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Title Analysis of Policy Measures to Address Low Fertility Rates Ⅲ [Policy Environment]

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Analysis of Policy Measures to Address  Low Fertility Rates Ⅲ [Policy Environment]
December 30, 2016
Tak Hyunwoo

    In order to identify the causes of low fertility rates and develop measures to address it, the report analyzes the burden of marriage, child birth, and child-rearing borne by individuals, who are the subject of policy attention and the central actors in child birth, in terms of time and costs. The analysis is conducted based on microdata as follows: the results of the past Population Surveys and Household Surveys conducted annually by Statistics Korea; the findings of the 2010 Population and Housing Census conducted by Statistics Korea; and the outcomes of the past National Surveys on Fertility, Family Health and Welfare in Korea conducted yearly by the Korea Institute for Health and Social Affairs.   
    According to the analysis of the policy environment related to marriage and child birth, the first finding is that the dispersion of equalized household income has been on a steady rise during the covered period starting from 1990, showing that income inequality has been growing rapidly. It is also found that the youth employment rate and the quality of jobs have worsened during the same time. Second, due to the nation's current demographic structure, it is harder for older single, never-married women to find suitable partners who meet their reasonable expectations (such as academic background, job, and economic activity). Third, as the age of women at marriage goes up, the number of their children goes down, and the percentage of those who stay single also goes up, which is the main contributing factor to the declining total fertility rate. Fourth, the monthly income amount and employment status are found to affect never-married men and women's willingness to marry. It is also found that for never-married women, the burden of pregnancy, child birth, and household work is another important reason why they remain single. Fifth, due to the narrow scope of the housing support program adopted by the government as part of its efforts to boost fertility rates, most newlywed couples and young people are left uncovered and are having greater concerns over housing costs amid rapidly rising house prices and rents.  
    The policy environment related to child-rearing is analyzed in terms of the time and cost spent on raising a child. First, it is estimated that it costs 167.6 million won for an average household to raise a child born in 2012 from birth to high school graduation (293.41 million won for the top 10% of income earners). Also, child birth and child rearing are found to have negative implications for the employment status of women. Second, not only for dual-income families but also for families that depend on women's earnings, women bear a greater burden of domestic responsibility, indicating that inequalities in the division of domestic labor still persist. Third, according to our analysis of the 2014 Time Use Survey conducted by Statistics Korea, the hours spent on commuting and child-rearing differ between wives and husbands.  
    Lastly, regarding our analysis of future environments related to population, it is necessary for the government to preemptively respond to slowly dying small cities and administrative districts due to the sharply declining population and to reflect future environments, such as the fourth industrial revolution, in developing population policies. The analysis also implies that the participation of the elderly and women in the labor force can be a good solution to the shrinking working age population.
    In light of the above results, the report makes suggestions as follows: the extent of the burden of child-rearing that society will take on should be determined based on the total estimated cost of child rearing; there is a need for discussion on an appropriate policy mix which includes child-rearing allowances and personalized daycare services; child-rearing and daycare services should be provided according the specific time use pattern of each household; and the relatively insufficient before- and after-school care for early elementary school students should be reinforced.
    Also, given the effect of delayed marriage and non-marriage on fertility rates, the government should adopt policy measures to enhance the equality of gender roles in marriage and family in order to promote marriage. As the government's rental housing-centered housing policy covers only a small portion of the entire target group, it should be revised to allow for a two-pronged approach: the existing interest rate discount and a more general, real estate-related benefit. 
    In addition, the government should prepare for small cities and municipalities dying out due to a sharp decline in their population, formulate comprehensive population policies which reflect the appropriate population size and demographic structure and the quality of life given changes in future policy environments, and establish measures to tackle the declining fertility rates from the perspective of sustainable national development.

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