Though immigration is a sensitive issue for all societies, the new President shall be well advised to open this frontier to counter the population decline, writes RAJARAM PANDA
First, South Korea followed Japan’s path of registering rapid economic growth in the 1960s to the 1970s. And emerged as one of the Four Tigers along with Hong Kong, Singapore and Taiwan as new growth centres in Asia, in the flying geese pattern of economic development when Japan transferred labour-intensive industries to overseas locations and shifted focus to knowledge-intensive sectors of industrial production. When Japan started facing the demographic challenges with a rapidly declining population, South Korea too fell into a similar trap. Both these two East Asian nations are at present facing one of the greatest population challenges, which unless corrected, can negate most of the prosperity and economic dividend available to their people. last week, I discussed the population challenges that Japan is facing and what measures are needed to address them. Today’s article deals with a similar situation that South Korea is facing now and what the future it portends.
In the immediate Post-World War II years, both these two Asian nations enjoyed a demographic dividend. A demographic dividend is a period where fertility rates fall due to a reduction in infant mortality rates. People tend to focus on their careers rather than children and this generally causes rapid economic growth. Both Japan and South Korea have high population density, which generally result in higher cost of living. Both being highly urbanised means higher costs to raise a child. For example, though China lifted the One Child policy after feeling its negative consequences, many in China still prefer to have only one child as costs of raising children have increased. Such a trend, for example, is less in the US and many other high- and middle-income countries.
One critical issue in the failure to address the demographic challenge has been the restrictive immigration policies that Japan and South Korea have in place in contrast to, for example, the US where the immigration is more open. However, President Donald Trump, is rethinking this from the economic perspective. If the US didn’t have an open immigration policy, the population pyramid would have looked more like today’s Japan. Immigrant families tend to be young and have more children.
It is a fact that decreasing populations impact the economy of a country. For example, Germany recently opened its doors to Syrian refugees. It could have been a humanitarian gesture but there was an economic benefit for Germany as well. With a strong manufacturing economy, Germany needed young skilled labour as depending on robotics is not always the answer to labour shortfall. The advantage of young labour force is that they are more open to change as opposed to the older population.
The situation in Japan and South Korea is different; immigration policy is restrictive. Reasons vary from social to cultural factors. language is another barrier. With an open immigration policy, the US and other Anglophone countries have been able to keep their economies afloat. The economies of Japan and South Korea face stagnation due to shortage of labour force, though there are also other reasons.
like Japan, the population projection in South Korea makes worrying reading on the nation’s future. South Korea has such a low birth rate that it could become the world’s oldest country by 2045, with an average age of 50 and if the same trend continues, the country could even go extinct by 2750. The country needs fundamental change in workplace and gender dynamics to arrest this worrying trend. The economic consequences could also be telling. Richard Jackson, president of the non-profit Global Aging Institute (GAI) and author of “The Graying of the Great Powers”, observes that “policies that help women (and men) balance jobs and children are the linchpin of any effective prenatal strategy”.
According to a GAI study, the number of Americans aged 65 and over will nearly double by 2030. More than one in three adults in Germany, Italy and Japan will be retirees by 2040. And there will be nearly 100 million Chinese over age 80, and more South Koreans may be turning 90 each year than being born by 2050. In an article on ‘The Future of Retirement in East Asia’, Richard Jackson observes that the role of the family in retirement security is receding in East Asia, but adequate Government and market substitutes have not yet taken its place. The study demonstrates how rapid demographic, economic and social changes are reshaping retirement attitudes and expectations across the region.
South Korea’s case is conspicuous as most Korean women are forced to choose between a long-term career and children — a phenomena witnessed more in South Korea than anywhere else in the developed world. The statistics are revealing. In terms of wage, women in South Korea earn 65 per cent of what men earn, though a 2012 survey showed that Korean girls aspire to high status careers more than boys. The number of Korean women in their 20s is larger than men but many drop out of the labour force in their 30s after marriage. Many do return when they are in their 40s but tend to get much less competitive jobs.
