Unraveling the Complexity of Declining Birth Rates: The Case for Incentivizing Childbearing in East Asia

In East Asia, three decades ago, as women now in their 40s were entering their fertile years, governments saw a decrease in birth rates. This was a cause for celebration, as the region’s policymakers had successfully reduced teenage pregnancies. The downward trend was seen across the region, with the average number of offspring a woman would have decreasing from 4.5 in 1970 to 1.7 in South Korea alone.

The decrease in birth rates over just one generation was initially seen as a remarkable achievement. However, as time went on, the trend continued, and now a South Korean woman who is now fertile is projected to have only 0.7 children on average. Since 2006, the South Korean government has invested significant resources, around $270 billion or 1% of GDP annually, in incentives to encourage childbearing, such as tax breaks for parents and state-sponsored dating.

However, despite these efforts, the decline in birth rates has proven to be a complex issue, with solutions proving to be more difficult than anticipated. The government is now focused on incentivizing families to have more children in order to address the declining birth rates and ensure future population stability. The challenge is getting women to have more children rather than fewer, as officials realize the importance of replenishing the population.