The rapidly changing demographics of East Asia's major economies are a slow-growing crisis, one analyst said last week at a talk hosted by the Asia Society Policy Institute, a U.S. think tank.
Some say the economic and social impacts of a sharp decline in birth rates and an ageing workforce in South Korea and its developed neighbors could be offset if the government tackled the underlying problems and adopted labor-saving solutions.
South Korea's fertility rate is the lowest in the world at 0.72 births per woman over her lifetime, despite the government pumping more than $200 billion into child-rearing policies over the past 16 years. Neighboring China (1.0), Japan (1.2) and Taiwan (0.85) are also near the bottom of the fertility rate table.
It is believed that a birth rate of 2.1 is needed to replace the population.
Falling birth rates in China, South Korea, Japan and Taiwan vex policymakers. But the problem is elusive, and it can't be solved with money. Falling birth rates in China, South Korea, Japan and Taiwan vex policymakers. But the problem is elusive, and it can't be solved with money. Photo illustration: Newsweek/Getty
A shrinking workforce
“South Korea's working-age population will decline by about 10.5 million people” over the next 20 years, said Troy Stangaron, director of the Wilson Center's Hyundai Korea Foundation's Center for Korean History and Public Policy, citing South Korean government statistics. “That means roughly a third of the labor force will be out of the labor force over the next 20 years.”
This decline in the workforce “will reduce South Korea's potential growth rate,” he said.
Citing statistics from the intergovernmental Organisation for Economic Cooperation and Development (OECD), Stangarone said he predicted that based on current trends, the country's GDP, which grew by 1.3 percent in 2023, could fall to 0 percent by 2050.
An economic downturn in the United States' top 10 trading partners — China, Japan, South Korea and Taiwan — is likely to have a knock-on effect on the U.S. economy.
“It's not a crisis of today. It's a long-term crisis,” Stangaron said of East Asia's demographic situation.
Downsizing of military forces
Another area that could be affected is national security: Seoul boasts one of the world's largest military forces due to decades of tensions along its heavily militarized border with North Korea.
Stangaron noted that South Korea aims to maintain an active-duty force of about 500,000. But “in 10 years' time, there won't be enough young men to lead and sustain an army of that size,” he said. “And that has implications for how we respond to various potential conflict situations.”
Taiwan and Japan, which are stepping up their defense efforts amid growing security threats from China, will also see their military sizes affected.
Andrew Orosz, a professor of political science and international relations at the University of Washington, pointed to the society-changing role that technology will play in preparing for a super-aging society in the future.
“The world's most advanced militaries are increasingly deploying their workforces using automation and technology, and this has nothing to do with demographic trends,” Orosz said.
Cooperation between a country with an advanced military like Japan and friendly countries in a region with growing populations, such as the Philippines and India, Japan's QUAD member state, can help ensure that the partners' strengths complement each other.
Attitudes towards marriage and children
Rising housing and living costs in cities and changing cultural attitudes among younger generations are the main factors behind the region's declining birth rate, which is highly correlated with marriage.
A 2023 survey released by South Korea's Ministry of Gender Equality and Family in May found that 38.5% of 13-24 year olds believe marriage is necessary, down 12.5 percentage points from 2017. Meanwhile, six in 10 13-24 year olds said they felt it was not necessary to have children even if they got married.
Jennifer Silva, president and CEO of nonprofit statistics company Population Reference, stressed that the decision to have children can come with a “long and complicated list of pros and cons.”
She said cash bonuses and maternity leave are often not enough to make a difference in the region.
“I think in every society, including the United States, women are being asked to have more children, work more and take care of the elderly,” she said. “Everyone needs to work together and recognize that policies in one area can affect policies in another.”
The South Korean Embassy in the United States did not immediately respond to a written request for comment.
