Exploring Korea’s Fertility, Work, and Family Policy Trends

4. Policy increasingly supports families, but housing- and private education costs remain barriers to having more children

Abstract

Family policy aims to increase family resources, thereby helping families with the cost of raising children. It could thus affect the timing and number of children and/or help parents with the expenses per child.

This chapter looks at different aspects of family and public policy that help reduce the direct cost of children to families. It considers the development of parental leave, formal childcare and child allowances in Korea over the last 25 years or so, and their effects on fertility trends in view of the evidence. The chapter also discusses two other items that affect fertility rates in Korea: the cost of housing and private education.

4.1. Introduction and main findings

Fertility decisions depend on a great many factors, including economic opportunities, financial stability, societal norms and attitudes, but also the costs and benefits of having children. In his seminal work, Becker (1960[1]) outlines how the cost of children affects fertility choices. Direct costs such as childcare, education and housing reduce the demand for children as do indirect costs such as the labour market opportunities that parents relinquish when having children – for example, the earnings and earning progressions that women forgo in motherhood.

Family policy comes in different shapes and forms across OECD countries, but the one thing these different policies have in common is that they aim to increase family resources. They help families with the cost of raising children and could thus affect the timing and number of children and/or help parents with the expenses per child.

This chapter looks at different aspects of family and public policy that help reduce the direct cost of children to families (Chapter 5 considers labour market aspects that impinge on the indirect opportunity costs). It considers the development of family policy in Korea over the last 25 years or so, looks at the strengths and weaknesses of the current system, and considers its effects on fertility trends in view of the evidence. The chapter ends with considering two other items that establish important outlays to Korean families and impact on fertility trends: the cost of housing and private education.

4.1.1. Main Findings

The main findings of this chapter include:

• Korea has strengthened its family policy over the past decades as public spending on family benefits over the past 25 years increased from 0.1% of GDP in 1998 to 1.8% of GDP in 2023. The bulk of public family spending is towards formal childcare or Early Childhood Education and Care (ECEC) supports and about two‑thirds of Korean children age 0‑2 participate in ECEC.

• At first sight, the Korean child-related leave system appears generous. In 2025, Korea offered 91 weeks of paid leave for mothers and 82 weeks earmarked for fathers, including maternity, paternity and parental leave. However, among parents of children born in 2024, 46% of mothers and 71% of fathers were eligible for parental leave (Statistics Korea, 2025[2]). Policy should extend coverage of earnings-related maternity and parental leave benefits to more non-regular and self-employed workers (Issues around the use of leave are discussed in Chapter 5).

• Over the past decades, Korea has developed a comprehensive system of ECEC supports with high enrolment rates and relatively low parental costs compared with other OECD countries. Quality issues have come to the fore involving different items, and since “childcare educators” play a critical role in the quality of ECEC-services, attention should be paid to ensuring good employment conditions of staff.

• Korea has also developed a system of financial transfers that nowadays includes a child allowance paid to all children under age 8 (with plans to expand coverage to age 13 by 2030) and a Child Tax Credit with both refundable and non-refundable components for children between ages 8 and 20. Policy needs to ensure that the overall system of child-related financial transfers is not regressive. It is important to monitor the evolution of the income position of families and, if necessary, strengthen income support for lower-income families.

• The evidence from the literature suggests that parental leave and childcare supports can have a positive influence on fertility trends, but in Korea this would mainly concern women with high levels of educational attainment, as they generally have access to, and make use of, such supports.

• The expansion of governments’ financial support for Assisted Reproductive Technology (ART) has increased uptake. Over the 2019-2024 period, the total number of births decreased by 21.1%, while the number of births using infertility treatments increased by 36.6%, and by 2024, 15.1% of all newborns were born with the use of ART. Policy design should ensure that couples of all socio‑economic groups have access to such support in equal measure.

• Housing costs negatively affect fertility trends. Policy has been effective in stabilising house price growth and demand-side support with the cost of borrowing is available for parents with young children. In addition, supply-side measures such as expanded investment in Affordable and Social housing is important, especially in Seoul, where prices are highest. More generally, housing quality and satisfaction with living conditions matter, so any effective policy initiative in this area, needs to include a focus on improving living conditions at affordable prices.

• But what makes Korea stand out compared to other OECD countries, is its long-standing feature of “educational competition”. From an early age – nowadays, often starting during pre‑school years – students spend long hours in a range of private institutes “Hagwon”, with private tutors, parents and on-line at home, to prepare for (school-) exams culminating in the tough College Scholastic Ability Test (CSAT) – “Suneung”, with the aim to gain entrance into prestigious universities and schools, and, at a later stage, good quality jobs.

• While the number of students is diminishing, household spending on private tuition is growing, and amounted to around 1.1% of GDP in 2024 – it was almost 0.4% of GDP in 2023 in Singapore – another country where private tuition plays an important role. Education spending as a share of final household consumption amounted to over 5% in Korea, more than 3 times as high as across the OECD on average.

• The “intense competition” has negative repercussions for child well-being, and with increasing monetary costs, raises issues around equity in education and social mobility as the wealthiest parents can afford to spend the largest sums.

• The evidence shows that the private education cost to parents has had a downward effect on fertility trends – in this environment, many parents cannot afford a second child.

• There is a need for a “societal covenant” involving a multi-faceted approach that involves all stakeholders, policymakers, education experts, industry representatives, parents and students to make the system more child- and student-friendly and more sustainable.

• The “societal covenant” should contain agreed and widely accepted guidelines on teaching hours and fees as subject to regional variation. Policy can help by considering a broad package of measures including continuing to improve the public education system, vocational training and the extension of capacity of out-of-school-hours services.

• The competitive nature of school- exams and CSAT could be reduced by extending an absolute standard to the exams in areas to which the relative scoring scale currently applies. Policy could also consider taxation of private education to curb its excessive use. It may well be most effective to initially focus this policy intervention on families with students who are not yet in high school, but the design of any potential tax measure should be carefully considered among experts and policymakers in view of prevailing policy objectives, equity concerns, the age of students as well as existing and planned education and tax policies.

The societal mindset needs to change to curb the use of private tuition after hours, especially for very young children. Continued awareness campaigns that evidence the benefits of play, social interaction, and respect for children could also be part of the broad package of measures. There is no simple and straightforward solution, the policy approach needs to be multi-faceted consider all measures and use a mix of them to take off the extreme edges of the competitive system. Without such a change the private tuition system will continue to exert its downward effect on fertility trends.

4.2. Public family support is strengthening

Korea has made great strides in policy support for families. In 1998 public spending on family benefits amounted to 0.1% of GDP.1 Twenty-five years later, it had increased to 1.8% of GDP, of which the bulk (1.3% of GDP) was spent on family service support – mostly supports towards formal childcare or Early Childhood Education and Care (ECEC) – (OECD (2026[3]), PF1.1 Public spending on family benefits). Korea’s public spending on family benefits as a per cent of GDP (1.8%) is below the OECD average (2.3%), which suggests there may be further opportunities to increase spending on families.

However, when considering per child public spending to families, the picture is different (Figure 4.1): Korea ranks 10th with an estimated public spending on family benefits per child at USDPPP 19  400, well above the OECD average of USDPPP 15 400. The number of children will be declining over the coming years, which raises the question whether fiscal space could be used to increase the coverage of paid parental leave benefits, and whether investment in ECEC should be sustained/increased to improve its quality, and/or whether spending on family benefits can be stabilised in view of the relatively low number of births. With the passing of time, this issue will also become more pertinent to public investment in public education. In 2022, direct government expenditure on education (without R&D) amounted to 4.4% of GDP, just above the OECD average of 4.0% of GDP (OECD (2025[4]), Table C1.2).

Figure 4.1. Public spending on families per child in Korea is above OECD the average

Public spending on family benefits in percentage of GDP and per child in US Dollar Purchasing Power Parties (USDPPP), 2021

Note: Public spending accounted for here concerns public support that is exclusively for families (e.g. child payments and allowances, parental leave benefits and childcare support and tax breaks), only. Spending in other social policy areas such as health and housing support also assists families, but not exclusively, and is not included here. Spending per child has been weighed such that spending on income support during parental leave and ECEC has been allocated among children 0‑5 inclusive, while spending on family cash benefits other than parental leave and the value of tax breaks with a social purpose has been allocated among children aged 0‑17 inclusive. Data for all countries refer to 2021.

Source: OECD calculations based public family spending (cash, services and tax breaks) as in the Social Expenditure Database, (OECD, 2025[5]),the number of children by age‑groups in the OECD Family Database (OECD, 2026[3]), and USD Purchasing power parities for GDP taken from OECD Purchasing power parities database (OECD, 2024[6]).

