Microeconomic Analysis and Policy Direction on the Extremely Low Fertility in Korea

Korea’s extremely low fertility rate can be viewed as a result of aggregation of rational choices regarding fertility at the individual level. The economic motive for childbirth has largely declined due to the increase in childrearing costs and the weakening of private old-age support norms. The social motive for marriage and childbirth in accordance with the prevailing norms of society is also weakening along with the spread of non-marriage and non-childbirth due to changes in values. Instead, the natural motive for forming one’s own family through marriage and childbirth exists to a considerable extent in Korean young people, but it is not fully realized due to the high cost structure of childbirth and child rearing. Therefore, it is needed to focus on supporting the realization of natural motives for childbirth, and promote the formation of new families. In addition, since community-based bridging social capital shows a positive correlation with marriage intention and the number of children desired, measures to support regional community culture and revitalization of caring communities may be effective. Meanwhile, it is also necessary to reduce the opportunity cost of childbirth and the burden of high-cost, high-intensity parenting, and promote gender equality and efficient division of labor at work and at home.