According to the Korea labour Institute, women spend five times as long taking care of children and the home than men. According to economist Jisco Hwang, “there are not enough modern men for the newly educated women to marry”. South Korea which emerged to be one of the wealthiest nations from being one of the poorest countries in the world in a short span of time has one of the world’s extreme work cultures, something close to Japan’s. like in Japan, male employees are expected to go out with clients to booze and bond, leaving little time to help out at home. like in Japan, Korean women are too not interested in marriage or if married, not to have kids.
What can the Government do to address this new situationIJ The least that the Government can probably do to increase birth rate is to work at the margins- promote gender equality. Nicholas Eberstadt, an American Enterprise Institute political economist points out to two models that have worked for other developed countries. One is the “nanny state” model, like in France and Sweden, where there is job guarantee after maternity leave. Sweden’s gender equality approach is that if the mother of a child takes maternity leave, the father takes paternity leave when a second child is born. In France government provides “family allowances” to those who have more kids.
The second model is “flexible labour” model like in the US, where it is normal to re-enter the workforce, work flexibly and combine professional and familial ambitions. This is not so in Japan and South Korea, where once a woman marries and has kids, she doesn’t return to work. There could be exceptions, however. Both Japan and South Korea are fit cases for the nanny-state model.
liberalisation in the immigration policy could be a better option too. One encouraging development in South Korea is that the number of mixed ethnic families has shown a steady increase; it grew 700 per cent from 2006 to 2014 as women from countries like China and the Philippines moved to South Korea for marrying Korean men. It is estimated that by 2030, 10 per cent of the population will be made up of foreign-born families, compared with a little over two per cent today. like in Japan’s preference of maintaining racial purity, the Korean preference of “pure blood” Korean would lose some of the shine as international marriages increase. In South Korea, there’s a huge stigma against unwed mothers and the government efforts to change social perception on family norms to boost birth rate have little effect on human perception.
Faced with overwhelming pressures, when South Korean women have gone on baby strike, there are other related issues that take centrestage. There are now more funerals than weddings. In 2016, the number of marriages and deaths was about even, and in 2017, deaths are expected to outpace nuptials. The number of young Koreans delaying marriage while society is aging rapidly is increasing. It is estimated that 280,000 marriages are expected in 2017 while 296,000 people would die. Related to this is the business, with many wedding halls closing as new funeral parlours comes up. The number of Koreans of marriageable age is declining while deaths are expected to reach new records.
Half of singles in South Korea are under 40. Singles eat and drink alone and live in one-bedroom flats, according to a report by KB Financial Group’s research centre. They stay close to their workplaces as don’t need to worry about food, schools and safe streets that trouble people with children. However, more women tend to be happier living alone than men. Men tend to be dissatisfied as they grow old and begin to worry about age-related issues. One consequence is that Korean men run short of brides. There would be a shortage of women who are willing to marry in a decade or so from now. Census data forecast that men between 28 and 35 will have severe trouble finding any bride between 26 and 33 by the year 2028. According to the sex ratio estimate, one in six Korean men will not be able to find a bride.
If Korean peninsula is reunified, unthinkable at the moment, a solution could be expected. But if it happens, demographics would skew slightly younger and the birth rate would probably rise again. But unification costs could stagger at $500 billion, besides huge wild cards about the human resources of North Korea. Interestingly, a poll by matchmaking company Bier-Aller in 2014 found that seven out of 10 single men in South Korea are open to the idea of marrying a North Korean woman, but no South Korean woman would marry a North Korean man. The response endorses the perception that North Korean women are beautiful and men from South Korea are handsome. While South Korean man is seen as wealthy, educated, well mannered, and financially sound, which attracts a woman from the North, South Korean woman would see a man from the North as skinny, short and clad in ill-fitting uniform, besides ideologically indoctrinated. Given the complexities, reunification is not the answer to address to the demographics of the South. With the impeachment of Park Geun-hye as the President of South Korea, and election due on May 9, it is to be seen what the new President does to tackle this worrying trend.
The writer is ICCR India Chair Visiting Professor at Reitaku University, Japan.
The views are his own and don’t represent either of the ICCR or the Government of India
