South Korea has so few babies it is offering new parents $10,500

Cho Nam-hee [left] and Kwon Jang-ho often sit down together to budget the monthly costs of raising their 17-month-old son, Ju-ha [Raphael Rashid]

Ilsan, South Korea – In their apartment on the outskirts of Seoul, Kwon Jang-ho and Cho Nam-hee sat down recently at the kitchen table to work out the monthly budget for their 17-month-old son, Ju-ha.

“Raising a baby in Korea can be affordable if you don’t buy unnecessary stuff and take advantage of government support,” Kwon, who works as a broadcaster with a local radio station, told Al Jazeera, while poring over the numbers.

“In our building, there’s even a local government-sponsored centre where you can borrow things like toys or strollers for free,” added Cho, who is on maternity leave and, like most South Korean women, does not share her husband’s family name.

“Who doesn’t find it useful?” Kwon said. “It’s good that the government provides some support for families who already know they want kids but there are other factors to consider when it comes to tackling the low birth-rate problem.”

With the world’s lowest birth rate, South Korea faces a looming demographic and economic disaster. In 2022, the average number of babies expected per South Korean woman dropped to 0.78, down from the previous record low of 0.81 the previous year.

The replacement rate in developed countries – the number of births needed to keep the population stable – is typically about 2.1.

baby budget — South Korean couples such as Kwon Jang-ho and Cho Nam-hee can avail of a range of government benefits aimed at supporting young families [Raphael Rashid]

To reverse the trend, South Korea’s central and local governments are scrambling to provide payments and other benefits to anyone who gives birth to a child.

South Korea, which rose from poverty to developed country status in the span of a generation, is not known for its strong social safety – its social spending is among the lowest in the OECD.

But even compared with European countries known for their well-developed social welfare systems, many of which have implemented their own “baby bonuses” in response to low birth rates, South Korea’s schemes are generous and come with few strings attached.

Since 2022, mothers have received cash payments of 2 million won ($1,510) upon the birth of a child, more than in famously socialistic France.

Families receive 700,000 won ($528) in cash per month for infants up to the age of one and 350,000 won ($264) per month for infants under two, with the payments set to rise to 1 million won ($755) and 500,000 won ($377), respectively, in 2024.

A further 200,000 won ($151) per month is provided for children up until elementary school age, with additional payments available for low-income households and single parents.

Other benefits include medical costs for pregnant women, infertility treatment, babysitting services and even dating expenses.