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Both public spending on family benefits and education have increased over the past decade. Public spending on 15‑to‑18‑year‑olds increased with the introduction of free high-school education in 2019. But the biggest change concerned the increased public investment focus on the early years. Compared to public spending per child as a percentage of median household income on children 10 years ago, public policy doubled investment spending during the early years and sustained the level of investment throughout childhood (Figure 4.2). This is in line with the productivity investment paradigm for investing in disadvantaged young children put forward by Nobel prize winner James Heckman, which involves early investment in children to be sustained throughout childhood (Heckman and Masterov, 2007[7]).

Figure 4.2. A continuum of public support throughout childhood

Public spending on family benefits and education by age in Korea, 2022, as percentage of median household disposable income of the working-age population

Note: Spending includes public spending on family benefits (cash, services and tax breaks) and education.

Source: OECD calculations based public family spending as in the Social Expenditure Database (OECD, 2025[5]), the number of children by age‑groups in the OECD Family Database (OECD, 2024[8]), Public spending on Education as in the OECD Education Database (OECD, 2025[4]), and average equivalised median household income as in the OECD Income Distribution Database (OECD, 2026[9]).

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4.2.1. Financial benefits for families with children are increasing

Over the past two decades the generosity of public financial support for families with children has increased gradually in terms of new measures, eligibility criteria for support and payment rates.

4.2.2. In-cash benefits

The first cash benefit for families with children was the “child home care allowance”, introduced in July 2009 (Park, 2022[10]). The payment provided support to low-income families who did not use childcare services and thus did not benefit from childcare fees support (MOHW, 2009[11]). Initially, the allowance was payable for children not yet 24 months of age. In 2011, coverage was extended to children not yet 36 months with payment rates varying by age, and to all 0‑to‑5‑year‑olds in 2013. As families with children of pre‑school age could receive support for childcare service fees, regardless of household income, all these families also qualified for the child home care allowance if they did not use formal childcare supports (MOHW, 2013[12]).

The “child allowance” was first introduced in September 2018, providing KRW 100 000 (about USD 69) per month to children not yet 6 years of age in households in the lower 90% income bracket (MOHW, 2018[13]). Eligibility was gradually extended from all children under 6 to all children not yet 9 years of age by April 2026, while the monthly payment rate was increased to KRW 130 000 depending on the region. It is planned to gradually extend coverage to all children under 13 years of age by 2030 (MOHW, 2026[14]).

In 2022, the “infant allowance” was introduced for 0‑and‑1‑year‑olds. Parents could choose between receiving a cash payment of KRW 300 000 as part of the child home care allowance, or a childcare service voucher (MOHW, 2021[15]). The infant allowance was superseded by the ”parental allowance” in 2023 with a payment rate of KRW 700 000 (about USD 518) per month for children not yet 1 year of age and KRW 350 000 for 1‑year‑olds in 2023. The payment rate was increased to KRW 1 million (about USD 690) in 2024 for those not yet one year of age and KRW 500 000 for 1‑year‑olds.

Since 2022, Korean parents can also receive a lump-sum “first encounter voucher” worth KRW 2 million on the birth of a child (MOHW, 2022[16]). The voucher amount was increased to KRW 3 million for the second (and subsequent) child(ren) in 2024 (MOHW, 2025[17]). Local governments may make additional payments.

4.2.3. Family tax credits

The child tax credit (CTC) system was introduced in 2014 and replaced a tax allowance (income reduction) for taxpayers who had more than two children that was introduced back in 2007 (MOSF, 2014[18]). The CTC has a refundable (payable in cash) and a non-refundable component. In 2025, the non-refundable tax credit was worth KRW 250 000 (about USD 170) for one child between age 8 and 20 years old – younger children are now covered by the child allowance2 – KRW 550 000 for two children, and KRW 550 000 plus KRW 400 000 per child for third or higher-order children (MOEF, 2025[19]).

The refundable part of the CTC evolved from the Korean Earned Income Tax Credit (KEITC) which targets low-income earners with no or limited tax liabilities. Prior to the reform in 2014, the KEITC was more generous to low-income earners with children – like the US EITC programme – but nowadays the KEITC payment does not depend on the presence of children. However, in addition to the KEITC, low-income earners with children under 18 are now also eligible for the refundable CTC-benefit (Jeong, 2020[20]). The annual income threshold for the combined household income increased from less than KRW 40 million in 2023 to almost KRW 70 million in 2024 (MOEF, 2023[21]). The maximum payment per child was KRW 1 million (about USD 700) in 2024 (MOEF, 2024[22]).

Although the number of children covered and the payment rates of the CTCs have increased, questions remain regarding the effectiveness of the system in terms of supporting low-income households. Jeong (2020[20]) and Kwon (2024[23]) illustrated that the current CTC system is regressive and provides fewer benefits to low-income individuals than to high-income individuals. It is important to monitor the evolution of the income position of families and, if necessary, strengthen income‑support for lower-income families.

While additional support through tax incentives is planned to respond to the falling birth rate, Park (2022[10]) suggested that the perceived impact of such support in reducing the burden of childcare costs would be limited. The target group of youth in their 20s and 30s have relatively low incomes and have limited tax liabilities compared with other age groups, thus limiting the effect of tax credits and deductions on income taxes (Kwon, 2024[23]; Kang, 2025[24]). From this perspective, it makes sense to prioritise direct fee support measures over tax incentives, at least in the short run, to effectively reduce the burden of childcare costs, which significantly influence intentions to have children among young, low-income households (Jeong, 2020[20]; Kang, 2025[24]; Kwon, 2024[23]; Park, 2022[10]).

4.2.4. Parental leave support is considerable, if you can get it

Paid child-related leave is a key element of family support in OECD countries. The child-related leave entitlement is designed to protect infants and mothers around childbirth, support parents in caring for their young children, and enhance financial security during leave and – through employment protection legislation – a return to paid work afterwards (OECD, 2023[25]). More recently, paid leave for fathers has been used to promote a more equal sharing of unpaid work within households by encouraging fathers to take up their child-related leave entitlements and become more involved in childcare (OECD, 2025[26]).

Child-related leave systems differ across OECD countries. They are typically classified into four types of employment-protected leave: maternity, paternity, parental and home care leave. Maternity and paternity leave are taken around the time of childbirth and are typically followed by parental leave, which is usually paid at a lower rate. In a few countries, parental leave may then be followed by home care leave, which is often paid at a flat rate or unpaid (OECD, 2026[3]). Paid parental leave entitlements are frequently shareable among parents, but many countries earmark specific periods for individual parents through mothers’ or fathers’ quotas (e.g. the Nordic countries), or by providing “bonus” periods of paid leave when both parents take leave (e.g. Austria, Canada and Germany). In countries without a separate maternity leave scheme, the period of paid parental leave reserved for mothers also serves as maternity leave (e.g. Australia, Iceland, Norway and Sweden).

As of April 2025, Korea provides the longest paid child-related leave earmarked for each parent among OECD countries (Figure 4.3). Korea offers 90 days (120 days in case of multiple pregnancies) of paid maternity leave and 20 days of paid paternity leave, up from 2 weeks in 2024. Parental leave benefits were previously provided for 12 months; however, since 2025, it can be extended to up to 18 months if both parents each take at least 3 months of parental leave. In total, Korea offers 91 weeks of paid leave for mothers and 82 weeks earmarked for fathers, the longest individual entitlements in OECD countries. In other countries with long leave entitlements (e.g. Finland, Hungary and the Slovak Republic), most of these concern shareable family- rather than individual entitlements.

Figure 4.3. Korea offers the longest paid child-related leave earmarked for each parent

Total weeks of earmarked and shareable paid child-related leave entitlements, 2025

Note: Information refers to paid childbirth-related leave entitlements to care for young children in place as of April 2025, such as maternity-, paternity-, parental–, and home care leave. Periods labelled “earmarked for mothers” and “earmarked for fathers” refer to individual non-transferable entitlements for paid employment-protected leave of absence for employed parents, “mummy and daddy quotas” or periods of an overall leave entitlement that can be used only by one parent and cannot be transferred to the other, as well as any weeks of shareable leave that must be taken by one or both parents for the family to qualify for “bonus” weeks of parental leave. Periods labelled “earmarked for mothers” includes weeks of maternity leave that are transferable to fathers. Weeks of shareable leave refer to parental- and home care leave entitlements that can be freely shared between mothers and fathers. For Japan, the 44 weeks of the individual parental leave entitlements for the mother must be taken used simultaneously with the father if both parents are to use the entirety of their entitlement. The bar is therefore shaded. For further detail, see source.

Source: OECD Family Database (OECD, 2026[3]), Indicator PF 2.1. Key characteristics of parental leave systems.

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At first glance, the Korean paid child-related leave system offers a high replacement rate, but subject to benefit ceilings. Maternity and paternity leave benefits are paid at 100% of previous earnings, but maternity leave is subject to a ceiling, resulting in an average payment rate of 82% for average earners (OECD, 2026[3]). Self-employed workers and some workers not covered by employment insurance receive only flat-rate maternity benefits. Parental leave benefits are paid at 100% of earnings for the first six months and at 80% for the remainder, subject to monthly ceilings. Under the so-called “6+6 scheme”, ceilings are increased for the first six months for each parent when both parents take parental leave simultaneously or sequentially until the child turns 18 months. However, under this scheme, the ceiling remains below the average wage, and the average replacement rate over an 18‑month parental leave period for average earners is estimated at around 48%. This is mid-range across OECD countries (OECD (2026[3]), Indicator PF2.1).

