South Korea's Birthrate Rebound Faces a Test Beyond Cash and Subsidies

More Babies, but a Population Still Shrinking

South Korea recorded 254,500 births in 2025, an increase of 6.8 percent and its largest annual rise in 15 years. After years with the world's lowest fertility rate, the country has registered 17 consecutive months in which births exceeded those in the same month a year earlier. Its total fertility rate rose from 0.72 in 2023 to 0.75 in 2024 and approximately 0.80 by early 2026.

The improvement follows more than 360 trillion won in government spending over two decades, equivalent to roughly 360 billion Canadian dollars or US$250 billion, intended to encourage people to have children. Authorities have tried cash payments, cheaper housing, fertility treatment and even matchmaking. Companies have added substantial payments and childcare benefits of their own.

Yet deaths exceeded births by 108,900 in 2025, leaving South Korea with a continuing natural population decrease. The fertility rate measures the average number of children a woman would have over her lifetime if current birth patterns continued. A rate of about 2.1 is generally needed to keep a population stable without immigration. South Korea remains far below that level.

Countries facing similar pressures, including Canada, Italy, Spain and the United States, are watching the rebound. Researchers in Kingston, Ontario, are studying whether South Korea offers a useful model or is experiencing a temporary improvement. The central issue is whether public support is changing family decisions for the long term, or whether a larger generation entering its thirties and marriages delayed by COVID-19 are briefly lifting births.

The figures give officials some relief after a prolonged decline. They also leave families, businesses and policymakers facing the same practical challenge: making it possible to raise children without sacrificing financial security, employment or personal well being.

Why a Small Increase Matters So Much

South Korea's fertility rate reached a record low of 0.721 in 2023, usually rounded to 0.72. At that level, demographic projections point to a population roughly one third smaller by the early 2070s, with about half of residents aged 65 or older. The population aged 15 to 64, generally described as working age, is expected to fall by more than 20 million.

Fewer workers and more older residents would put pressure on the economy and the systems supporting retirement, healthcare and other public services. The Bank of Korea has warned that, without major adaptation through technological innovation and structural reform, the country could face a permanent recession by the 2040s.

A Korea Development Institute study released in May 2025 projected that demographic change would continue to drag down potential growth, possibly bringing it close to zero in the 2040s. Potential growth describes how quickly an economy can expand sustainably. Under the study's neutral scenario, the economy could begin contracting in 2047; under pessimistic assumptions, that could happen in 2041. Without enough technological progress to offset population decline, the resulting slowdown would affect living standards across income groups.

Defence planners also face a shrinking pool of eligible recruits while tensions with North Korea remain unresolved. Active troop numbers have been described as falling 20 percent to about 450,000; the figures given for the longer comparison are 690,000 in 2019 and about 450,000 now.

In 2024, the government passed its first pension reform in 18 years, pushing the projected depletion of the state pension fund back to 2071. Younger generations still face higher premiums and lower benefits, creating tension over how the costs of ageing should be shared. The military pension and civil servants pension have already been depleted.

How the Rebound Developed

The recent improvement follows several years of falling fertility, pandemic disruption and renewed marriage activity. Former President Yoon Suk Yeol described the decline in births as a national emergency. The main dates show both the depth of the fall and the limited distance covered by the recovery.

• 2020 to 2025: The number of women in the age bracket associated with the recent demographic boost increased by 9 percent.
• 2022 to 2024: Government survey data showed a 3.1 percent rise in the share of respondents intending to have children after marriage.
• 2023: The fertility rate reached its record low of 0.721, commonly rounded to 0.72.
• 2024: The fertility rate increased to 0.75.
• 2025: Births reached 254,500, up 6.8 percent, while deaths exceeded births by 108,900.
• Early 2026: The fertility rate reached approximately 0.80.
• After 2027: Demographers expect the boost from a larger generation entering its thirties to fade as smaller generations follow.

Marriage has a strong connection with births in South Korea because having children outside marriage remains rare. Marriage rates have grown for 20 consecutive months, while births within two years of marriage have increased by more than 10 percent after over a decade of decline.

Housing, Matchmaking and Fertility Treatment

In Dalseo district in Daegu, Mayor Lee Tae-Hoon began a matchmaking campaign in 2016. The district created a park intended for dates and commissioned mascots to promote romance. Couples brought together through the programme have married and considered having children.

Lee has compared population decline with climate change as a crisis and argued that young people should learn the importance of having children to avoid a dim future. One couple who met at a local government event said they would not otherwise have found each other. They are now married and considering children, the outcome officials hoped to encourage.

Incheon has focused on housing costs, allowing newlyweds and new parents to rent apartments for about one dollar a day. National support includes grants of roughly US$2,000 for first time parents and US$3,000 for subsequent children, alongside monthly allowances of approximately US$100.

