As South Korea grapples with one of the world’s lowest birth rates, a new study suggests that rising income inequality may be a significant contributing factor. (Image courtesy of Yonhap)
SEJONG, Oct. 15 (Korea Bizwire) – As South Korea grapples with one of the world’s lowest birth rates, a new study suggests that rising income inequality may be a significant contributing factor, prompting calls for integrated redistribution and birth support policies.
The research, presented at a recent fiscal policy forum by Lee Jong Ha, a professor at Chosun University, reveals that South Korea’s income inequality has worsened at twice the rate of the average among Organization for Economic Cooperation and Development (OECD) countries over the past three decades.
Lee’s study, which analyzed data from 1990 to 2020, found a significant negative correlation between income inequality indicators, such as the Gini coefficient and labor income share, and both fertility and marriage rates in South Korea.
“As individual income disparities worsen, we see a corresponding decline in birth and marriage rates,” Lee explained at the forum held on October 11.
The Gini coefficient, a measure of income inequality where 0 represents perfect equality and 1 indicates maximum inequality, rose by 0.080 points in South Korea over the 30-year period. This increase was double the OECD average of 0.046, signaling a rapidly widening wealth gap.
Concurrently, South Korea’s fertility rate plummeted, marking the steepest decline among OECD nations, excluding several Latin American countries and Turkry. The country now holds the dubious distinction of being the only OECD member with a fertility rate below 1 child per woman.
The marriage rate in South Korea also saw a dramatic decrease, second only to Portugal among OECD countries. This trend is particularly significant in a society where marriage and childbirth are closely linked.
Lee’s findings align with previous international studies that have highlighted the inverse relationship between income inequality and fertility rates. In developed countries with a strong emphasis on educational investment, growing income disparities often lead middle and low-income families to prioritize education spending over having more children.
Despite these alarming trends, the researcher noted a lack of awareness in South Korea about the connection between income inequality and low birth rates. “There are currently no policies specifically aimed at addressing income inequality as a factor in our low birth rate crisis,” Lee stated.
To tackle this complex issue, the study recommends establishing a comprehensive control tower system to coordinate income redistribution policies with birth support measures. One suggested approach is to consider shifting the tax system from an individual-based to a household-based model.
M. H. Lee (mhlee@koreabizwire.com)
