New census data raises alarm . . .
The South Korean government released census data last week that shows that, for the first year on record, the number of births fell below the number of deaths in 2020, primarily attributable to a slowdown in births. While not unexpected, such demographic shifts pose a significant threat to the future of economies across the world. Country-level population impacts of COVID-19 vary and are still being tallied. But we see a growing worry that they may be accelerating demographic shifts across the world, and many countries, even advanced economies such as South Korea, are unprepared.
A dearth of births . . .
In 2020 in South Korea, roughly 1,000 deaths were attributed to COVID-19. However, other demographic impacts of the virus – its impact on marriage, birth rates, and lifestyle choices – are proving more significant. According to a Bank of Korea economic report released last week, the pandemic is leading to an “acceleration of aging in the population.” In South Korea, one of the main reasons cited for the declining birth rate is the growing economic stress felt by young adults who face high housing costs and uncertain employment prospects. In 2020 in South Korea, births were down 10.65 per cent from 2019.
A harbinger of what’s to come . . .
South Korea’s fertility rate is among the lowest in the world. In 1979 it had a fertility rate of 2.9, while in 2019, the rate was 0.9. A fertility rate of 2.1 is considered a necessary rate for population replacement. According to the United Nations, in low-income countries, the short-term effect of the pandemic may be an increase in unintended births as access to contraception decreases and increases in gender-based violence occur during lockdowns. Some other countries, such as Canada and the United States, may see an increase in women opting to delay or decrease the number of births due to financial constraints and increased economic uncertainty. The economic impact of COVID-19 and the demographic impact it made in 2020 will reverberate long into the future.