The Paradoxical Influence of Economic Growth on South Korea’s Birth Rate Dilemma Public
Kim, Yu Jun (Spring 2023)
Published
Abstract
Since the 1960s, while South Korea’s birth rate has rapidly decreased, economic development has increased. Among OECD countries, South Korea has the lowest birth rate, and South Korea is expecting scarce labor in its labor market. It can be easily predicted that a low birth rate will hinder potential economic prosperity. However, we can’t easily predict the influence of economic development on the birth rate. Despite continuous economic growth and childcare policy, the birth rate in South Korea is decreasing. Economic prosperity results in a better economic environment for citizens in South Korea. The economic development of South Korea led to increase in life quality. However, the decline in the birth rate shows that economic development negatively impacts the birth rate. An increase in quality-of-life improved citizens’ life and provided better living condition. The inverse relationship between economic development and birth rate seems to be indescribable. This irony can explain by Household Production Theory. This theory implies the production made by households is directly consumed by them, not by other consumers. Since caring for children is a household production and as the cost to maintain this production is rising, people refuse to have a child regardless of economic growth. Through this research, I will describe how household production theory resulted in a low birth rate by analyzing the relationship between economic variables and birth rate. Various data, graphs, and statistical tests will be used to explain this common birth rate phenomenon in South Korea.
Table of Contents
I. Introduction
II. Methods
III. Graphical Analysis
a. Time series graph of OECD countries
b. Geographical Heatmap of South Korea
i. Number of households
ii. Birth Rate
iii. Unemployment rate
iv. Employment rate
v. Income
vi. Household Expenditure
vii. Educational Expenditure
viii. House price
c. Time series graph of South Korea
i. Birth Rate
ii. GDP per capita
iii. Income
iv. Educational Expenditure
v. Household Consumption
vi. Housing price index
vii. Income vs Household Consumption
viii. Income vs House Price
ix. CPI
x. Unemployment rate and Employment rate
xi. Labor force participation rate
xii. Women quitting job for childcare
xiii. Average age of becoming a mother
xiv. Childcare support & policy (cooperation vs government)
IV. Statistical Analysis
a. General OLS model
b. Fixed Effect Model
c. Statistical Assumption
V. Conclusion
VI. Future Reference
VII. References
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