South Korea's alarmingly low total fertility rate (TFR) of 0.75 in 2024, barely an uptick from the previous year's 0.72, underscores the nation's deepening demographic crisis. This figure, indicating the average number of children a woman is expected to bear in her lifetime, places South Korea alongside Hong Kong as having the world's lowest birth rates in 2023, according to UN population statistics. As low birth rates become a global concern, a recent report by the Korea Institute for Health and Social Affairs sheds light on the contrasting approaches taken by Japan and Germany, two nations that have navigated the challenges of aging populations and declining birth rates ahead of South Korea. The report offers valuable insights into the strategies employed and their effectiveness, providing potential policy directions for South Korea.
Japan's Focus on Child-Rearing and Regional Revitalization
Neighboring Japan entered a super-aged society in 2008 and is projected to have a staggering 40% of its population aged 65 or older by 2050. While Japan addressed its aging population relatively early, its response to the low birth rate was comparatively delayed. The sense of crisis surrounding population decline intensified around 2010, leading to the implementation of various countermeasures. Two prominent policy directions stand out: a focus on nurturing children rather than solely on increasing births, and addressing population decline through balanced regional development.
In April 2023, the Japanese government established the "Children and Families Agency" under the Cabinet Office, aiming to create a "society where children are at the center." This move centralized the support system for children and families, previously under the jurisdiction of the Ministry of Health, Labour and Welfare. The agency tackles issues such as child poverty, school maladjustment, abuse, and bullying, striving to enhance children's overall well-being and happiness. The underlying belief is that happier children contribute to happier families, which in turn can positively influence family stability and birth rates.
Complementing this, local municipalities have established Children and Families Centers, serving as comprehensive support hubs for children. These centers streamline counseling services and build integrated support systems related to all aspects of a child's life.
Recognizing that population decline is accelerating in rural areas while the Tokyo metropolitan area experiences population concentration, the Japanese government formulated the "Regional Revitalization Strategy" with the ambitious goal of maintaining a population of 100 million by 2060. This strategy adopts a regional balanced development perspective to address the crisis of regional extinction caused by population decline. Numerous domestic and international studies have validated the strong correlation between population decline and regional revitalization, demonstrating that decentralization and improved local finances boost regional employment and income, positively impacting population growth.
The government supports this strategy by providing Regional Revitalization Promotion Grants to local governments, enabling them to plan and implement diverse regeneration strategies tailored to their specific circumstances, encompassing housing, employment, economy, and childcare.
A particularly impactful initiative has been the "Hometown Tax Donation System," launched in 2008. This system allows taxpayers to donate to their hometown or any chosen municipality, receiving tax deductions in return. Local governments reciprocate by offering local specialties or processed goods as thank-you gifts, creating a virtuous cycle for the regional economy. This system generates employment and income in local areas, bolstering local government finances. The amount of hometown tax donations has surged from 8.14 billion yen (approximately 80 billion Korean won) in 2008 to 830.2 billion yen (8 trillion Korean won) in 2021. These funds are utilized by local governments to finance various projects in education, human resource development, healthcare, welfare, and childcare.
Germany's Comprehensive Approach and Embrace of Immigration
Germany, like Japan, experienced the challenges of an aging population and low birth rates earlier than South Korea. Since 1972, Germany has seen more deaths than births and began researching and formulating population strategies in the 1990s. Germany's current demographic strategy distinguishes itself by focusing on the well-being of all age groups rather than solely on birth rates, childcare, and children.
Adopting the slogan "Every Age Matters" in 2012, Germany's population strategy evolved in 2015 to aim for "Prosperity and a Better Quality of Life for All Generations." To achieve this, the government established working groups in ten key areas: families, youth, employment, senior living, dementia, regions, skilled workers, foreign workers, education, and public services.
A particularly noteworthy aspect of Germany's population policy is its immigration stance. On November 28, 2022, Chancellor Olaf Scholz officially declared Germany an "immigration country." This recognition reflects the reality that Germany has had to rely on immigrants to fill the skilled labor shortages caused by low birth rates and the retirement of the baby boomer generation.
Data from the German Federal Employment Agency revealed 1.7 million job vacancies in the fourth quarter of 2023 alone. A shortage of skilled workers exists in 183 occupational fields, particularly in nursing, healthcare, construction, and IT. Consequently, attracting skilled foreign workers has become a crucial and effective policy tool for maintaining economic vitality. Germany's recent immigration policies have shifted towards actively promoting the immigration of skilled foreign workers.
In 2020, Germany implemented the Skilled Immigration Act (FEG), easing the entry process for skilled workers from non-EU countries. In October 2022, the government adopted the Skilled Workers Strategy to actively recruit skilled workers from abroad and improve administrative procedures to support their integration. Since then, administrative procedures related to visas and employment processes have been continuously streamlined.
Integration policies for immigrants have also been strengthened. Under the motto "A welcoming structure creates a welcoming culture," experts from immigration authorities, state government ministries, and local authorities review and develop structures to support immigrants, formulating practical recommendations for further improvement.
Non-EU foreigners and refugees can participate in "social integration programs" that include 700 hours of German language classes. Pre-integration support is also available before entering Germany, including advice on regular migration pathways, language assistance, information about life in Germany, and a system where skilled workers are accompanied from their country of origin to counseling centers at the local authority level in Germany.
As of December 2023, the number of foreigners in Germany stood at 13,895,865, accounting for 15.2% of the total population. The proportion of foreigners has more than doubled in the past 50 years. Individuals with a "migration background" comprise 28.7% of the total population. This category includes individuals who are not currently German citizens, were not German citizens at birth, or have at least one parent who was not a German citizen at birth. This demographic is generally younger than Germans without a migration background, helping to mitigate the effects of aging. Crucially, over 74% of all foreigners residing in Germany are of working age (as of 2022).
Implications for South Korea
Despite accepting foreign workers since the 1950s, Germany only began to acknowledge its identity as an immigration country after 2010. This shift was driven by both external factors, such as the increase in refugees, and internal factors, such as labor shortages and an aging population. More recently, Germany has actively promoted policies to attract skilled workers to secure its industrial workforce.
This is no longer a distant issue for South Korea. The nation has long prided itself on its homogeneous ethnic identity. However, some industries are now struggling to survive without foreign workers. There is a growing chorus of voices advocating for a radical overhaul of South Korea's immigration policies to maintain economic dynamism.
A report published by the Korea Chamber of Commerce and Industry in July of last year, titled "Implications for Korean Immigration Policy Based on Advanced Countries' Immigration Policies," reached a similar conclusion. The report compared the outcomes of Japan's and Germany's contrasting immigration policies, arguing that South Korea's policy direction, which has historically leaned towards a discriminatory and exclusionary approach to foreign workers akin to Japan's, needs to shift towards a more inclusive model like Germany's. The experiences of Japan and Germany offer crucial lessons for South Korea as it grapples with its own demographic challenges, highlighting the need for comprehensive strategies that address both low birth rates and the increasing importance of immigration in sustaining economic growth and societal well-being.
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