Seoul has offered an additional one million won to newlyweds registering their marriage since 2025. Its 6.7 trillion won Birth Support Project includes welfare housing for newlyweds and expanded daycare capacity. Parents in the capital also receive two million won when a child is born and three million won for subsequent births.

Seoul's fertility treatment support allows women to attempt in vitro fertilization, or IVF, up to 25 times per successful birth, with the state covering most costs. IVF involves fertilizing an egg outside the body before placing an embryo in the uterus. In Canada, only some provinces provide partial coverage, and most limit patients to one fully funded cycle during their lifetime.

Officials in Seoul also floated a proposal in 2023 to exempt men from compulsory military service if they had at least three children before turning 30. The idea generated major controversy and was never implemented. Together, these measures show how widely authorities have searched for ways to reduce the financial and practical barriers to parenthood.

Companies Put Money and Time Behind Parenthood

Krafton, the video game developer headquartered in Seoul, offers employees approximately US$100,000 per child. About US$60,000 is paid as a lump sum, with the remaining US$40,000 distributed during the child's early years.

The company also provides free daycare from 8:30 a.m. until 9:30 p.m., up to two years of parental leave and an automated hiring process to fill positions while parents are away. The arrangement aims to reduce pressure to return early and prevent family decisions from stalling careers.

Jaekeun Choi, who leads general operations at Krafton, explained why the company views falling births as a threat to its own future:

If the birthrate continues to plunge the way it has for years, ultimately all of South Korean society, including our business, will find it hard to survive.

Krafton says more employees have had children since the programme began. It is working with Seoul National University to study whether the benefits are directly responsible. The effect of the programme on those decisions has not yet been determined.

Other companies offer up to 100 million won, roughly US$75,000, per birth. Technology and finance businesses are competing to provide attractive family benefits, bringing private employers into a campaign that once depended more heavily on government action.

Some expecting mothers in Seoul describe a change in workplace attitudes. A 30 year old identified by her surname, Kim, said older male managers previously had little understanding of parental leave. She said the burden had eased as taking time away for a new child became more accepted.

By law, mothers can take up to 90 days of leave for a single baby without complications, while fathers receive 20 days. Mothers still take the vast majority of leave. Company policies that provide longer absences and replacement staff address a practical concern behind those legal entitlements: whether employees feel able to use them.

A Larger Generation and Delayed Marriages

Park Hyun-jung, director of the population trends division at the Ministry of Data and Statistics, has acknowledged that she cannot fully analyse the connection between government policy and the recent increase in births. Demographic timing offers another explanation for part of the improvement.

About 3.6 million children were born between 1991 and 1995, during a brief rise following the end of official family planning policies. This generation, known as echo boomers, is now in its early thirties, a prime period for marriage and childbearing. The number of women in this age bracket rose by 9 percent between 2020 and 2025.

A larger number of potential parents can produce more births even when families remain small. After 2027, smaller generations born after 1996 will increasingly enter their thirties. Demographers expect that shift to weaken the current boost unless younger people have more children than their predecessors.

COVID-19 also delayed weddings and, in a country where births are closely tied to marriage, delayed children. The subsequent rush to marry has helped lift births. Some of the recent increase therefore reflects couples reaching milestones they had postponed.

Sojung Lim, a professor at the State University of New York at Buffalo, has noted that fertility has not returned to its level before the pandemic. She warned that the rate could fall again once the marriage rush passes and the echo boomer generation grows older.

Lim also pointed out that South Korea still has the lowest fertility rate among advanced economies and that the number of children people want remains below replacement level. The 3.1 percent increase between 2022 and 2024 in the share intending to have children after marriage is encouraging, but remains too small to change the long term demographic trajectory.

The Cost of Childhood Extends Far Beyond Birth

South Korea was ranked the world's most expensive place to raise children by the Beijing based YuWa Population Research Institute in 2024. Average costs from birth to age 18 were estimated at US$275,000.

Housing and food account for only part of the pressure. Nearly 80 percent of children attend private cram schools, known as hagwons. Intense competition for university places drives parents to spend heavily on tutoring from an early age because they feel unable to rely on public education alone.

These continuing expenses help explain why a payment at birth may have a limited influence on family plans. A mother expecting her third child said government grants fell short of the reality of raising children: expenses exceeded subsidies, and the financial responsibility lasted until adulthood.

Another expecting mother credited government initiatives with helping her decide to have another child, particularly support for moving to a different home. She also said many programmes did not fit her current economic circumstances. Her experience shows that support can influence a decision while still leaving gaps in what a household needs.

National grants, local housing programmes and company payments address different parts of family spending. Parents weighing another child must consider the combination available to them, alongside costs that continue long after the initial payment has been spent.

