Chapter Five: Mature Structures

Countries in Profile: South Korea
The Demographic Transition on Fast-Forward

In mid-2006, Korea's news media announced that 23 local governments were offering payments of up to $1,000 at the birth of a couple's second child or beyond, with additional plans under way to award supplemental payments of $1,000 a month to families with children under age five. These bonuses and other incentives to encourage childbearing are only one component of the Korean government's plan to invest more than $19 billion over five years to raise the national fertility rate.¹⁹ South Korea's official fertility rate is 1.2 children per woman, one of the lowest in the world, although the nationally reported rate is even lower. South Korea exemplifies the few dozen countries in which population aging has become a major public policy concern, but its demographic situation today is very different than just a few decades ago.

After the Korean War ended in 1953, the following decade marked the beginning of a period of rapid development for South Korea in which demography played a key role. Education rates rose and improvements in public health were evident through declining mortality rates. In 1962 the Korean government, concerned that population growth would inhibit the country's economic development, established a national family planning program with extensive community-based education.²⁰ The program was scaled up further in the 1970s through campaigns aimed at eliminating families' preference for sons, more fully integrating women into society, and establishing a two-child family as a general ideal.

After the national fertility rate reached replacement level in the early 1980s, the government shifted its strategy from encouraging two children to just one as the social ideal. At the same time ultrasound technology became widely available, allowing expectant couples to determine the sex of their fetus at an early stage of pregnancy. This development, coupled with continuing cultural preference for sons, increased abortion of female fetuses. By 1993, the sex ratio at birth was 116 boys born for every 100 girls--a significant increase from a natural sex ratio of about 105 boys for every 100 girls--and the distorted ratio has continued in recent years.²¹

Today, South Korea has completed the demographic transition and is classified as having a mature age structure type. In 1970, with two-thirds of the population under age 30, Korea had a very young age structure; it progressed steadily through each of the following age structure types over the following 35 years. The country is still on the younger end of the range of mature age structures, with a relatively large proportion of people under 30 and a small share of older adults compared to other countries of that type.

Figure 5.9
South Korea's Age Structures, 1975 and 2005²²

In 1975, South Korea's age profile was beginning to show signs of its rapid progress through the demographic transition. Though the profile still retained a pyramidal shape from historically high fertility and mortality rates, the largest age groups were older children and adolescents, and declines in birthrates were evident in the smaller proportion of younger children. Thirty years later, South Korea's age structure has moved fully into the mature type and rapid fertility declines are evident in the small share of age groups under 30.

South Korea's swift progress through the demographic transition paid major economic dividends. Korea and other countries in the region are often called the "Asian Tigers" because of their rapid, dramatic economic expansion in the 1980s. As was the case in its neighbors Hong Kong, Singapore, Taiwan and Thailand, much of South Korea's economic growth can be explained by a specific shift in its population age structure known as the "demographic bonus."

Social changes in the 1960s, including investment in family planning programs, improved education and employment opportunities for girls and women, and later marriage ages, combined to reduce South Korea's fertility rate from nearly six children per woman in the early 1960s to 2.2 children per woman 20 years later. As family sizes decreased and the proportional size of children and teenagers in the population became smaller, parents and the government alike were able to invest more on a per capita basis in education. Families could also save more of their income, creating an increase in domestic investment levels. Labor force growth slowed, wages rose and the government encouraged the development of technology-based industries to take advantage of an educated work force. The impact of the demographic bonus contributed to an annual GDP growth rate in South Korea that reached seven percent in the 1960s.

Korea has been a remarkably prosperous and peaceful country for decades. The country has not experienced any recorded form of civil conflict since the end of its war with North Korea in 1953. Its governance record has been more mixed; after more than 30 years of military rule, full democracy was only achieved in the 1990s. Although, like the other Asian Tigers, South Korea experienced economic setbacks in the mid- to late-1990s, its economy has recovered and returned to its previous trend of dramatic expansion. In the first five years of the twenty-first century, the economy grew at more than five percent annually.

Figure 5.10
South Korea's Position Along the Demographic Transition

With its total fertility rate declining by two-thirds from six children per woman to two in about 20 years, accompanied by similarly dramatic declines in mortality, South Korea made one of the most rapid progressions through the demographic transition in history. Even assuming an increasing fertility rate, the country is still projected to have a mature population by 2050.

Figure 5.11
Current Demographic Statistics for South Korea²³

Population 1975 35 million
Population 2005 48 million
Population 2025 (medium term projection) 50 million
Population 2050 (medium term projection) 45 million
Median population age 35 years
Population under age 15 19%
Total fertility rate (2005-2010) 1.2
Contraceptive prevalence rate (modern methods, 1997) 67%
Unmet need for family planning no data
Life expectancy 75 years male, 82 years female
HIV prevalence rate (ages 15-49, 2005)

South Korea is an example of how, with the support of international partners, a country can rapidly achieve a more favorable age structure through a comprehensive, education-based family planning program. However, the government's emphasis on small family size worked too well once fertility rates had reached replacement level in the mid-1980s. With one of the lowest birthrates in the world, population aging is likely to remain a major political and economic issue in Korea in the coming decades. The government is targeting its efforts toward this problem at increasing the country's birthrate, rather than other areas such as immigration. However, financial incentives are having little impact on Korea's extremely low fertility rates, and concern is rising that a shortage of new workers is already slowing the rate of business creation. United Nations demographers, when creating their projections of future population trends, assume that extreme fertility rates (both high and low) will gradually correct toward replacement level. Thus, the UN's medium-variant population projections show South Korea's fertility rate rising 0.07 children per woman every five years, from its current very low level of 1.2 children per woman to reach nearly 1.8 by 2050. Even with this assumption, total population will decline below its current level by 2050. Population aging in Korea has so far had little impact on the country's political and economic development, but policymakers are wise to consider its future implications. History has provided few examples of proven public policy strategies to increase birthrates on a national scale in low-fertility settings. However, improvements in women's status have been conclusively linked to population stabilization in high-fertility settings, and the same may be true in low-fertility countries.²⁴ In South Korea, women remain underrepresented in universities, and only six percent of corporate executives, political leaders and senior managers are women.90 Such inequities are reflected in a continuing social preference for sons and an artificial sex ratio within the population, issues that should remain a central focus for the government.

Figure 5.12
South Korea's Potential Age Structures, 2025

If South Korea achieves the United Nations' low fertility projection of less than one child per woman in 2025, its population age structure will remain in the mature type. However, with just 24 percent of its population under age 30, the country would be nearing the aged age structure category that has not yet occurred. If the UN's high fertility projection is achieved, fertility would increase to 1.9 children per woman from today's level of 1.2, but the largest age groups in the population would still be those in their late fifties.

Summary Point

Although many countries have experienced slowdowns in economic growth and upticks in unemployment, there is little evidence that population aging in countries with a mature age structure has so far caused major economic distress. However, if aging countries maintain their low fertility rates and such trends are not offset by significant immigration, the economic effects of further aging are unknown.

Policy Recommendation

Countries concerned about the economic impact of aging populations could consider implementing policies already being tested, such as increasing retirement ages, reforming pension schemes, and bringing greater balance to women's professional and family responsibilities. Although these countries often focus on the needs and problems of the older segments of the population, they must continue to address the needs of their young people, including strengthening a support system for their childbearing decisions.