South Korean construction conglomerate Booyoung is introducing a remarkable incentive by offering workers a $75,000 bonus for every baby they have, amidst concerns over the country’s demographic crisis. Booyoung’s chairman, Lee Joong-keun, emphasized the urgency of the situation, warning that Korea faces the risk of extinction if the birth rate remains low.
South Korea’s total fertility rate, which measures the average number of children a woman is expected to have in her lifetime, has declined from 0.78 in 2022 to 0.72 in 2023, with projections indicating a further drop to 0.68 this year. This rate is well below the 2.1 level recommended by the OECD for maintaining a stable population.
With parliamentary elections approaching next month, political leaders are ramping up promises of financial incentives for potential parents. Proposals include enhanced housing allowances, tax breaks, mandatory paternity leave, and extended subsidies for egg-freezing programs.
The repercussions of the demographic crisis are already evident, with South Korea experiencing a decline in military personnel, dwindling student enrollment in universities and schools, and conversions of kindergartens into nursing homes. Notably, the sale of prams for pets outnumbered those for babies last year.
Government statistics indicate that the average newly-wed couple in South Korea carries a hefty debt burden, averaging $124,000. This financial strain is compounded by rising private tuition expenses, driven by intense competition for admission to prestigious universities and top-tier companies, as well as for housing.
While the South Korean government and other private companies offer financial incentives to encourage childbirth, Booyoung Group’s benefits stand out for their magnitude. Similar initiatives are also observed in China, which has witnessed consecutive population declines in recent years. For instance, Trip.com, one of China’s largest online travel agencies, provides employees who have served for at least three years with an annual bonus for each newborn child until the child turns five.
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