South Korea's population is aging at an alarming rate. In 2023, it boasted the second-highest life expectancy in the world, but also recorded the world's lowest fertility rate of only 0.72 births per woman. This trend is set to continue and intensify in the coming years. By 2025, South Korea is expected to become a "super-aged society," with over 20 percent of the population being 65 years or older. Efforts to reverse the country's plummeting birth rate have thus far been unsuccessful.
Conversely, the elderly population aged 65 years and above is projected to more than double by 2050. The decline in the working-age population and the simultaneous increase in dependent people will impose a significant financial and social burden on the younger generation. Official estimates suggest that the national pension fund will be depleted in the next 30 years if the current pension system is maintained. Moreover, the Bank of Korea has warned that the declining birth rate may lead to negative economic growth from 2050 onwards.
The economic impact of population aging in South Korea
In 1983, South Korea's fertility rate dipped below the "replacement level" of 2.1 children per woman – the average number of births per woman required to maintain the current population size. In 2023, a mere 230,000 children were born, which was almost one-third of the level 20 years ago. The reasons behind this drastic decline in birth rates are high child-rearing costs, soaring property prices, and a work culture that hampers women's career progression after having children. If this trend persists, the country's total population is estimated to shrink to 36 million by 2072 – around two-thirds of the current population.Conversely, the elderly population aged 65 years and above is projected to more than double by 2050. The decline in the working-age population and the simultaneous increase in dependent people will impose a significant financial and social burden on the younger generation. Official estimates suggest that the national pension fund will be depleted in the next 30 years if the current pension system is maintained. Moreover, the Bank of Korea has warned that the declining birth rate may lead to negative economic growth from 2050 onwards.
