◆ Low growth shock in Korea ◆
[인터뷰-1] Lee Sang-rim, Research Fellow, Korea Institute for Health and Social Affairs (Ph.D. in Demography)
Demographic change is considered one of the biggest variables that determine the future of countries around the world. Korea, in particular, is setting an unprecedented record in terms of population. Since 4-5 years ago, the low birth rate, which is difficult to find in the world, has been renewed every year, giving anxiety. Recently, Capital Economics, a British economic analysis agency, said, “The Chinese economy will never surpass the United States,” and cited the sharp decline in China’s working age population as the cause.
We met Dr. Lee Sang-rim, an expert in demography, to answer questions regarding the situation Korea is facing. The following is an excerpt from one question and one answer.
Q. In Japan, a country with great elderly people, it is said that the issue of aging is more urgent than the low birth rate. Is an aging population more frightening than a low birth rate?
A: Population aging is the result of the accumulation of low birth rates in a society. In other words, the low birth rate and aging population are the same problem. In Japan, regarding 30% of the population is aged 65 or older. About 15% of the population is over the age of 75. Having a small number of children causes problems such as shrinking the education market or problems with the school education system. but It is the increase in the number of older people that will make a big difference in real society and reduce the practical capacity related to finance and economy.That’s it. So, in fact, it can be seen that aging has more of an impact.
I can point out two things. However, that does not mean that we should give up on the issue of low birth rates. Another is that if you focus on aging, you may think of aging only as an increase in the number of elderly people and the increase in welfare for the elderly. If the population structure is aging as the number of elderly people increases, it can have other ripple effects throughout our society. We need to broaden our perspective rather than trying to narrow it down to the welfare of the elderly.
Q. What other ripple effects might there be?
A: First of all, in relation to elderly support, in Japan, more and more people quit their jobs to take care of their parents, especially the elderly with dementia. It is called caregiver turnover, and the number of caregiver turnover is increasing. At the same time, we are becoming a society with a shortage of labor. In addition, young people earn less in the process of taking care of their parents. will fall into poverty. As they live on their parents’ pension, the problem of poverty is growing.
Also, as the number of older people increases, vitality decreases. Then, young people tend to leave areas with many elderly people and focus on the metropolitan area. Regional inequality is growing, regional education systems are collapsing, the middle class is leaving, impoverishment is accelerating, and many other unforeseen problems emerge. There are many times when we don’t know if it’s a population problem even following the problem occurs.
For example, the domestic music market was the largest in the 1990s, but it has collapsed. At the time, people said that it was because of illegal records and that it was due to the influence of the IMF. The most important thing in my opinion is that the population of 20s and 30s, the largest consumer of pop culture, and the youth population have decreased. Even following the problem appeared, they didn’t know it was because of the population.
Q. The birth rate in Korea will be 0.7 next year. Japan is regarding 1.3. They say that Japan’s demographic situation is better than Korea’s, and Japan is not a situation to worry regarding, but is it true?
A: That’s right. Now that Japan has a large elderly population, the level of aging is high, but Korea will soon catch up. Korea will soon go beyond Japan. As we progress much faster than Japan has progressed, negative effects are likely to appear faster and stronger. It is almost certain that the 0.8 will collapse and become the 0.7 this year. There has never been a country like this. Even in societies where all-out war was taking place, birth rates were higher than this.
The cases where the 1.0 generation collapsed were when Germany was unified, East Germany, and Eastern Europe collapsed in the early 1990s. Because the social system has collapsed.
There is no particular reason why the birth rate in Korea is particularly problematic, such as the global economic crisis in 2008 or the IMF crisis before that. However, it has been declining since 2010. Originally, when there is a crisis, such as a financial crisis, even if the birth rate falls, it often recovers to some extent. By the way There has been no sign of recovery for over 5 years now. This is a very dangerous sign. It seems that the quality as well as the level of problems has changed.
Q. How has the problem qualitatively changed?
A: Until now, scholars dealing with population issues have generally considered the problem of low fertility as an issue of the cost of childbirth and childrearing. There was a graph that said that as costs go up, fertility rates go down, and as costs go down, fertility rates go up. But look these days The desire to have a family and the demand to raise children have changed. So, in the past, it was thought that if the cost problem was solved, children would be born, but now, even if the cost problem is solved, it seems that young people will not make the choice to have a child.
Young people with very different values appeared. There are several possible explanations for the reason. I think the factor is that Korea went through the IMF in the late 1990s, and society changed very quickly, and the experience of feeling happy in family closeness and family relationships decreased. It means that the value of the family has declined.
