[KoTEX Issue No.6] Paying for Birth: Is it Worth It?
May 30, 2023 - Baby payments and family support programs have long been critical policies for nations seeking to balance and maintain population growth while also assisting families in need of guidance raising children. The strategies adopted for assisting families with children often differ according to the cultural, political, and historical circumstances of those implementing them. Here in South Korea, for example, the country has spent approximately 200 billion US dollars building programs to help families with new-born babies over the past 16 years. The concept of investing in childcare is not new: it is a strategy that has proven to work effectively in many countries. However, with the birth rate falling to record low levels every year, Korea is receiving criticism and constantly scrambling to find new and better solutions. When examining family assistance in greater detail, it becomes clear why some nations have been complimented for their birth policies while others, like South Korea, are receiving backlash.
As of 2022, women in Korea receive a payment of 2 million won ($1,510) after giving birth. The Yoon government made the decision to provide children under the age of one 700,000 won ($528) and those under the age of two 350,000 won ($264) a month in 2023. These benefits are estimated to increase to 500,000 won ($377) and 1 million won ($755) respectively in 2024. While it may appear that Korea is moving toward a better parental allowance for childcare and proactively seeking economic solutions to the country's low fertility rate, the policy is nevertheless drawing criticism because of what some see as its "throw money at it" approach.
Countries like Denmark, for example, provide some of the most lauded financial benefits for families, allowing them to receive up to two forms of assistance. The Child Cheque, for instance, is a quarterly tax-free payment that households receive until their child turns 18. The parents receive $756 USD every quarter for the first two years, which gradually declines to $157 USD per month when the child is between 15 and 17 years old. Similarly, Swedish parents receive a monthly allowance until their child is 16, while Luxembourg citizens with children receive a monthly allowance that covers schooling and certain living expenses until the end of their child's schooling or until they turn 25.
These key differences have led some experts to conclude that Korea's current methods will fail in the long term since they focus solely on "birth" rather than a longitudinal look at the child's life cycle. Moreover, when tackling this issue, cultural aspects should not be ignored. Many workplaces in Korea still exhibit traditional male hierarchical dominance, preventing monetary rewards from being as effective as they should be. Women in the workforce who request maternity leave are either demoted or, in the worst-case scenario, fired from their jobs unless they can find work that provides adequate maternity leave. From this perspective, it is evident that the "throw money at it" approach is inefficient for giving both short- and long-term help to families with newborn children. Although providing some form of monetary assistance is preferable to none at all, it appears that the differences between the Korean approach to family support and that of other countries are due to factors that initially caused the low fertility rates and the societal attitude toward not having children. Thus, without first addressing them, the problem will remain unresolved.
About the Author
Ms. Amy Suna Kim, Program Coordinator
Amy Suna Kim recently graduated with a master’s degree in International Studies from the Graduate School of International Studies, Seoul National University. Before this, Amy lived in the U.S., where she completed her Bachelor of Arts in Art History and Religion at Cornell College. Amy is not new to Asia Society. Previously, she assisted our colleagues at Asia Society Philippines as a program management intern. Amy will be responsible for brainstorming new ideas for upcoming projects and raising the visibility of Asia Society Korea across various audiences. She is fluent in both English and Korean.