One of the main weaknesses of Korea’s parental leave system is that it does not cover all working parents, especially mothers. Eligibility for parental leave benefits generally requires coverage by employment insurance, which partly excludes non-regular workers as well as the self-employed (20% of workers in Korea). In addition, some women leave the labour market before taking paid leave. In all, among parents of children born in 2024, 46% of mothers and 71% of fathers were eligible for parental leave (Statistics Korea, 2025[2]). Chapter 5 further discusses workplace‑related aspects of child-related leave and its use.

4.2.5. A comprehensive ECEC-system

Issues around Early Childhood Education and Care (ECEC) policies can establish a major barrier to the reconciliation of work and family life and with that exert downward pressure on birth-rates. Hence, for (prospective) parents it is important to have access to affordable ECEC services of good quality, and public childcare investment is one of the public policy options that is associated with an upward effect on fertility rates (Fluchtmann, van Veen and Adema, 2023[27]).

Korea has developed a comprehensive ECEC system in a short period of time. In 1990 and 2000 public spending on family services, of which ECEC constitutes the bulk, was negligible at 0.1% of GDP, but by 2023 this had increased to 1.3% of GDP (OECD, 2025[5]). The rapid development of childcare centres took place between 1995 and 2015, while Kindergarten started to develop in the early 1980s (OECD, 2019[28]). In 2025, about two‑thirds of children aged 0‑2 were enrolled in childcare centres while almost all children aged 3‑5 participated in ECEC, although it is not compulsory (Ministry of Data and Statistics, 2026[29]). Compared to most OECD countries participation in ECEC in Korea is high (Figure 4.4).

Figure 4.4. Participation in formal childcare is high in Korea

Percent of children enrolled in early childhood education and care services (ISCED 0 and other registered formal ECEC services), 0‑ to 2‑year‑olds, 2024 or latest available

Note: Data generally include children enrolled in early childhood education services (ISCED 2011 level 0) and other formal childcare services that are in adherence with all ISCED-2011 criteria. For detail on the ISCED 2011 level 0 criteria and how services are mapped and classified, see OECD Education at a Glance 2025 Indicator B2. Data for Belgium, Czechia, France, Greece, Hungary, Ireland, Italy, Latvia, Luxembourg, the Netherlands, Poland, Portugal, the Slovak Republic, Switzerland, Bulgaria, Croatia and Romania are OECD estimates for 2024 based on EU-SILC. Data refer to children using centre‑based services (e.g. nurseries or day care centres and pre‑schools, both public and private), organised family day care, and care services provided by (paid) professional childminders, regardless of whether or not the service is registered or ISCED-recognised. Data for Hungary refer to 2022, for Australia, Austria, Brazil, Chile, Colombia, Denmark, Estonia, Finland, Germany, Iceland, Israel, Japan, Korea, Lithuania, Mexico, New Zealand, Norway, Slovenia, Spain, Sweden, Switzerland and Türkiye to 2023, and for Canada to 2025.Source: (OECD, 2026[3]), Indicator PF3.2, “Enrolment in childcare and pre-school”.

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Childcare centres, which often close around 8 PM and can accommodate children aged 0‑5, are regulated through the Childcare Act, while Kindergarten for children aged 3‑5 are regulated by the Early Childhood Education Act. Kindergartens provide 4 to 5 basic hours per day and can offer afterschool programmes for 8 hours or more per day. In 2024, children aged 0‑2 who were enrolled in childcare centres participated on average for 7 hours and 31 minutes per day, while children aged 3‑5 who were enrolled in kindergarten did so for 7 hours and 20 minutes per day on average (KICCE, 2024[30]).

The number of children participating in childcare centres (aged 0‑5) increased until 2012 but with the declining birth rate fell from 1.45 million children in 2017 to 1.10 million in 2022 (KICCE, 2023[31]). The decreasing number of infants and toddlers also contributed to a decline in the number of childcare centres since 2013 and kindergarten since 2017 (KICCE, 2023[31]). In particular private centres closed down, and the share of public childcare centres increased from 14% in 2020 to 18.8% in 2022, while the share of public kindergartens increased more slowly – from 57.2% to 59.7% (KICCE, 2021[32]; 2023[31]).

In addition to ECEC services delivered under the Nuri curriculum, a considerable number of parents prefer special activity programmes and participation in English language academies (Hagwon – see below for a discussion of private education in Korea) is increasing. In July 2017, there were 453 English language academies for young children (Hagwon) nationwide (Ministry of Education, 2017[33]), but by May 2025, the number had increased to 820 (Segye, 2025[34]).

Enhancing the quality of ECEC

As the ECEC system continues to develop, quality issues have come to the fore. Korea introduced the nationwide “Nuri Curriculum” at kindergartens and day-care centres for children aged 5 in 2012 and for children aged 3‑4 in 2013, upon which parental satisfaction increased (KICCE, 2019[35]; 2023[31]). The 2019 revision of the Nuri curriculum included the adoption of a “child-play focussed” approach rather than prioritizing structured learnings models, giving educators and carers greater autonomy in how to best implement the curriculum in line with the child’s individual needs (Jin, Kim and Kim, 2024[36]). The revised curriculum monitoring and support plan study (2022) provides guidance to teachers on how to implement play-based learning (Ministry of Education, 2022[37]).

Quality aspects of ECEC-services encapsulate different items, including standardisation of facilities and having access to services close to home to limit potential commuting times (Kim et al., 2024[38]). Since “childcare educators” play a key part in the quality of ECEC-services, attention should be paid to ensuring good employment conditions of staff. In 2024, the teacher-to-child ratio was 4.2 for childcare centres – 3.2 for all staff, including support staff (MOE, 2025[39]) and 13.5 (9.0 for all staff) for kindergarten (MOE, 2024[40]).

Childcare costs for parents are not high in international comparison

The government supports parents using childcare centres so that for a dual-earning family (with earnings at 167% of the Average Wage (AW)) childcare fees for children 2‑and‑3‑year‑olds amount to about 4% of the AW, which is low in comparison to most OECD countries (Figure 4.5). Furthermore, the Korean system includes additional financial benefits for children to attend childcare services from 4PM to 7.30PM to facilitate full-time working hours of parents (OECD, 2024[41]). Indeed, compared to other countries the Korean system facilitates daily participation of long duration, while in many other OECD countries daily participation is often limited to 6 hours or less.

Full-time working parents who often face considerable commuting hours have to rely on childcare arrangements, including family-based solutions. Standard daily operations in private childcare centres involve 12 hours of service and because of central and local government supports the household burden is limited.

Figure 4.5. Net childcare costs for a dual-earner couple are low in international comparison

Net childcare cost for parents using centre‑based childcare, for a couple earning 100%+67% of average wage, with 2 children aged 2 and 3 years old, in 2023, in percentage of average wage

Note: Figure does not reflect on accessibility and capacity issues. For example, the net childcare cost for Italy is due to the national childcare allowance combined with discounts in childcare fees offered in public / accredited childcare centres by local municipalities (in this case Rome) to low- and middle‑income households. The problem is the limited availability of public childcare, so many Roman parents do end up paying for formal childcare services.

Source: (OECD, 2025[42]), OECD Tax and Benefit Database, Net childcare costs.

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4.2.6. Public education and out-of-school-hours services

Children enter compulsory schooling in March of the year following the year in which they turn 6 in Korea, and after 6 years in elementary schools and 3 years in middle‑school complete compulsory education by age 15. Very often this is followed by 3 years in high school and 4 years in university or 2 to 3 years at a junior college (Ministry of Education, Korea, 2023[43]). Compulsory schooling hours in Korea are short in international comparison, at 842 hours per year in middle‑school compared to 909 hours across the OECD on average (OECD, 2025[4]) but Korean students more than make up for that in participation in out-of-school-hours (OSH) services and private tuition (see below).

In terms of learning scores, Korean students are ranked among top performers in OECD PISA test scores (OECD, 2024[44]). Indeed, Korea has the highest rate of tertiary attainment among 25 to 34 years olds among OECD countries: 71% compared to the OECD average of 48%, but Korean students often complete their studies with a bachelor’s degree as only 3% of young adults hold a master’s or doctoral (or equivalent) degree.

