Despite spending 47 trillion won last year to tackle the country’s chronically low birth rate, about half of that budget was allocated to programs unrelated to the core issue. (Image courtesy of Yonhap)
SEOUL, Jun. 12 (Korea Bizwire) – Despite spending 47 trillion won last year to tackle the country’s chronically low birth rate, about half of that budget was allocated to programs unrelated to the core issue, experts warned, calling for a restructuring of government spending to better address the demographic crisis.
At a seminar on June 11 titled “The Need to Restructure Low Birth Rate Budget and Directions for Improvement,” held at the FKI Tower in Seoul’s Yeongdeungpo district, experts argued that previous policies had failed to yield significant results due to a phenomenon known as the “budget illusion effect.”
According to an analysis by the Korea Development Institute, of the 47 trillion won spent last year across 142 programs aimed at boosting the birth rate, only 23.5 trillion won from 84 programs were directly linked to the issue. The remaining 23.5 trillion won was largely consumed by housing support programs, which are not included in the Organization for Economic Cooperation and Development’s definition of “family expenditure.”
Family expenditure refers to cash benefits and services exclusively provided by the government to infants, children, adolescents, women and families.
Numerous programs with overly broad targets and objectives, such as preventing smartphone addiction among teenagers, were also included in the low birth rate response measures.
Experts also criticized the skewed distribution of funds, with 87.2% (20.5 trillion won) of the directly related budget concentrated on childcare, while only 8.5% (2 trillion won) was allocated to work-life balance initiatives, which are considered more effective and in higher demand among policy beneficiaries.
“Considering economic constraints and budget limitations, we need to focus more on supporting work-life balance, which is perceived as the most effective measure for boosting the birth rate,” said Hong Sok-chul, a professor at Seoul National University.
The president of the KDI, Cho Dong-chul, emphasized the importance of restructuring programs to focus on tasks directly linked to addressing low birth rates and enhancing policy effectiveness through in-depth evaluations.
Lee Chulhee, director of the Seoul National University Population Cluster, suggested that policy designs should carefully consider potential blind spots, such as unmarried individuals and the self-employed, even after budget restructuring, while Joo Hyung-hwan, vice chairman of the Presidential Committee on Aging Society and Population Policy, stated that while prioritizing the three core areas of work-life balance, childcare, and housing, the government would conduct in-depth evaluations to make appropriate structural adjustments.
M. H. Lee (mhlee@koreabizwire.com)
