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| Children run in Yongsan Children's Garden on Thursday on the eve of Children's Day. Yonhap |
By Jun Ji-hye
Local governments have been scrambling to expand childbirth grants to tackle the nation's falling fertility rate, but a recent report suggests that expanding childcare facilities and services could be more effective in raising the rate.
Korea's total fertility rate was 0.78 last year, breaking the country's own record for the world's lowest rate.
According to the report issued Monday by the Korea Institute of Local Finance, the fertility rate increased by only 0.03 when a 1 million won ($760) childbirth grant was offered. But by adding that 1 million won per new child to the budget for the expansion of childcare facilities and services, the rate would rise by 0.098.
The institute issued the report after analyzing policies related to birth and child-rearing implemented by 226 local governments across the country from 2009 to 2021.
The results of the analysis indicate that expanding childcare facilities and services, rather than offering childbirth grants, could be more effective in boosting the fertility rate and done at the same cost.
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| A staffer displays a variety of baby socks at an exhibition of baby products held at Suwon Convention Center on Feb. 5. Yonhap |
As for childbirth grants, the institute said that payment by installments was less effective than a lump-sum payment, and that a grant less than 2.5 million won per birth contributed little to tackling the birthrate problem.
The institute also raised concerns that indiscriminate cash support would provoke excessive competition among local governments.
It continued that the expansion of facilities and services related to childcare was more directly linked to actual reduction of childcare expenses and is expected to help parents in the long run, compared to cash support policies.
But the amount of budget allocated by local governments across the country for expansion of childcare infrastructure was only 13.4 percent in 2021, compared to 72.7 percent for cash support.
In that year, Jung District of Seoul spent 2.1 million won per child ― the most among other local governments ― to expand childcare infrastructure, followed by 830,000 won spent by Hwacheon County of Gangwon Province and 768,000 won by Ganghwa County in Incheon.
Jung District earmarked 670 million won in that year to operate childcare facilities for elementary students in and outside schools.
Hwacheon County fully funds university tuition fees for all students regardless of income level of their patients as well as costs for uniforms for high school students.
Ganghwa County has expanded leisure spaces for families by, for example, building the county-run kids cafe.
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