Education policy in Korea has been a central driver of the country’s human capital success, underpinning its rapid economic growth and social mobility throughout the late 20th century. A detailed assessment of the public education system is beyond the scope of this review. Indeed, OECD (2024[45]) provided a detailed assessment of the public education system and relevant future reform options, while OECD (2022[46]) made suggestions as to how strengthening vocational education, improving career guidance, facilitating greater employer involvement in response to the rapidly changing technological environment, and increasing the specialisation of universities in specific fields of study could help reduce skills mismatches in the Korean labour market. However, OECD (2019[28]; 2025[47]) both highlight mounting concerns over the effects of intense educational competition, associated inequality, student mental health and unsustainable burdens on families – particularly as they intersect with demographic trends (see below).

Out-of-school-hours services

Children in the public education system are often in school from 9 AM to 3 PM but these school hours are incompatible with a full-time working week in Korea with its long-hours culture, and considerable commuting times (Chapter 5). Children in primary and secondary schools are therefore likely to make use of out-of-school-hours (OSH) services, which almost all schools provide on the school premises until around 5 PM. Depending on age, the programmes cover a range of curricular and extra-curricular (education) activities, such as arts, music and sports activities. Community childcare centres are open to all students, but fees are income‑tested. In 2023, free admission was granted to 21.4% of students that participated in OSH services. In December 2023, there were also 3 931 community childcare centres which served 104 033 children, most of whom were of elementary school age (and may also have attended school-based OSH-programmes). Almost all (98.9%) of these centres received government funding, 19.2% were open after 8 PM and 15.4% were open every Saturday (MOHW, 2024[48]).

Compared to many other OECD countries, participation in OSH-services in Korea is comparatively high (Figure 4.6), even though it has declined in recent years. In 2016, 65.9% of all primary school students attended school-based OSH programmes but by 2024 that had fallen to 52.9% (MOE, 2025[49]). Contributing factors to this decline may be the increase in participation fees in real terms for low-income households, and an increased use of private education facilities. Over the 2016-2024 period, both participation rates and the weekly hours spent in private education increased for primary school students from 80% to 87.7%, and from 6.8 hours to 7.8 hours, respectively (KOSIS, 2017[50]; 2025[51]).

Figure 4.6. Participation in out-of-school-hours services is comparatively high in Korea

Proportion (%) of 6‑ to 11‑year‑olds using centre‑based out-of-school-hours services by age group, 2024

Note: Data for Germany and Hungary refer to 2022 and for Switzerland to 2023. Data generally reflect the proportion of children who use centre‑based out-of-school-hours services for at least one hour during a typical week, cover the use of services offered before and/or after school hours only, and do not cover “school-going” children who use centre‑based services only during school holidays or only on days when schools are closed. Exact definitions differ across countries. Data for Japan and Korea do not cover private Juku (Japan) or Hagwon (Korea). The OECD average is the unweighted average of the countries shown, excluding Korea, as age‑group-specific data are not available.

Source: For all countries except Japan and Korea, EU SILC; For Japan, Children and Families Agency “Status of implementation of the After-School Child Health Development Project (After-School Children”s Club)’ and Ministry of Education Culture Sports Science and Technology “School Basic Survey”; and, for Korea, Ministry of Education, “After-school Program Operation Status”. For more detail, see (OECD, 2026[3]), Indicator PF4.3 “Out-of-school-hours services”.

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Korea is in the process of integrating and improving existing after-school care and OSH-service programmes. Policy aims to support young parents by extending “school-care hours” and reducing the burden of private education expenses (see below). One step in the integration process was the introduction of the “Neulbom School initiative” in 2024-2025 for the youngest groups in elementary school with classes that could go on until 8PM (MOE, 2025[52]). Policy reform in 2026 – the “On-Dongnae Primary Care and Education Initiative”, aims to further develop an integrated care and education framework by expanding past policy initiatives with greater emphasis on school – community co‑operation, expanded support for third to sixth graders in elementary school and a shift from a predominantly care‑focussed model towards more diversified after-school educational content (Kang, 2026[53]; MOE, 2026[54]).

4.3. The impact of family policy on fertility trends

Modern family policy has many underlying objectives such as reducing family poverty, enhancing child development, promoting labour supply and gender equality and facilitating people to have as many children as they would like at the time of their choosing (Adema, 2012[55]). Therefore, the effectiveness of family policy as a whole should be assessed in its ability to help families in a range of areas. Then again, the overriding driver of family policy development in Korea has been – and continues to be, concerns about the persistently low fertility rate. And it is in this context that the Korean authorities established a Presidential Committee to develop and monitor the implementation of a coherent family-friendly policy response (Box 4.1).

Box 4.1. The Population Strategy Committee

Korea established a Presidential Committee on the Low Birthrate and Ageing Society in 2003 (Lee, 2009[56]). The role of the committee included analysing the impact of long-term demographic change, considering a coherent policy response and its impact, and every 5 years developing a “basic plan” (of action) with yearly implementation. Legislative reform is underway to establish a Population Strategy Committee and extend the scope of work to include demographic structural change such as regional population imbalances and diversification of types of households. The committee will also develop a Population Strategy Plan every 5 years, which will among other things include the setting of policy objectives, and analyses of (past and future) changes in population structure and their economic and social effects. At the time of writing – September 2026 – the exact scope of the Population Strategy Committee had not yet been defined in detail.

Prima facie, one may expect family policy to have a positive effect on fertility rates. After all, family policies increase family resources and the associated reduction of direct (e.g. on housing) and indirect costs (more hours in paid work), reducing the “price of having children”. Then again, having more resources may simply mean that parents spend more (per child), which curtails any positive effect on the fertility rate. Of course, country contexts (e.g. in terms of labour markets, prosperity, social cohesion) differ, but cross-national studies generally find a positive association between spending on family policy and the TFR (e.g. (Hwang et al., 2023[57])). The effectiveness of family policy interventions also varies with the type of intervention. Applying an OECD wide‑regression, Fluchtmann, van Veen and Adema (2023[27]) showed that the duration of paid leave for mothers is significantly associated with TFRs; public spending on ECEC – which covers accessibility, availability and intensity of use as well as affordability and quality, has a significant positive association with fertility rates; and public expenditure on family cash benefits has a significant relationship with the TFR, but it is of weaker statistical significance than for spending on paid leave or investment in ECEC. Overall, the direct link between family-policy interventions and numbers of births should not be overestimated (Gauthier and Gietel-Basten, 2025[58]).

Most international research shows that monetary transfers for families with children have no or only modestly positive effects on fertility, for example Skirbekk (2022[59]) and Waldfogel (2025[60]). Kim (2024[61]) found that local government cash payments over the 2000-2015 period slowed down the decline in the TFR in Korea, but other studies often suggest such effects to be temporary, e.g. Chuard and Chuard-Keller (2021[62]) on Switzerland or González and Trommlerová (2021[63]) on Spain, or related to specific groups, e.g. immigrant women with low educational attainment as illustrated by the experience with the Australian Baby Bonus (Bonner and Sarkar, 2020[64]). By contrast, Hungarian policy is more geared towards stimulating birth-rates among middle‑ and high-income earners, as the support system is tied to formal employment and benefits higher-income earners most through housing loans and the tax-system (Erát, 2026[65]; Kreko et al., 2023[66]); In Hungary, women with four or more children have been exempted from personal income tax since 2020, those with three or more children in 2025, and to be further extended to two or more children over 2026‑2029. However, the fiscal cost of this policy is high (0.5% of GDP in 2026 (OECD, 2026[67])) and its expected impact on fertility is limited. Gray et al. (2022[68]) summarised the international literature as showing that the impact of financial transfers is small because the transfers only represent a small fraction of the large direct costs of children (Box 4.2).

Box 4.2. Parental prisoners of love

Tax-financed family and education policies socialise the costs of child-rearing and across 12 European countries parents pay about 75% of the taxes non-parents pay. However, when accounting for the money and time spent on children and opportunities forgone in an intergenerational transfer model, parents spend over 2.5 times as much as non-parents in transfers (Vanhuysse, Medgyesi and Gál, 2023[69]). An earlier study for the United States also points to the substantial positive net present value of childrearing for society (Wolf et al., 2011[70]).

To some extent that seems fair enough. After all, becoming a parent is presumably a free choice. However, raising children has a public good component, children generally grow up to become workers, taxpayers and caregivers who finance and complement social protection systems that also benefit non-parents. “If societies do not properly value the transfer cost of having children, they risk producing too few productive adults” (Vanhuysse, Medgyesi and Gál, 2023[69]). Increasing the visibility of the value of unpaid work (e.g. van de Ven, Zwijnenburg and De Queljoe (2018[71])) or career opportunities (e.g. Kleven, Landai and Leite‑Mariante (2025[72])) helps to illustrate the full cost of reproduction in societies which unequally share intergenerational support.

4.3.1. Parental leave policies

Reviews of the international literature on industrialised countries, e.g. Thomas et al. (2022[73]) found that parental leave can have a positive effect on fertility trends if payment rates are high enough. OECD-wide regressions confirm this finding (Fluchtmann, van Veen and Adema, 2023[27]). For Korea, Kim, Lee and Halliday (2022[74]) found positive effects of childcare leave (parental leave) for women on fertility.

