Offering financial incentives and tax breaks for starting a family is not a new concept, with many countries and corporations taking measures to ease the burden on new parents and alleviate the effects of falling birthrates.
South Korea faces a notably uncertain future due to its sharply declining fertility rate (the average number of children a woman will give birth to throughout her life). In 2022, South Korea's fertility rate was 0.78, the lowest in the world. It is projected to decline even further by 2025, to just 0.65. The country’s challenges are further compounded by an aging population, as nearly half of South Koreans will be over the age of 65 by 2072 (compared to 17.4% in 2022) if current trends persist. Such a demographic shift would effectively halve the country’s working-age population.
The South Korean government has already implemented measures to boost the fertility rate, including subsidized housing, postnatal care, and even a so-called “baby payment” of $2,250. Now, South Korea's business sector has started offering its own incentives, including a whopping bonus of 100 million Korean won ($75,000 USD) for any employee (male or female) of the Booyoung Group construction firm who has a baby.
Booyoung Group has already given out a total of $5.25 million for the 70 babies born to its employees since 2021. The goal is to ensure that when having a family, employees don’t have to sacrifice their career or work-life balance or shoulder the heavy burden of childcare costs alone.
The biggest of the baby bonuses:
- Statistics Korea projects that by 2072, South Korea’s population will be 36.2 million people, a drop of around 30% from 51.6 million in 2022. To maintain a stable population (without immigration), the fertility rate needs to be around 2.1 children per woman.
- Booyoung Group’s chairman, Lee Joong-keun, wants to stave off an economic “existential crisis” that could occur if companies no longer have enough of a workforce. Other South Korean firms are also offering enticing baby bonuses, yet none are in the same league as Booyoung Group. The Hyundai Motor Company and the steel manufacturer POSCO both offer payouts of up to $3,750.
- Booyoung’s baby bonus is undoubtedly generous, but it wouldn't be feasible for most firms. Nor do these payouts solve the gender parity issues contributing to the falling fertility rate. For example, many South Korean women report workplace discrimination when they choose to take parental leave and feel that having children will irrevocably damage their careers.
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