Work and Social Expectations Still Weigh on Mothers

South Koreans work an average of 1,865 hours a year, among the highest totals in the developed world. Long working hours leave less room for childcare, while mothers face substantial losses in earnings and employment after having children.

By the time a child turns ten, mothers' earnings have fallen by an average of 66 percent. South Korea has the largest gender employment gap in the Organisation for Economic Co-operation and Development, or OECD. Employment among mothers drops 49 percent relative to fathers over a decade.

Women also face anticipatory discrimination, meaning employers may hesitate to hire or promote them because they expect future pregnancy or childcare responsibilities. Around the time they have children, many women leave the labour market or move into part time or unstable employment.

A woman aged 31 who was expecting her first child in March felt compelled to quit because workplace support was inadequate. She explained that pregnancy often ended in resignation. Her experience sits alongside the more supportive atmosphere described by Kim, showing that changes in company practice are uneven.

Public spaces can add to the strain. Restaurants and cafes that exclude children, often described as no kids zones, have proliferated. Mothers report receiving negative looks when babies cry in public, leaving them feeling isolated.

Lim has also questioned whether government measures can overcome strict traditional expectations about forming a family. Single women cannot receive IVF treatment in South Korea. She argues that, without addressing deeper barriers, the rise in fertility will be temporary. For many women, the calculation involves time, workplace support and social respect as much as money.

Hungary and Sweden Show Different Limits

Hungary devoted roughly 5 percent of gross domestic product, the value of goods and services produced by its economy, to policies encouraging births under former Prime Minister Viktor Orban. Married couples promising to have children could receive interest free loans, mortgage subsidies and tax breaks.

Its fertility rate rose from 1.25 in 2010 to 1.59 in 2020, then fell to 1.31 in 2025. The improvement over that period largely faded despite the scale of the spending.

Critics argue that the incentives encouraged couples to have children they already intended to have, only somewhat earlier. They say the policies left shortages of childcare, problems with healthcare quality and rigid gender roles unresolved. Some scholars point to the Czech Republic, which experienced a similar rise and fall without programmes of comparable scale, suggesting broader regional trends were involved.

Sweden followed a different approach. During the 2000s, shared parental leave, affordable childcare and universal preschool helped lift fertility from 1.5 to 2.0. Those policies were designed to make work and family life more compatible rather than explicitly to increase births.

Scholars initially believed Sweden had resolved the tension between women's employment and family size. Fertility fell again in the 2010s. Demographers nevertheless argue that such support helped protect Nordic countries from the extreme declines experienced in East Asia.

Tomas Sobotka of the Vienna Institute of Demography argues that countries making it easier for women and men to share paid work and care are much better protected against deep fertility decline. The comparison shifts attention from the size of a birth payment to how responsibilities are divided throughout childhood.

China, Singapore and the Case for Adapting

China has introduced cash bonuses and tax increases on contraceptives since abandoning its one child policy. Its fertility rate has nevertheless continued to fall, reaching approximately 1.0. Singapore has also struggled despite decades of maternity leave, childcare subsidies and advertising campaigns that spread widely online.

Maxwell Hartt, a researcher studying population decline in Kingston, Ontario, argues that policies focused solely on raising birthrates are rarely the most effective response to population decline. He points to women's educational attainment, freedom and access to contraception as positive changes that societies would not want to reverse.

Hartt sees value in South Korea's initiatives beyond the number of babies born. Affordable housing, broader benefits and public spaces where people can meet can improve welfare, social cohesion and economic development, whether or not fertility rises substantially.

The global population is projected to decline before the end of this century. Hartt's argument is that governments should concentrate on building the best possible society within that reality, rather than trying only to restore earlier birth patterns.

South Korea's experience brings those two goals together. Better childcare, secure housing and parental leave can support people who want children while also improving daily life. The current rebound gives the country breathing room, but its ageing population, employment pressures and shrinking generations still require adaptation.

Key Points

• South Korea recorded 254,500 births in 2025, up 6.8 percent, its largest annual increase in 15 years.
• The fertility rate rose from 0.72 in 2023 to 0.75 in 2024 and approximately 0.80 by early 2026, still far below the replacement level of 2.1.
• Deaths exceeded births by 108,900 in 2025, so the country continued to experience natural population decline.
• Government spending exceeding 360 trillion won has supported measures ranging from housing and cash grants to matchmaking and IVF.
• Krafton offers approximately US$100,000 per child, extended parental leave and free daycare, while studying the effect of its benefits.
• A larger generation entering its thirties and marriages delayed by the pandemic are helping lift births; the demographic boost is expected to weaken after 2027.
• Education costs, long working hours, losses in mothers' earnings and restrictive social expectations remain major barriers.
• Hungary, Sweden, China and Singapore show that fertility can fall despite extensive support, while family services can still improve people's lives.