Intuitively, the recent increases in paid father’s leave entitlements should stimulate paternal personal care provision and reduce gender inequality in unpaid work, thereby exerting an upward effect on fertility trends. However, the evidence so far suggests that earmarked parental and paternity leave for fathers has no discernible effect on fertility outcomes. In part that may be because father’s leave reform is recent, and their uptake of it has yet to become the norm. Then again, earmarked father’s leave was introduced in Norway (1993), Sweden (1995) and Iceland (2001), and use is widespread. However, the evidence for these suggests that fathers generally only take as much leave as what is reserved for their use – that use is likely to only substantially increase only if the non-transferable entitlements are extended (Albrecht et al., 2026[75]), and that fathers’ increased use of child-related leave had no clear overall impact on fertility trends (Duvander, Lappegard and Johansson, 2020[76]; Hart, Andersen and Drange, 2022[77]). Denmark went through an important change in parental leave policy in 2022 following the introduction of “EU work/life balance directive” (European Union, 2019[78]). The ensuing reform was significant in that it increased the period of child-related leave for fathers from 2 to 11 weeks, but without extending the overall parental leave entitlement unlike leave‑policy reform in most countries: the period of leave available to mothers was reduced by 9 weeks. Kleven et al. (2026[79]) show that the reform reduced satisfaction among parents as earmarking constrains parental choice, but at the same time it increased fathers’ use of leave, while also making parents more supportive of fathers taking leave, and shifting gender norms in more egalitarian directions. Whether these effects will hold in the longer term and affect fertility trends remains to be investigated in future.

Pan (2025[80]) found that the impact of father’s leave on fertility in countries with limited gender gaps in unpaid work (such as Norway and Sweden, Chapter 2) was negative, while it was positive for countries with greater gender inequality in unpaid work, such as Japan and Korea. In these countries even a limited increase in father’s involvement in childcare releases pressure on the mother, while in more gender equal countries, this effect will be more limited, and fathers’ leave may add to work-life balance conflict.

Fathers’ use of child-related leave may have had an effect on birth parities. Duvander et al. (2019[81]) found a positive association between fathers’ leave use and second births in Norway and Sweden, and a negative one between fathers’ parental leave use and third births. Similarly, Lee (2022[82]) for Korea and Farré and Gonzalez (2019[83]) for Spain found that increased fathers’ use of leave could reduce the desire for additional children. This may be because fathers have become more aware of the increased cost of childrearing or because they adjusted their preferences. It may also be because fathers’ increasing involvement in childcare led to higher labour force attachment among mothers, thereby raising the opportunity cost of having an additional child.

4.3.2. Evidence on the impact of childcare supports

The literature generally associates formal childcare with having a positive effect on fertility (e.g. (Doepke et al., 2022[84]; OECD, 2009[85]; OECD, 2024[86]). Effects may vary across regions, e.g. see Fukai (2017[87]) on Japan; by mode of financing (Kang et al., 2026[88]), or by birth order (Bergsvik, Fauske and Hart, 2020[89]; Pronzato, Picco and Ottone, 2024[90]; Wood, 2025[91]). Results can differ across countries. For example, Wang (2026[92]) found that both parental leave and childcare had positive effects on fertility rates, and Wang, Gao and Wang (2026[93]) found that kindergarten expansion had a positive effect on fertility intentions in China, while Kleven et al. (2022[94]) found no discernible effect of formal childcare expansion in Austria.

Despite putting in place a comprehensive ECEC system over the past 25 years (see above), the TFR in Korea has fallen from 1.48 children per woman in 2000 to 0.75 in 2024. The development of a comprehensive ECEC policy may have avoided an even steeper decline in the TFR, but it has not (yet) led to the desired rebound of the TFR. This is likely because the recent development of Korean policy took place only while fertility rates were declining, and because there are other major barriers to having children such as the cost of private education (see below) or economic uncertainty (Chapter 5). Nevertheless, there is evidence that childcare support has had a positive effect on fertility. Lee (2022[95]) analysed district-level total fertility rates by income quintile using the National Health Insurance Service (NHIS) database across 228 districts in Korea from 2002 to 2017. The overall effect of ECEC subsidies on fertility was found to be limited, but it was significant among upper-middle income households, particularly in districts with a higher supply of public childcare facilities (Lee, 2022[96]). Local policy interventions were also found to have a positive effect on fertility rates as related to family services (Jeong et al., 2022[97]) or maternity grants (Cho et al., 2023[98]). Given that the recent expansion of Korean family policy has occurred while fertility rates were declining, it is no surprise that econometric studies trying to measure the impact of such policies do not yet find large significant effects, for example Lim (2025[99]) testing for the impact of parental leave and childcare supports. However, when more data become available, these may well illustrate that the growth of family supports has helped to slow down the decline in the fertility rate.

4.3.3. Assisted Reproductive Technology (ART)

The delay of childbearing (Chapters 2 and 3) adds to the risk of infertility. Between 2020 and 2024, total infertility diagnoses rose by 31.4%, with infertility diagnoses increasing by 36.9% among men and 28.5% among women (Nam, 2025[100]). This increase contributes to the growing “demand” for Assisted Reproductive Technology (ART) in Korea.

The total number of births in Korea decreased by 21.1% over the 2019-2024 period, while the number of births using infertility treatments increased by 36.6%, and by 2024, 15.1% of all newborns were born with the use of ART, of which just over a quarter concerned multiple births (Ko et al., 2025[101]).3 This is substantially higher than in Japan where ART accounted for 11.7% of births in 2023 (Katagiri et al., 2025[102]) and approximately 10‑12% of annual births in 2020 in Denmark (Herrmann, 2022[103]). In 2024, 27.3% of ART-related births were multiple births, compared to only 1.8% among natural conceptions.

The Korean Government has implemented a range of ART-related support measures for “infertile couples” – those in legal or de facto marriages for at least one year – and has significantly increased the relevant budget from KRW 41.2 billion (about USD 28.6 million) in 2020 to KRW 145.7 billion (about USD  101 million) in 2024 (Health Insurance Review & Assessment Service, 2023[104]).

ART procedures involve two components of patient costs. First, under the National Health Insurance, the co-payment rate for ART procedures is set at 30% regardless of age, starting November 2024. Second, the government also provides direct subsidies for ART procedures, which are available to all eligible couples regardless of age or income level. While the government sets the baseline – e.g. the number of subsidised cycles was extended from “25 cycles per couple” to “25 cycles per birth” in November 2024, the number of subsidised cycles and the exact amount of support can vary across municipalities. In 2022, the average medical expense per person for ART was KRW 1.8 million (about USD 1 200), suggesting that on average about 70% of treatment costs were covered (Health Insurance Review & Assessment Service, 2023[104]).

Japan started to cover ART by public health insurance in April 2022, with patients generally covering 30% of the cost (Yoshida et al., 2024[105]). In Denmark, the national health insurance system covers most ART treatments, which are nearly free of charge. Unlike in Korea, single and lesbian women also have access to treatment (Herrmann, 2022[103]).

The expansion of governments’ financial support for ART has increased uptake. For example, in Japan the expansion of public insurance coverage for ART in 2022 led to a substantial increase in ART utilisation and subsequent births (Katagiri et al., 2024[106]). Available evidence for the 2015-2019 period on Korea did not point to a direct statistically significant increase in pregnancy rates (Yun et al., 2023[107]), but that period precedes the subsequent extension of policy support. However, there are concerns about differential treatment utilisation across different socio-economic groups: Lee et al. (2023[108]) found that among couples in Seoul, those with higher educational attainment and income levels are significantly more likely to seek ART than their lower-socio-economic counterparts.

4.4. Education fever

Korea is a highly competitive society in many respects, and education is a prime example of this. The focus on education has a long tradition in Korea, with its origins in the “Goryeo” period AD 918‑1392 (Breen, 2017[109]). The system was further developed during the Joseon dynasty (1392‑1910), where on the basis of a competitive examination a few successful candidates were admitted to the leading “yangban” class of civilian and military servants.

Nowadays, entrance to university education often involves an extremely tough College Scholastic Ability Test (CSAT) – “Suneung” – the results of which determine at which level and at what university candidates can pursue their studies. From an early age students spend long hours in a range of private institutes “Hagwon”, with private tutors, parents and on-line at home, to prepare for exams with the aim to gain entrance into prestigious universities and schools – including the so-called SKY universities in Seoul (Seoul National University, Korea University, and Yonsei University).

College entrance procedures can be broadly divided into “early admissions” and “regular admissions”. Early admissions were introduced in 1997, and as the process facilitates selection of excellent students in advance, the proportion of early admissions has increased gradually over the years to 79.9% for the 2026 intake (KCUE, 2024[110]). The process is based on high school grades as a key evaluation indicator, as well as university-specific exams with most universities using a minimum grade system based on the CSAT – early admission is often contingent on an applicant scoring a certain CSAT score as specified in advance. However, Jang (2021[111]) found that education reforms since the mid‑1990s that introduced school differentiation, school choice, and performance‑based evaluation, contributed to increasing competition across the education system.

