In Korea, every woman had six children on average over her lifetime in 1960. This dropped to just below one child per woman in 2018, and fell further year by year to reach 0.72 in 2023. From the 1960s to the mid-2010s, the decline in fertility came about as Korean women postponed the age at which they got married and reduced the number of children they had once married. During this time period, the vast majority eventually married and had at least one child. The period starting in the late 2010s marks a change, as falling fertility from this time on has increasingly been driven by married women having no children and women foregoing marriage altogether. This trend seems to have continued into the 2020s, even though the numbers remain difficult to interpret due to the Covid-19 pandemic.
As a consequence of falling birth rates, the Korean population is expected to halve over the next six decades and the elderly (aged 65 or older) will account for around 58% of the total population by 2082. During this time, the old-age dependency ratio (the ratio of individuals aged 65 and over to those aged 20 to 64) will surge from 28% today to 155%. The combination of a shrinking and ageing population poses a formidable challenge to sustaining social insurance systems and maintaining living standards. Labour shortages will intensify as retirees make up an increasing share of the population, and the fiscal cost of health, long-term care and pensions is set to more than double to 17.4% of GDP by 2060.
Goldin (2024) argues that countries like Korea display ultra-low fertility rates today because they were catapulted into modernity by rapid economic growth, while the beliefs, values, and traditions of their citizens changed more slowly. The resulting work–family trade-off is at the heart of the issue, but as pointed out by Pan et al. (2025), there is a tendency to brand this as a women’s issue. It is clearly not. In economics, corner solutions seldom optimise utility. Men specialising as breadwinners and women as home-keepers thus represents a huge welfare loss for both genders and a misallocation of human capital. A new OECD book analyses how gender norms, working culture and other societal traits interact to hold back fertility in Korea, despite heavy investments in family policies (OECD 2025).
To an extent, falling fertility reflects that young people around the world have better access to birth control and increased freedom to use it to live the lives they want with the number of children they prefer, which increases welfare for those concerned and reduces environmental pressures. However, in several countries, including Korea, young generations bring very few children into the world despite their preferences for more, and despite society needing more children to dampen the consequences of rapid ageing.
A large gender wage gap, long hours, and inflexible working practices are all remnants of a different time when men were fully committed breadwinners and women were fully committed housewives. These structures make it difficult to combine career and motherhood, and many Korean mothers are therefore still constrained to choose family over career for an extended period of time. This is manifested in a clear M-shaped pattern of women’s employment by age (see Figure 1). Men too are constrained and have little choice but to become the family breadwinner. This reduces the wellbeing of both men and women as well as family income. Seniority-based wages and a dual labour market compound the loss of lifetime income for any extended labour market absence. In previous times, when strong social norms dictated women to marry and have children, and women’s career opportunities were limited, women more easily chose family over employment. As Korea has grown richer, women have gained more equal opportunities to men in education and working life, and families increasingly rely on two incomes, the sacrifice of family income for each child has grown and pushed fertility to new lows.
Figure 1 The gender employment gap opens up as Korean women enter their thirties (2023)
Source: OECD, Labour Force Statistics (database).
Beyond the family budget constraint, it also matters to fertility that mothers bear a heavier individual career burden than fathers, as decisions to have a child normally require agreement between the parents. The importance of this individual cost of parenthood may have increased as a rising share of marriages end in divorce, and it may have been pushed up by a shift in preferences. When Korean married women were in employment in the past, this tended to be either out of necessity because their husband’s incomes were too low to feed the family, or because the financial rewards were substantial. However, since the early 2000s, the elasticity of married women's labour supply in response to their own wages and spouses' income have decreased considerably, which indicates that women’s preferences may have shifted in favour of career.
Direct costs add to the loss of income associated with parenthood. While expenditures for food, clothing and childcare have declined as a share of average family income, increases in housing expenditure have reduced fertility rates across the OECD, including in Korea. Also, reflecting Korea’s dual labour market, many parents allocate a sizeable portion of their income to private tutoring to help their children get ahead, making education expenditure another major hurdle to have children. In 2023, almost 80% of Korean schoolchildren were enrolled in private tutoring, for which their parents spent roughly 10% of their disposable income on average.
Family policies, including early childhood education and care, paid parental leave and family benefits, can make it easier to combine career and parenthood and partially compensate parents for cost from having and raising children. A major policy reform in 2013 made all preschool-aged children eligible for free childcare regardless of parental income, accompanied by the introduction of a parental home-care allowance for parents opting to care for their child at home. Parental leave has also been expanded and strengthened considerably over time in Korea. As a result, both the duration and the level of payment eligible parents are entitled to compare well with the OECD average.
Even so, the effects of these policies in terms of female employment and fertility have been underwhelming. Empirical evidence points to a sizeable income effect in which cash transfers and subsidised services provided in-kind increase household disposable income, enabling mothers to stay at home. Individual situations and preferences play an important role. For example, mothers living in areas with quality childcare available are more inclined to increase their labour supply as a response to the 2013 reform. The career maintenance effect of family policies will likely be weaker and the income effect stronger in countries like Korea where labour market institutions make it difficult to combine career and children at the outset.
The Covid-19 pandemic led to postponed marriages and childbirths, temporarily pushing fertility below its trend. The recent uptick in marriages and births reflects a catch-up effect from the pandemic years but may also signal the start of a reversal in trend, driven by the working-hour reduction reform phased in between 2018 and 2021 and the strengthening of family policies over the past couple of decades. However, a fertility revival will at best be slow until policies, gender norms and working practices taken together support a large majority of women to pursue career and family in tandem.
References
Choi, S., S. Ham, Y. Yang and J. Pareliussen (2024), “Women's employment and fertility in South Korea: a literature review”, OECD Economics Department Working Papers, No. 1825, OECD Publishing, Paris.
Goldin, C (2024), “Babies and the Macroeconomy”, NBER Working Paper No. 33311.
OECD (2025), Korea's Unborn Future: Understanding Low-Fertility Trends, OECD Publishing, Paris.
OECD (2024a), Society at a Glance 2024: OECD Social Indicators, OECD Publishing, Paris.
OECD (2024b), OECD Economic Surveys: Korea 2024, OECD Publishing, Paris.
Pan, J., C. Olivetti and B. Petrongolo (2025), “The evolution of gender in the labour market”, VoxEU.org 20 January.
Yang, Y., H. Hwang and J. Pareliussen (2024), “Korea’s unborn future: lessons from OECD experience”, OECD Economics Department Working Papers, No. 1824.
