Fewer youths, more elderly and foreigners in Korea in 2030

Some 50 years on, the country faces the opposite problem, with one of the lowest fertility rates in the world and a graying population posing a threat to Asia’s fourth-largest economy. 

There is inherent uncertainty in population projections based on assumptions about plausible future trends. However, the way things look now, one thing appears to be clear: South Korea’s population will see fewer newborns, more elderly and foreigners in 2030. 

And the demographic shift will have a substantial impact on many aspects of Korean society including families, politics, job prospects, education, the welfare system and even military conscription. 

According to Statistics Korea, the size of the country’s population will peak in 2031 at 52.96 million and fall to 51.05 million in 2045. 

Behind the dwindling population is the country’s chronically low birthrate. It stood at 1.17 last year, meaning a Korean woman on average has only 1.17 babies over her lifetime, among the lowest in the world. 

An estimate of about 397,000 babies will be born by the end of this year in the country, the lowest number ever recorded. It will mark the first time the number of births in a year has fallen below 400,000.

Coupled with the low birth rate, the economically active population, made up of those aged between 15 and 64, started to fall for the first time this year, after peaking at 37.6 million last year, a trend called “a demographic cliff.” In 2050, the number is expected to drop to 25.9 million. 

While there are fewer people of working age, the population of those aged 65 years or older is projected to rise from 6.54 million in 2015 to 18.1 million in 2050. The country is forecast to become a super-aged society in 2026, with the elderly making up more than 20 percent of its 50 million population. 

Kim Jong-hoon, who leads a team that looks at the nation’s low birth rate and aging population at the Korea Institute for Health and Social Affairs, said that the low birth rate and aging population are likely here to stay. 

“The aging population is a trend to continue in the long term because people are living longer thanks to improved access to medical services and a healthy way of living. Policy cannot put a stop to it,” he told The Korea Herald. 

“But as for the low birth rate, it could fluctuate. It remains to be seen whether policies ranging from promoting marriage to improving child care services will be effective in raising the birth rate.” 

If the demographic shift continues, it will also reshape the country’s labor market, another expert said. 

“There will be a far smaller percentage of the young in the labor market and in 2030. More elderly will enter the labor force, and they will stay economically active,” said Seong Jae-min, director at the center for labor trend analysis at the Korea Labor Institute. 

“As there are fewer job seekers in the labor market, unemployment among the young and women will likely improve on the conditions that the gaps in working conditions and pay between small and medium-sized companies and large firms become narrower,” he said. 

“When it comes to income, there is a possibility of widening inequality, as jobs in the manufacturing sector -- which are mostly middle-income jobs -- are expected to disappear due to automation.” 

Experts fear that the low birth rate could lead to a reduction in the workforce and consumption as well as a jump in welfare costs for the increasing elderly population, which could hurt the potential for economic growth.

Korea is estimated to spend an additional 2.8 trillion won ($2.46 billion) per year between 2016 and 2065 due to its rapidly aging population and low birth rate, according to a report published by the Bank of Korea. 

The number of retirees to support per 100 people aged 15-64 is estimated to soar more than fivefold from 19.6 in 2015 to 71.5 in 2050, meaning a heavier fiscal burden for the working age population. 

The South Korean government has spent about 100 trillion won trying to boost the country’s birth rate over the past decade, handing out baby allowances and improving paternity leave systems. But these efforts do not seem to borne fruit. 

“More time is needed to evaluate the past demographic policies that have failed,” Kim said. 

Given such concerns, the Moon Jae-in administration has put priority on creating jobs, preparing the country for the “fourth industrial revolution” and tackling the demographic cliff. 

As part of efforts to alleviate the negative impact from the demographic change, there are growing calls to accept more immigrants, especially skilled workers. 

"To solve a demographic problem, accepting immigrants is not a perfect solution. But it could be a complementary policy,” said Chung Ki-seon, director at IOM Migration Research & Training Center. 

“Even when we had an abundant working-age population, we needed migrant workers. As the size of population starts to dwindle, there will be a higher demand for a foreign workforce," she said. “Accepting migrant workers could temporarily lower the average age of the economically active population.” 

Korea will need to take in 605,000 more immigrants by 2020 and 4.27 million more foreign workers by 2030 to achieve sustained growth, according to a 2014 report by the Korea Economic Institute. 

But questions remain over whether the population should be maintained at the same level as now. Is it impossible to lead a happy, downsized life when the country has a smaller population?

Cho Young-tae, scholar in demographic studies, said it is possible in his best-selling book, “Determined Future.” 

“It is time to prepare the country for the downsizing,” Cho said. “Korea should prepare its own institutions, culture and awareness to be in line with its downsized scale.” 

“The trend of low birth rate has continued since 2002, with newborns hovering around 400,000,” he said, calling it a “gradual, stable change.” 

“If we prepare for the downsizing for the next 10 years, the 20-to 30-year period after that will lay the groundwork for new development based on stable size of economically active population.”