Preparing for CSAT has always been competitive, but the 1997 financial crisis hit hard (OECD, 2000[112]) and economic and financial instability contributed to an even more intense competition among youngsters for a diminishing number of quality regular jobs (Yoon, 2025[113]). The continued decline in regular jobs and recently changing hiring practices by Chaebol (Chapter 5) only adds further fuel to the competitive fire and the desire to find stable jobs, as exemplified by the competitive fever to enter medical school in the quest for stable, well-paid employment (Kwon, 2023[114]).

4.4.1. Private education costs are substantial

The private education system in Korea plays an important role in enhancing students’ academic performance as it has a strong focus on exam preparations that co-determine future careers. Private education institutes in Korea, the so-called Hagwon, and the main subjects that most hagwons provide are Korean, English and Mathematics – which play a major role in CSAT, but other subjects, such as Korean history, social studies or natural sciences can also be provided.

The “Hagwon market” consists of a wide range of providers, from large‑scale private education companies and franchise academies to small local institutes and individual tutoring services. Employment relationships within the sector are also very heterogeneous, ranging from formal employment contracts in large academies to freelance tutoring, part-time teaching, and informal private lessons. Hagwons try to recruit the best instructors for each subject – “Ilta gangsa” or “first-class star instructor” in Korean, and annual earnings can be up to USD 7 million, or even estimated to exceed USD 15 million with institutes being located in the expensive parts of Seoul such as Gangnam and Daechi-dong among the very top (Mun, 2021[115]; Choi, 2023[116]). The best private institutes are famous for precisely predicting upcoming exam questions based on a huge database on education and past exams accumulated over the years.

Overall, total private education expenditures of elementary, middle and high school students amounted to KRW 29.2 trillion (USD 21 billion) in 2024, around 1.1% of GDP with average monthly private education expenditures per student at KRW 474 000 (USD 347) (Ministry of Data and Statistics, 2025[117]). In all, the share of household spending on education is the largest in Korea among OECD countries, which is more than three times as high as the OECD average (Figure 4.7).

There is also a considerable proportion of students who retake the CSAT – around 35% of exam-candidates in 2024 and 2025. This is substantially higher than for Japan’s Common Test for University Admissions, where only about 13% of candidates were retakers in 2025 (NCUEE, 2025[118]). Repeat students have a longer preparation period than “first-time CSAT takers” and on average their test scores are higher. This practice further fuelled the debate on system equity, as it favours those who can afford to prepare for another year for the exam. Indeed, since the influence of schools and private preparatory tuition is considerable, and co-determined by parents’ financial resources, it widens educational inequalities, acts as a framework for social reproduction where inequality is passed down to the next generation (Bae and Choi, 2024[119]). There is a widening gap in private education spending between the lowest- and highest- income brackets, with the lowest-income bracket spending only one‑third of what the highest income bracket spent (Park and Kim, 2024[120]).

Figure 4.7. Korea has the largest share of education expenditure in final household consumption

Education expenditure as a share of final household consumption, 2024 or latest available year

Notes: For Korea, data refer to the COICOP 2018 classification. Data for Chile, Colombia, Greece, Ireland, Israel, Italy, Japan, Lithuania, New Zealand, Norway, Poland, Türkiye and the United States refer to 2023; for Austria, Belgium, Czechia, Denmark, Estonia, France, Germany, Hungary, Latvia, the Netherlands, Portugal, Slovenia, Spain, Sweden and Switzerland, to 2022; and for Costa Rica, to 2021.

Source: OECD Annual National Accounts Database.

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If anything, educational competition in Korean society seems to become more and more intense. The age at which private education begins is gradually decreasing and participation is expanding significantly among preschool-aged children. According to the first official survey on the subject conducted by the Ministry of Education between July and September 2024, 47.6% of children under the age of six were enrolled in hagwons (Ministry of Education, 2025[121]). Between 2016 and 2024 the private education participation rate increased from 41.2% to 51% for 2‑year‑olds and from 81.5% to 84.2% for 5‑year‑olds (Kim, Eun-young, 2025[122]).

Since 2020, private education expenditure grew to KRW 29 192 billion in 2024 (1.1% of GDP to decline to KRW 27 535 billion in 2025 (KOSIS, 2026[123]) Similarly, after considerable increases since 2020 (Chapter 2, Figure 2.17), average monthly private education expenditure per student also declined from KRW 474 000 in 2024 to KRW 458 000 (about USD 278) in 2025 (KOSIS, 2026[124]).

Education fever continues unabated. As in other OECD countries Korean parents want the best for their children, but their investment in the competitive ability in academic testing – which is not the same as investing in human capital – goes well beyond that in other OECD countries. The desire for a competitive edge has driven many Korean parents to pressure their children to outscore other children and to spend large sums on private education facilities and tutors that help prepare students for the exam. In the past education fever may have contributed to people having more children, so that at least one would succeed in competitive exams and move the household up the social ladder. Nowadays the cost of education leads parents to have fewer children (Fang and Liu, 2026[125]).

Furthermore, the increasing costs of private tuition also raise issues around equity in education and social mobility as the wealthiest parents can afford to spend the largest sums. Private education in Korea, particularly participation in Hagwon, contributes to deepening educational inequalities across different socio‑economic status (SES) (Ha, 2024[126]). Hagwon participation raises CSAT scores but disproportionately benefits students from higher socio‑economic backgrounds, thereby widening achievement gaps (Ku, Lee and Kim, 2022[127]). Similarly, Kim (2023[128]) found that higher-SES students engage in more intensive and longer-term hagwon participation and, accordingly, consistently outperform their lower-SES peers. Inequality is also evident in financial inputs: average hagwon spending has increased over time, and disparities in such spending, measured using inequality indices, have widened, particularly among elementary school students. Notably, these spending gaps intensified during the COVID‑19 period despite an overall decline in participation rates (Park and Kim, 2024[129]).

4.4.2. Effects on fertility trends

Education fever and the associated high costs for parents in cash and time has not missed its effect on fertility trends. The high costs of private education had a significant downward effect on fertility rates and is often referred to as a key reason why many Korean parents have only one child (Jones, 2019[130]; OECD, 2019[28]; OECD, 2024[131]; Tan, Morgan and Zagheni, 2016[132]; Ho and Wang, 2024[133]; Lee. and Song, 2025[134]), and available evidence suggests that high private education costs reduce the intentions and the actual transition to having a second child (Jeong and Choi, 2013[135]; Kim, 2017[136]; Joung et al., 2012[137]). Yoon (2016[138]) showed that education-related unpaid work by parents – often carried out by mothers – affected the intention and occurrence of second-order births.

Also, there are different econometric studies that link the overall downward fertility trends with the increasing private education costs. For example, Yoo (2023[139]) estimated that approximately 26.0% of the decline in the TFR (‑0.46 children per woman) from 2015 to 2022 can be attributed to increased private education spending. Kim (2025[140]) estimated that the increase in private education expenses explained approximately 15.5‑23.3% of the decrease in the total fertility rate (42.9%) from 2007 to 2023. Also, in a study covering 16 metropolitan cities in Korea from 2009 to 2021, Choi, Lee and Park (2024[141]) found that rapid increases in apartment prices and Jeonse rents (see below) and private education costs, particularly for high school students, exerted downward pressure on total fertility rates.

Using the Korean Labor and Income Panel Study (KLIPS), Kim, Tertilt and Yum (2024[142]) found that in the absence of “status externalities”- i.e. the value of the education of their children relative to the education of other children, the fertility rate could increase by 28%.

Sung (2023[143]) found that approximately 26% of the decrease in the fertility rate from 2015 to 2022 was due to the increase in private education costs. Going beyond schooling and also considering for example job-competition while using data from a nationwide youth survey (age 25‑39), Hwang et al. (2023[57]) estimated the effect of competitive pressure on the desired number of children. The average desired number of children among those experiencing severe competitive pressure (0.73 children) was lower than among those experiencing less competitive pressure (0.87), as corroborated by regression analysis. Similarly, Mahler, Tertilt and Yum (2025[144]), found that intense “high stakes” testing may fuel comparisons, which may contribute to declining fertility.

4.4.3. The well-being of students

From an early age students can spend long hours in private institutes “Hagwon”. Tutoring hours are regulated – by local authorities, and thus subject to regional variation – and are generally restricted to 9 and 10 PM for primary school students and 10pm to midnight for secondary school students.

