BOK diagnosed with coronavirus population shock, “the fertility rate could reach 0.7 next year”

Input 2020.12.30 06:00

2030, focus on employment and income shock… Postponing or giving up marriage or birth
Married childbirth may increase… Improving the homework/non-face-to-face nurturing environment
“Corona added to the low birth rate trend… 2030 pessimistic marriage view grows”

The Bank of Korea’s diagnosis that the impact of this year’s new coronavirus infection (Corona 19) could intensify the low birth rate. There was a pessimistic view that the total fertility rate, which fell to 0.8 this year, could reach 0.7 next year. As the decline in employment and income due to Corona 19 is concentrated in 2030 generations ahead of marriage and childbirth, there is a high possibility that pregnancy and marriage will be suspended or abandoned.

The BOK predicted that the decline in the fertility rate due to Corona 19 will continue for at least two years until 2022. Usually, after the end of disasters such as infectious diseases and wars, fertility rates often rebound rapidly, but it was diagnosed that Corona 19 was different. It is an analysis that the aftershock of Corona 19 remains in the job market for a while, and it is not easy for young people to have an optimistic view of marriage and childbirth.

The BOK predicted that the total fertility rate could be less than 0.8 next year in the BOK issue note’Checking the conditions of demographic change in the post-corona era’ published on the 30th. Korea’s total fertility rate as of the third quarter is 0.84
It is expected to decline to 0.85 people per year.

The BOK saw that the future population estimates released by the National Statistical Office in 2019 are likely to fall below the fertility rate under the low (pessimistic) scenario next year. At the time, the National Statistical Office announced that in the median (basic) scenario, the fertility rate was 0.86 and the lower fertility rate was 0.78.

Kim Min-sik, deputy head of the BOK’s Bureau of Research, said, “The future trend of the total fertility rate is likely to be closer to the low-level scenario than the existing mid-range expected in 2019, and it is difficult to rule out the possibility of falling below the low-level from a pessimistic standpoint.”

The report diagnosed the impact of Corona 19 on the demographic structure by dividing it into economic and social and cultural aspects. In terms of economics, it was noted that employment and income shocks occurred mainly in their 20s and 30s. During March and November, the number of employed people in their 20s and 30s decreased by 368,000 compared to a year ago.

This immediately led to a decrease in marriage and birth. In March-September, the number of marriages decreased by 16,000 (12.0%) compared to the same period last year. In the early days of the spread of Corona 19, there were many cases of wedding cancellations and postponements mainly due to fear of infection in the wedding hall, but the BOK decided that gradually unstable employment and income conditions had a greater impact on the reduction of marriage. In addition, the number of issuance of National Happiness Cards issued by pregnant women to support hospital treatment expenses decreased by 6.7% to 137,000 from April to August.

As the decline in employment is expected to continue for a while after the end of Corona 19, it is highly likely that the impact on the decline in childbirth will continue. The BOK decided that companies would reduce hiring through risk-averse hiring practices and increased automation investment, while experiencing risks to employment rigidity due to the Corona 19 outbreak. In this case, it may become more difficult for the younger to enter the labor market, the more difficult it is to secure a stable source of labor income.

The fact that telecommuting and non-face-to-face activities have spread due to reinforced social distancing is a factor that can lower the fertility rate in terms of social and cultural aspects. This is because young people’s perceptions regarding marriage can appear in a more negative direction. While competition becomes somewhat fierce, the need for marriage decreases as the single-person living conditions become more convenient. In addition, non-face-to-face activities can be a factor that makes it difficult for men and women in their 20s to 30s of marriageable age.

However, the non-face-to-face living environment can have a positive effect on the fertility rate of married people. As the opportunities for both married couples to participate in parenting are expanding, there is a possibility that the nurturing environment in the home will improve. In particular, in families with stable incomes, there is also an aspect that provides an opportunity to make a birth plan easier.

In general, infectious diseases and wars in the past often resulted in a rapid rebound in fertility rates after the disaster was over. However, it is a diagnosis that Corona 19 is different. Deaths from Corona 19 have been concentrated in the elderly, but changes such as structural changes in the job market and increasing non-face-to-face activities are likely to give negative perceptions of marriage and pregnancy to those in their 20s and 30s.

The report predicts that the impact of Corona 19 on the decline in fertility rates will continue until at least 2022. In addition, it is predicted that the decrease in the marriage rate due to changes in the economic, social, and cultural environment will continue to act as a factor of declining fertility rates with a staggered period of more than one year. As a result, the possibility of lowering the total fertility rate of 1.09, which was initially expected in 2040, has increased.

However, when the end of Corona 19 with vaccine development approaches, temporary marriage and childbirth delays are resolved, and the fertility rate is expected to recover to some extent at a time lag.

Deputy General Manager Kim said, “As the impact of Corona 19 adds to the ultra-low fertility trend that has continued before the Corona 19 crisis, the low birth rate and aging population are expected to accelerate.” In addition, in terms of economic, social, and cultural aspects, we need to strengthen our response to marriage and childbirth policies.”