An analysis by the Korea Development Institute (KDI) revealed that 47 trillion won ($34 billion) was allocated last year to address low birthrates in South Korea, but half of this budget was used on projects not directly related to the issue. The astronomical 380 trillion won the government spent to tackle declining birthrates over the past 18 years may have been subject to a similar problem.
The list of items on the low birthrate budget is bewildering. Improving school insulation, installing solar power systems, preventing smartphone addiction among youth, constructing spaces for education and webtoon creation, supporting tourism business startups, and the Youth Tomorrow Fill Deduction system that helps newly employed young people accumulate wealth were on the list. Many of these were likely labeled as programs aimed at tackling low birthrates by various government bodies to secure additional funding.
Moreover, nearly half of the low birthrate budget, around 21.4 trillion won, was allocated to housing support. While housing support is not entirely unrelated to dealing with low birthrates, it does not directly address the core issue. Housing support is not included in the OECD’s “family benefits public spending” category, which is used as a benchmark for global comparisons.
This kind of budgeting has been criticized as a critical factor undermining the effectiveness of low birthrate policies by creating the illusion of pouring substantial investment into the issue without yielding the desired results. Calls for overhauling the inflated low birthrate budget have been raised for over a decade. Yet, the problem persists.
A look into a part of the budget actually related to combating low birthrates reveals another problem: 20.5 trillion won, around 87.2% of the total, was focused on childcare while a mere 2 trillion won, or 8.5%, was allocated to measures on work-life balance despite high demand from parents with children. This is problematic. A Bank of Korea report from December last year highlighted the potential impact of such measures on birthrates. According to the report, extending parental leave in Korea from the current 10 weeks to the OECD average of 61 weeks could increase the fertility rate by 0.096 births. Effective policies to address the low birthrate problem must start with effective budgeting and implementation.
