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Women's Career Interruptions and the Declining Fertility Rate in South Korea
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and Jungmin Han (Senior research associate, KDI)
Traditional economic theories have attributed lower fertility rates to higher opportunity costs for women. However, since the 2000s, many high-income countries have observed a positive correlation between income and fertility rates, largely due to improved public education and childcare services.
In contrast, South Korea continues to record a low fertility rate despite rising income levels and increased female labor force participation. Notably, the fertility rate has dropped sharply from 1.24 in 2015 to 0.72 in 2023, a decline more pronounced than the OECD average. The report suggests that this persistent low fertility rate may be due to Korea's job market, which remains unfavorable for balancing work and family responsibilities, with women shouldering most of the childcare burden.
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Since the mid-2010s, Korea’s total fertility rate has rapidly declined, coinciding with a growing gap in career interruptions between women with and without children. Although the gender employment gap narrowed from 2013 to 2019, this trend has mainly benefited young women without children. As a result, the opportunity costs for women who choose to have children have increased. This heightened 'child penalty' is estimated to account for approximately 40% of the overall decline in the fertility rate.
To address this issue, the report recommends that South Korea implement long-term policies that support work-life balance and reduce the career interruption probabilities for women with children. Suggestions include promoting telecommuting, reducing working hours, increasing childcare subsidies, and encouraging greater involvement of fathers in childcare. These measures are expected to help women maintain their careers while raising children, potentially increasing the fertility rate and contributing to overall economic growth.
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Slower Growth Ahead for the Korean Economy
Export growth is expected to increase, while the recovery in private consumption and equipment investment is delayed. As a result, Korea's economic growth rate for 2024 is projected to be 2.5%, slightly lower than the previous forecast of 2.6%.
Meanwhile, headline inflation is projected to be 2.4%, down from the previous forecast of 2.6%, reflecting weak domestic demand and a downward adjustment in international oil price projections. Reflecting this weak domestic demand, the increase in the number of employed persons has been revised down from 240,000 to 200,000, while the unemployment rate is expected to remain at the previous forecast of 2.8%.
On the other hand, the economic growth rate for 2025 is expected to remain similar to the previous forecast of 2.1%.
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"The 2024 KSP Dissemination Conference” will be held on September 6 in Seoul, Korea, making this year's event especially significant as it marks the 20th anniversary of KSP. The event will be streamed live on YouTube.
- Theme: KSP 20 Years & Beyond
- Date: Fri, Sep 6, 2:00 PM - 17:30 PM (KST)
- Venue: The Shilla Hotel, Seoul, Korea
- Go to pre-registration (until August 30): RSVP
- To receive livestream notifications, click here
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"The 2024 Global Economy & Financial Stability Conference” will take place on September 3-4 and will be streamed live on YouTube. The conference will address major challenges in the global economy and international financial markets.
- Theme: Managing Challenges in the Global Economy, Evolution of Global Financial
Environment and New International Financial System
- Date (YouTube Livestream): Tue, Sep 3, 2:00 PM - Wed, Sep 4, 18:00 PM (KST)
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KDI Journal of Economic Policy Call for Papers
The KDI Journal of Economic Policy is now inviting submissions for an international conference on “Population, Aging, and the Economy,” scheduled to take place in Seoul, Korea, on Thursday June 5, 2025. Papers that are accepted and presented at the conference are automatically submitted to the KDI Journal of Economic Policy (website) for a special issue.
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