Recent Fertility Decline and Its Implication for Population Policy in Korea

This paper examines the demographic trend in Korea focusing on the period since 1985. It is suggested that the change in fertility and mortality is the main driving force for the aging structure of population. The continuing decline of fertility below the replacement rate is accompanied by the changes in the various aspects of fertility including the delay in marriage and childbearing, an increase in the childlessness and the movement toward the gender equity at birth. Introducing the concept of externality to childbearing, it is argued that the relevant policy question is not whether a government should promote childbearing but how much it should be willing to pay for the policy implementation. A simple exercise suggests that the largest part of the externalities to childbearing are generated through the national defense and the intergenerational transfer.