“It is difficult to have even one child, so ‘multiple children’ is absurd”, the need for a phased support policy to encourage childbirth↑

Korea Research Institute for Human Settlements ‘Diagnosis of causes of low birth rate and policy direction’ report
“Establishing active policies to ease the housing burden is the first step.”
There is a growing need for effective public education strengthening measures

Opinions were presented that housing supply should be expanded and acquisition opportunities expanded, such as by expanding the special supply for households with children and granting additional subscription points. As the burden of housing costs has the greatest impact when giving birth to a first child, it is pointed out that the burden of purchasing a home should be eased to encourage the birth of a first child, which is a short-term task for recovering the birth rate. The Korea Research Institute for Human Settlements said in a report titled ‘Diagnosis of the Causes of Low Birth Rate and Real Estate Policy Directions’ published on the 2nd, “When giving birth to a first child, the burden of housing costs has the greatest impact, and from the second child onwards, the impact of private education expenses appears to increase.”

Housing price contribution to birth rate decreases from second to third

The Korea Research Institute for Human Settlements believes that the key factors in Korea’s low birth rate problem are rising housing prices and private education costs, and analyzed the contribution of these factors to the birth rate, time-varying effects, and projections of the contribution of determining factors. The study was conducted based on time series real estate price and private education expenditure data from 16 metropolitan local governments across the country until 2022.

As a result of the survey, it was analyzed that the burden of housing costs, such as home sales and rent, had the greatest influence on the birth of a first child. The contribution of housing prices (sum of contributions to sale price and rent) to the first child birth rate was the highest at 30.4% (sum of contributions to sale price and rent), while private education expenses accounted for only 5.5%. The basis for this was that the birth rate continued to decline at a time when funds were flowing into the real estate market to purchase houses. In fact, since the early 2000s, when the government eased real estate regulations and actively provided housing finance, there has been a clear tendency for the housing market capitalization to increase and the birth rate to decrease.

The contribution of housing prices to the second child birth rate decreased to 28.7%, and private education expenses increased to 9.1%. In the analysis of the contribution to the third child’s birth rate, the contribution of housing prices decreased to 27.5%, and private education expenses increased significantly to 14.3%. The contribution to childbirth according to the previous year’s per capita income change rate and women’s economic activity participation rate decreased slightly from the first to the second to the third.

The Korea Research Institute for Human Settlements diagnosed that in order to overcome the low birth rate, the short-term goal of recovering the birth rate to 1.0 and the mid- to long-term goal of recovering the birth rate to 2.1 should be promoted step by step. In particular, to increase the birth of a first child, △grant additional subscription points to households without a home (preliminary) and with children △exempt housing acquisition tax considering the life cycle △expand the quantity of specially supplied housing △sale of public housing cheaper than market price △range of total debt service ratio (DSR) It was suggested that lowering interest rates on loans is necessary for the purpose of purchasing a home.

He then emphasized that in order to encourage the birth of a second child, it is necessary to expand the standard for multiple children, increase support for education expenses, and promote housing supply that can organically combine residential stability, child rearing, childcare, and education. Park Jin-baek, associate research fellow at the Housing and Real Estate Research Division of the Korea Research Institute for Human Settlements, said, “As of 2022, Korea’s total fertility rate is 0.78, which is less than 1 child.” “We need to move towards eliminating obstacles to having children,” he emphasized.


If house prices rise by 1%, it will be affected for up to ‘7 years’

The fact that residential stability affects the birth rate has been proven in several studies. The most representative example is the study ‘The impact of residence type on marriage and childbirth’ conducted by the Korea Economic Research Institute. The study, conducted as of 2020, found that the likelihood of having a first child when living in a jeonse lease decreases by about 10.1 percentage points compared to owning a home, and when living in a monthly rental, it decreases by about 19.5 percentage points compared to owning a home. In the end, it is explained that couples who have achieved housing stability through self-ownership are more likely to have children than when they live on rent.

Similar results were obtained in the ‘Study on the Dynamic Impact of Rising Housing Prices on the Declining Birth Rate’ conducted by the Korea Research Institute for Human Settlements in 2022. This study estimated structural changes in housing prices and birth rates using time series data from January 1992 to September 1, and found that when house prices rise by more than 2022%, the impact can last up to 9 years, and the total fertility rate is approximately The result was a decrease of 1 people. At the time, the Korea Research Institute for Human Settlements said, “The awareness that buying a house can be profitable is spreading, and the number of cases where the cost of having and raising children is being used to purchase a house is increasing,” adding, “There is a growing tendency to make decisions about having children from an economic perspective.” “He explained.

Improving the quality of public education is also urgent for multiple children

Strengthening public education to restore the birth rate of second children or more was also given as a task. As the burden of education costs has a greater impact on the birth rate as people have more children, voices calling for measures to reduce private education at the government level are growing. President Yoon Seok-yeol also emphasized the importance of public education in June last year, saying, “Questions outside of public education will be excluded from the college scholastic ability test.”

However, experts agree that the government’s education policy should be aimed at ‘improving the quality of public education’ rather than ‘easy CSAT’. This is because the superficial vision of strengthening public education can actually increase the influence of the private education industry. Jang Seung-jin, policy committee member of World Without Worries About Private Education, pointed out, “If the government recklessly puts out a confusing message about ‘easy college entrance exams,’ students who have to anticipate multiple scenarios will end up relying more on private education,” while Lee Man-gi, director of the Uway Education Evaluation Institute, said, “If the easy CSAT becomes a reality, the importance of grades and essay writing in entrance exams will increase, which will ultimately lead to another expansion of private education,” he said.

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