Families struggled hard not to fall out of the middle class, and the middle class ran for success, such as a good apartment, and their children also ran to go to a good university in their own way. I think my family became a kind of guerrilla. And then, it seems that the friends who grew up with those values began to have a desire for family, a fundamental value for family, a little different from what we wanted in the past.
Therefore, it seems that the effectiveness and efficiency of existing cost-related policies in Korea will be much lower than before. Therefore, other forms of social response will have to be prepared.
Q. There are so many people in Korea that it is better to reduce the population. Also, there is an argument that even if there is a shortage of workers, it is okay because the age of production has increased and there are robots?
A: It is true that the elderly are getting healthier. That doesn’t mean that productivity keeps going up or something like that. Depending on age, productivity does not continue to rise, but rather declines to some extent. And Healthy life expectancy does not continue to increase indefinitely. It goes up very slowly. Even if the elderly can work until the age of 6 or 70, it doesn’t solve the problem, but because Korea’s aging situation is so severe, it has the effect of slightly postponing it. Whether we can actually provide them with jobs is another matter.
second, The tendency of us to keep looking at the population problem only in terms of labor forcethere is This is very worrying. Population has many meanings. Populations are both producers and consumers. It is the sovereign, the military, and the taxpayer. Looking only at the labor force side of this is a very wrong look at the population, and in some cases, I think it is a very dangerous perspective. Even if we assume that science technology and robots solve production, then Who is consuming? It’s not just regarding exporting everything. There is also the issue of how to distribute the exports. Simple logic like that is not realistic.
Q. Will there be a vacant house problem or real estate collapse in Korea as in Japan?
A: Population issues affect the entire society. However, its impact does not spread uniformly throughout society. For example, if the national level is the level we usually recognize in Korea’s aging problem, it is much more serious in the provinces. The proportion of the elderly population in counties and places like this far exceeded 40%. In such places, not only real estate but also vacant housing problems are already taking place seriously.
It’s called fat loss. In fact, not only fat Regional decline is already occurring in large cities including Seoul, centrifugal centers, original downtowns, and old downtowns. As a result of aging, there are more vacant houses, and as young people leave, more vacant houses and more elderly people. Overall income levels are also falling, and educational conditions are deteriorating, and the middle class is leaving more and more, showing this vicious cycle.
There have been many predictions that there will be a real estate crash like Japan in Korea from around 2010. In fact, if you look closely at the case of Japan at that time, the prophecy was wrong. The collapse of Japan’s asset values was caused by a very excessive investment bubble to stimulate domestic demand or the impact of measures such as the Plaza Declaration rather than a population problem. It was the process of bursting that bubble, and the demographic change was slightly behind it in terms of timing.
only in Japan There was a clear impact of aging in reducing the rebounding power of real estate.That’s it. There is a market cycle in real estate, so it may rise once more someday. However, just as the aging population in Japan prevented a rebound following a collapse in asset values, it is highly likely that it will affect Korea in the same way.
Q. The rapid increase in single-person households and single people, how does it affect housing?
A: The number of single-person households in Korea will surely increase rapidly. Currently, there are many cases of living with a spouse and becoming a single-person household, but in the future There will be many cases of living life as a single person without marriage experience. Even if the population decreases, there is a prospect that the demand for housing will not decrease because the number of households increases, but I am a bit negative. I think housing demand will go in the form of a gradual sinking.
If you look at the Korean housing market right now, the price of a car will drop if you use it for a long time, but the price of an apartment will not drop even if it is old. That’s because it can be rebuilt. If there is an apartment with 100 households now, we will tear it down and build an apartment with 150 households. With the value of the additional 50 households, paying the construction cost and solving various asset problems.
The problem is, this is what it looks like when the population continues to grow. It is a growth model. If the population declines and the new influx disappears, it will be difficult to rebuild. In that case, the housing market can gradually sink, deteriorate, and develop into a slum. It is highly likely that such a form will emerge first from the local new town.
thus Real estate is highly likely to sink, especially in the provinces. Then, will Seoul and the metropolitan area continue to rise? In order to increase, you have to keep increasing the population. But is such a society sustainable? Probably not. At the same time, it seems that there will be problems in the reconstruction market in the metropolitan area.
So far, Korea’s housing market has tended to be very supply-driven. There are aspects that are unavoidable. But now, in an era of shrinking and declining population, what kind of housing policy should we do? We need to think regarding which housing policy will be highly sustainable.
As the population ages, the gap, inequality, and social conflict are likely to increase. In this situation, what form of housing will we protect our community? now no more We need to think regarding sustainable housing in the era of population decline rather than supplyism in the past growth era.
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