In the case of developed countries, there was a negative relationship between the employment rate and fertility rate of women before 90 years, but after 2000, it turned into a positive relationship. The reason is that there is a third factor that can positively affect both marriage and women's participation in economic activities. For example, policies that can further strengthen work-family balance, or policies that ease the so-called penalty for marriage and childbirth for the next woman, both have positive effects. Another example is that in the early and mid-20th century, there were many home appliances that could reduce housework for various women. The washing machine then the washing machine and vacuum cleaner baby food, so this affected the baby boom and at the same time, women's participation in economic activities increased. So if that change happens, which can have a positive effect on both of these things, I think there's a good chance that the employment rate of women will go up and the fertility rate will go up.

◇ Cho Tae-hyun: Okay. If so, I think what we need to discuss is the current population measures. I don't think this is why the political situation is going to proceed properly, but I will make a low birth rate, an aging society committee, and work hard. I think I did. What do you think the current government's demographic stance is?

◆Lee Chul-hee: Basically, I think the current government's population measures can now be summarized in two ways. Let's reduce the cost of giving birth and raising children. So it gives more incentive to those who are currently married and can have children. Secondly, I think we can summarize it with these two keywords, focusing on such policies that are considered highly efficient in this policy.

◇ Cho Tae-hyun: I don't feel much difference from the measures that happened in the past

◆Lee Chul-hee: Yes, there was no real difference from the past. When the fourth basic plan came out from the previous government, there was something different. So, there was a trend to improve the quality of life, and secondly, there was at least such a trend to strengthen gender equality, but in practice, it did not appear to be a specific policy, so I think there is no big difference in the policies that are actually felt from the past government or the current government.

◇ Cho Tae-hyun: Then, from what you have said, do you think the measures you have mentioned have been effective in reducing the population and resolving the low birth rate?

◆ Lee Cheol-hee: I think it worked a little bit. So I usually focused on three things. One is cash aid. The second was a policy to restrict parental leave for work-family balance, and the third was to improve the quality of childcare facilities, but when you look at the effects of each policy, you will find some effects. This isn't big. But why is that now? The reason why the fundamental effect has not been shown is that fewer people can be affected. In practice, a lot of people are in the blind spot of policy. First of all, people who are not married are in the blind spot of this policy. In the case of Korea, the reason why the birth rate is low is that married people sometimes give birth to fewer children, but there is also that because the proportion of married people is very low. So, 85% of women aged 25 to 39 were married more than 30 years ago, but now it's down to 45%. So, that is a big factor in the low birth rate, but there are not many policies that create conditions for unmarried young people to marry, so they are learned. And even for married people, the current policy is a policy to the extent that only the middle and upper classes can be affected. So, even if I don't have this policy, I'm not affected by the sub-income sector or the middle class because it's the kind of support that slightly pushes the backs of people who can afford to marry or have children. If you do actual research, you can find that these income support policies and the effects of these policies appear only slightly in the upper and middle classes. So for that reason, as I said before, the effect of pushing your back is not great because a lot of people are excluded, and the more fundamental thing is to lower the cost. But in Korea, the cost is influenced by a more fundamental problem in our society. Education costs go up Child support costs go up. That's because, as I said earlier, overall competition intensifies and inequality intensifies. However, even if you reduce the cost slightly, it is difficult to sufficiently solve the fundamental problem if you leave it. Therefore, I would like to point out that the fundamental structural problems of our society are difficult and time-consuming, but we need to improve them, but in that regard, even the blueprint has not yet been presented.

◇ Cho Tae-hyun: These are not measures that can solve fundamental structural problems, but only measures such as cash support came out, so even though the measures have been carried out so far, they haven't had much effect. Then from now on, I think that's the core of today's interview. If so, the focus should be on how to set the stance for population measures in the future, not on resolving low birth rates, but on policies to respond to population changes. There's a voice like this. How do you see it?

◆ Lee Cheol-hee: I think balance is necessary. So we need two balances. Some people say that even though they have a low birth rate policy, it is not very effective, so they should focus on accepting the low birth rate and responding to aging or population changes in the future. However, the future of such population change has not been decided at this time. Depending on how the number of births changes in the future, the size of the population aging or the impact of population change and the cost of solving it will vary. Therefore, it is not separate from alleviating the low birth rate and responding to population changes, but the two are intertwined. Therefore, the need for balance is that if you invest a lot of money in any policy, the so-called marginal effect, for example, the effect of investing an additional 1 million won, will gradually decrease. That's the case on both sides. That's why I think we need to balance the two properly so that we can reduce future costs and nevertheless prepare to respond to those difficulties and imbalances in the future. Second, I think a balance between long-term and short-term policies is essential. As you said earlier, critics of the government's policies are now saying, "What's the point of giving me some cash like that?" but I think that's also important. The reason is that now it's a policy that can be done the fastest and can be effective quickly. If we focus on mid- to long-term policies, young people will get older now. Therefore, it is difficult to do it as it is, and then we have to balance the mid- to long-term policies together, but the current policy is weak to look too far. But I want to say that we need to prepare for such efforts to look further and improve the future from now on, but I think that's not enough.

◇ Cho Tae-hyun: What kind of policy do you want young people to choose marriage as a priority? What kind of suggestions do you have that you want them to do this really quickly?

◆Lee Chul-hee: I can't hold anything up quickly. First, when it comes to housing support, the government's recent policy is aimed only at young people in the middle class. So, for example, I'm going to give you a loan to buy a house, which is to provide support to those who have stable jobs and are good to some extent, but there are quite a few young people who are out of it. That's why in the case of people who don't, I think we'll actually need that kind of policy to increase rental housing or increase rental housing in good areas. Second, all such youth employment and labor market policies are geared toward such a model of getting a full-time job as quickly as in the past, but I think that may not necessarily be the case in the future. It is necessary to implement such a policy to change jobs into a society where young people who work as non-regular workers can live well enough, plan their future, and marry and have children. I think it does not fit well with the reality of many young people to continue to insist on such a model by thinking only about the past and the past of the older generation.

◇ Cho Tae-hyun: Okay. In food, clothing, shelter, state, and employment policy, I think the role of policy and government will be very emphasized. On the contrary, if we tell you about the attitude policies that the labor market should have in an elderly society that is experiencing generational imbalances, there will be some private sectors. What measures do you think are necessary in this area?

◆ Lee Chul-hee: The private sector is also in an area that the private sector can do. It's very hard to force what can be done on behalf of the private government. But there are some aspects like that right now. There's something that the government can't do, but what the private sector can do is eventually improve the quality of jobs to expand their competitiveness, then strengthen work-family balance, then create old-age-friendly jobs, and so on. It helps individual companies secure competitiveness and secure good talent in the future. So I think it is necessary to focus first on that part where the interests of the company and then what can contribute to society are matched.

◇ Cho Tae-hyun: Okay. Now, there are concerns that Korea may almost disappear, so I think we should make a lot of efforts to prioritize certain policies that are always the most important in this low birth rate issue. So far, I have comprehensively diagnosed the low birth rate problem in Korea with Professor Lee Chul-hee of the Department of Economics at Seoul National University. Thank you for talking today.

◆Lee Chul-hee: Yes. Thank you.