The long time spent in school and in after-school education leaves comparatively little time for 15‑year‑old adolescents to do anything else. As of 2024, 80% of students (rising to 87.7% for elementary students) participate in private education, spending an average of 7.6 hours per week. Time constraints affect a fundamental aspect of well-being – sleep: 18.8% of students sleep less than 5 hours a day, and nearly half (48%) sleep less than 7 hours, with students in high schools averaging only 6 hours and 32 minutes (Shim and Kim, 2025[145]). Korean teenagers are below the OECD average in terms of engaging in sports, physical exercise or gathering work-experience in part-time jobs. The proportion of Korean children who are highly satisfied with life as a whole is well below the OECD average (OECD, 2025[146]). See OECD (2026[147]) for a broad overview of well-being in Korea in a cross-national perspective.

The well-being of Korean children has severely declined as a side effect of the country’s highly competitive education system as well as strict supervisory parenting practices (OECD, 2019[28]). Strong social pressure leads parents to prioritise their children’s academic achievement, but achievement-oriented parenting, characterised by high expectations and strict academic control, has been found to exacerbate academic stress (Heo and Do, 2025[148]). The literature suggests negative associations between tiger parenting and emerging adults’ development in the psychological domains, notably depression and anxiety (Zhang and Wang, 2025[149]), behavioural, social and relational domains, while findings were mixed in the learning/academic and career domains (Cui, Hong and Jiao, 2022[150]).

Education competition is one of the important drivers of emotional risk among children and adolescents in Korea. Students with low academic achievement face a significantly higher emotional risk, such as depression (Chae, 2024[151]; Kim and Kim, 2020[152]).4 As of 2025, more than 4 out of 10 middle and high school students reported experiencing high levels of stress in their daily lives, while about 1 in 4 reported depressive feelings within the past year. In addition, around 1 in 10 students reported having seriously considered suicide during the previous 12 months (Korea Disease Control and Prevention Agency, 2025[153]).

4.4.4. Taking the sharp edges off education fever

It is illusory to think that Korean society will abandon its use of private tuition. For many years, policy has tried to curb Korean private tuition. In fact, private education was banned in 1980, but tutoring simply went underground and it is as yet unclear whether a similar ban in China had the intended effect (Box 4.4). Participation in private education has become the norm in Korea (Bae and Choi, 2024[154]), and it is thus important to reduce parental competitive pressure that contributes to excessive demand for private tuition (e.g. (KDI, 2025[155])). Spending on private education remains considerable. But by now it must be abundantly clear to everyone that current practice charges too high a price to Korean society in terms of child well-being, household budgets, and children forgone. Policymakers, parents, would-be parents, and society more generally can see the negative effects of education fever in Korea, including on the fertility rate (see below) but, thus far, this has not generated widespread change. A multi-faceted approach is needed including different elements.

First off, it is important to reduce the unnecessarily competitive nature of the exam processes. For example, the Suneung exam process involves relative grading (except for English and Korean History), so the score is determined in direct comparison with fellow students. Schools generally engage in criterion-referenced absolute grading, particularly in elementary, middle school and non-core high school subjects such as arts and physical education, but relative grading remains dominant in key academic subjects linked to Suneung. To reduce the competitive nature of the exam processes, including Suneung, it would be better to extend absolute grading across Suneung and core subjects in school-exams.

There is a need to involve all stakeholders in the establishment of a “societal covenant” (or social contract) that while not wholesale in nature – takes the sharp edges off current practice, reduces parental competitive pressure (e.g. (KDI, 2025[155])), and makes it more child- and student-friendly and more sustainable. The “societal covenant” could involve the Ministry of Education, the National Education Commission, teachers’ unions, parent associations, student bodies, and the Korea Association of Private Institutes.5 In fact, the National Education Commission has a “Special Committee on Private Education” of 15 members including education policy experts and researchers (education, law, economics), schoolteachers, parents, and members with mixed experience across public education and private education sectors. Ensuring broad inclusion of stakeholders, such a body could be tasked to develop the content of the societal covenant and help introduce reform more effectively.

Policy can further help by continuing to improve the public education system and vocational training as well as the extension of capacity and quality of after school programmes and other care and education services within schools (see Box 4.3). These initiatives could be combined with a continuous awareness campaign on the negative aspects of current practice, while illustrating the benefits of play, social interaction, and respect for children.

Box 4.3. Public policy measures to reduce demand for private education

To reduce the demand for a range of private education services such as after school hours cramming, exam preparation, sports classes, individual testing and career counselling, the key strand of policy is the quality and capacity of public education services. To this end the Ministry of Education has developed a multifaceted approach (for more details, see (MoE, 2026[156])), which includes the following elements:

• Improving physical and arts education in elementary schools, earlier and repeated testing of student’s learning levels, and expanding OSH-services, with a focus on ensuring that 1st and 2nd graders can leave school at 3PM and attend OSH-services, while also offering OSH vouchers (KRW 500 000 – about USD 375 p/a) to interested 3rd graders.

• Korean students are among the strongest performers in science and mathematics worldwide, but their reading performance has declined over the past decade (OECD, 2026[157]). In the era of AI, reading skills are emphasised, but writing and critical thinking competencies also need to be enhanced to improve overall literacy. The public education system will further develop early identification and individualised diagnosis of learning levels. Policy will also strengthen support for vulnerable groups and those living in areas with declining populations, including through expansion of video tutoring support for middle‑ and high-school students who have difficulty assessing private education. The 2025 Education Broadcasting Survey (EBS) reports a high satisfaction rate and a decline in the use and cost of private education for the families of the students involved (MoE, 2026[156]).

• Provide customised school and career planning through improving individual counselling, e.g. through career guidance teachers. To reduce reliance on expensive private “study cafes”, provide access to public learning spaces in conjunction with regional (education) authorities. The ease of use of EBS on-line learning programmes for middle‑school students will be improved to increase its use and reduce overall costs of private education for families who use it (MoE, 2026[156]).

• Improve transparency of the operations of private institutes, through monitoring and evaluating, including assessments of tuition fees. The provision of private education is regulated by the “Act on the Establishment and Operation of Private Teaching Institutes and Extra-curricular Lessons” as last amended in 2023 (MoE, 2023[158]). The Act includes regulations regarding tuition fees and provides the superintendent of education – an elected official of one of the 17 metropolitan/regional Offices of Education Support – with the power to adjust fees in consultation with a committee of appointed experts and stakeholders of the regional Office concerned.

In addition to all these measures, policy could also consider taxing private tuition, as it is a clear policy signal against its excessive use. This would raise the cost of private tuition per hour, but that could reduce its use and alter (long-term) behaviour (Lucas, 2024[159]). The effect of increasing the price of private tuition will vary across types of tuition, student groups and forms of tuition. Demand for Hagwon tuition is more elastic – i.e. sensitive to price changes – than tuition in small groups (Moon, 2020[160]). Demand for private tuition seems to be least sensitive to price changes – for high school students (Choi and Choi, 2016[161]), but it would already be an important step forward if the use of private tuition among younger students could be curtailed. Also, increasing the cost of private education through taxation has a different impact on different income groups, with low-income households being most sensitive to price changes (Choi and Seong, 2025[162]). The design of any potential tax measure should be carefully considered among experts and policymakers in view of prevailing policy objectives, equity concerns, the age of students as well as existing and planned tax/benefit policies and potential administrative costs.

Policy has to follow a multifaceted approach using a range of different measures to take off the extreme edges of the competitive system, and slowly but surely move away from the current intensity of education fever that often lasts for 20‑25 years, and which has cost so much in terms of well-being, household budgets and unborn children.

Box 4.4. Educational competition in East Asia

Education fever is a feature of life in other East Asian countries too. Perhaps the most gruelling exam is the Gaokao exam in China, which in 2025 involved over 13.5 million students vying for 500 000 places in the country’s top 100 universities (Jia, Li and Cousineau, 2025[163]). Graduates of these top universities earn up to 40% higher wages than those from lower-ranked colleges, with those in state-sector jobs also benefiting from access to urban hukou, subsidised housing and other benefits. Guo and Qu (2022[164]) found that high educational expectations of parents and high returns from education under social inequality are the main motivations for parents to compete. Alas, competition is wasteful to the extent that it hardly increases children’s skills or widens the variance of skills among children. Concerns about private education inequality and misallocation led Chinese policymakers to ban commercial private education in 2021, forcing providers to become non-commercial or cease to exist (Huang et al., 2025[165]). The policy has certainly reduced formal supply, but its impact on demand is unclear and it is not yet known to what extent private tuition activities have gone underground in China. However, there is evidence to suggest that the ban has increased fertility intentions especially in areas where private tuition was more widespread and the policy impact greater (Meng et al., 2026[166]).

Japan has also been described as a country with intense educational competition (OECD, 2024[167]) While university admissions in Japan have become increasingly diversified, the intensity of competition may have somewhat eased. The share of students admitted to colleges or universities, which are primarily through general academic tests, has declined to around 45% (MEXT, 2025[168]), with the remainder entering through recommendation-based or admissions office (AO) routes, which typically assess applicants more holistically based on interviews, essays or extracurricular achievements. Although private supplementary education (juku) is still widespread, its total sales including tuition and teaching materials remain relatively modest at around JPY 600 billion, amounting to about 0.09% of GDP in 2024 (METI, 2024[169]).

Singapore is another country where education competition is important. An important educational landmark is the Primary School Leaving Examination (PSLE) annual national examination that is taken by candidates at the end of their final year of primary school (Singapore Examinations and Assessment Board, 2026[170]). Parents spend considerable time – mothers often take off a month of work prior to the PSLE exam to help children prepare, and money – in 2023, Singaporean households spent SGD 1.8 billion (or about 0.3% of GDP) on private tuition (Ministry of Education Singapore, 2025[171]). This has raised concerns among policymakers, and the educational authorities will be engaging parents, students and educators to see how we can continue to reduce the “arms race in education and attendant anxieties“ (Ministry of Education Singapore, 2026[172]).

4.5. The cost of housing and its effect on fertility

In Korea in 2023, almost 60% of households lived in owner-occupied dwellings and 33% of households rented privately. Most of the remaining households live in public subsidised rental accommodation, as the size of the social housing stock in Korea is on par with the OECD average (OECD, 2026[173]). The rental market is changing, as reliance on the traditional Jeonse system is diminishing. The Jeonse system does not involve monthly rents but requires tenants to pay a lump-sum deposit, typically 50% to 80% of the property’s market value. Landlords can use this deposit as they see fit but have to return it at the end of the lease term. However, with the recent stagnation of house prices, the value of properties is now close to or below the Jeonse deposit. This has contributed to an important increase in the number of landlords who were unable to return their deposits in 2023-2024 (JLL, 2025[174]). Furthermore, with the growth of single‑person households, and as young people are less likely to afford a deposit or obtain a mortgage or Jeonse loan, the demand for monthly rentals outside the Jeonse system has increased.

Over the past 30 years, real house prices peaked in 2021. However, with rising interest rates and stricter mortgage regulations, demand fell and in Q1 2025 the real house price index was about 15% lower than at its peak. OECD (2024[131]) showed that authorities helped stabilise the housing market through stimulating demand through reduced housing-related taxes, relaxed regulations including for zoning and reconstruction, and the introduction of the “Newborn Special Loan,” which facilitates lending well below market rates for households with young children (though seems to predominantly benefit richer households (Kye, Lee and Kim, 2025[175])). Kim (2025[176]) showed that the stabilisation of house prices has had a positive effect on fertility rates.

House price trends can have a positive or negative effect on fertility (Chapter 2 summarised international literature): increased prices have a “wealth effect” among existing homeowners, which could contribute to them having (more) children, as evidenced for Korea by Chung and Oh (2024[177]). At the same time, house price increases can delay or deter homeownership and asset accumulation more generally (Lee, 2026[178]) among young people in view of their liquidity constraints. For example, van Wijk and Feijten (2025[179]) show that increased house prices in the Netherlands over the 2012-2023 period increased fertility rates among homeowners, but exerted an overall downward effect on fertility trends, as the likelihood to be a homeowner among young adults diminished and fertility among renters in (more expensive) housing markets declined.

Regarding Korea, Kang and Song (2021[180]) show that a rise in both housing-sales- and Jeonse prices (the cost of the initial deposit) reduces marriage rates and fertility, particularly in the long term, while Kim (2025[176]) confirms the impact of rising house prices on marriage rates and fertility, but the effect of Jeonse prices was not robust. Size effect estimates differ, but home‑owning newlyweds are more likely than renters to have a child, and the differential is larger regarding the likelihood of having a second child (Shin, 2022[181]; Shin and Jung, 2020[182]).

Over the past 10‑15 years, the linkages between housing and fertility in Korea have changed and differ across the country: fertility rates in metropolitan areas were negatively associated with housing costs, but the relationship has weakened in recent years (Hwang et al., 2023[57]) and does not necessarily hold in non-metropolitan areas (Choi and Shim, 2025[183]). Sung et al. (2024[184]) evidenced the negative association between urban concentration, house price increases and fertility trends.

Many struggle to find affordable homes in the Seoul metropolitan area, and affordability issues have become worse over time (OECD, 2026[185]). Indeed, the median transaction price for apartments in Seoul – a magnet for young people – almost doubled over the 2015-2023 period, whereas elsewhere growth in housing transaction prices was much more limited. An exception is Sejong, which became the public administrative centre of Korea early in the 2010s (OECD, 2025[186]). In all, policy can consider reducing the cost of borrowing for younger couples including by promoting reduced re‑payment rates over the first years of the mortgage, and/or increasing the mortgage credit (Jeon, Lee and Kim, 2021[187]). However, in order to avoid this fuelling house prices in Seoul even further, it may be prudent to introduce such opportunities only to those who buy outside Seoul or in otherwise targeted locations.

Supply-side measures, such as investment to expand the supply of affordable and social housing are an important element of any successful affordable housing strategy (OECD, 2026[188]). Although public rental housing supply in Korea fluctuated over the past decade, it rebounded to about 156 225 units in 2024 (from 82 544 in 2022), accounting for roughly 75% of total new rental supply (Ministry of Land, Infrastructure and Transport, 2025[189]). However, its prevalence is not widespread, and may carry some social stigma for the inhabitants, particularly in cases where low-income households are spatially concentrated (Kim and Park, 2023[190]). Nevertheless, policy should continue to strengthen the development of public housing, including in the Seoul Metropolitan Area (SMA), where prices are highest. Indeed, there is a government roadmap to expand housing supply in the SMA and deliver 1.35 million new housing units by 2030. The strategy involves accelerating and expanding public housing supply, developing underused public sites, and implementing institutional reform to enhance and speed up private sector supply (OECD, 2026[185]).

The cost of housing to parents is an important dimension in affecting fertility rates, but it is not the only housing factor. More generally, housing quality and satisfaction with living conditions also matter for fertility decisions, so effective policy initiatives in this area need to also focus on improving overall living conditions at affordable prices (Jeon, Lee and Kim, 2021[187]; Lee and Jin, 2024[191]; Kim and Ro, 2025[192]). In Asia, the Singaporean public housing model – which is very different from social housing in OECD countries with its core element of home ownership – is a good illustration of how important public housing supply and satisfaction with living conditions can be (Box 4.5).

In terms of direct costs to households in Korea, both the cost of housing and private education exert a downward effect on the fertility trend (Choi, Lee and Park, 2024[141]; Park, 2025[193]). The combined effect of these two factors is strongest in Seoul, with education costs being an important barrier to having a second child (Park, Cho and Kim, 2023[194]) as parents in their 30s and 40s would prioritise educational environment. In all, there are important regional differences between rural and urban areas, which could require more geographically targeted policies (OECD, 2026[185]). Policy for metropolitan areas could prioritise reducing housing costs and private education costs, while policy for regional areas could focus on expanding jobs and improving quality childcare and education opportunities (Lim, Kang and Ma, 2017[195]).

Box 4.5. Public housing in Singapore

In Singapore about 77% of resident households live in public housing (Singapore Department of Statistics, 2025[196]) – commonly known as HDBs after the public organisation which operates the system, the Housing Development Board (Housing & Development Board Singapore, 2026[197]). The system houses about 80‑85% of the population.

The Singaporean public housing system is very different from social rental housing in OECD countries. The government ensures the building of housing units (apartments), which are then bought by the applicant. It generally takes about four years of being on a waiting list, while various factors influence priority (e.g. married couples over singles). The price of the unit depends on different factors, including the location and size, and also on the income of the applicant (the “social” element of the system). The mortgage can be acquired with specific (public) banks at a reduced rate, but commercial bank loans are now also accepted. In all, applicants can have two opportunities to benefit from financial support by the government: when they purchase their first HDB, and when they move to another HDB, for instance because they need more room for children. Households may also make gains on the sale of the first unit. Over the years, just over 90% of HDB-owners indicate that they are satisfied with their flat (for a detailed review, see Housing and Development Board Singapore (2025[198])).

In short, housing availability and affordability as well as housing satisfaction are not so much of an issue for young people and young parents in Singapore as they may be in Korea. House prices do affect fertility trends in Singapore (Saguin, 2021[199]). However, the comprehensive nature of the Singaporean public housing system is likely to have contributed to the TFR in Singapore not falling below 1 child per woman before 2023 – it declined to 0.87 in 2025 (Singapore Department of Statistics, 2026[200]).

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Notes

← 1.  2001 is the first year for which cross-nationally comparable data on the value of Tax Breaks for Families is available for Korea.

← 2.  Child tax credit reform is closely linked to child allowance policy. With the introduction of the child allowance in 2018, the non-refundable CTC for children under 6 was abolished. As the eligible age for the child allowance was raised to under age 7 in 2019 and under age 8 in 2022, the non-refundable CTC applied in 2025 only to children between the ages of 8 and 20 (MOEF, 2025[19]).

← 3.  There is also a high and increasing prevalence of Caesarean sections in Korea: 84.7% of ART-born infants were delivered via C-section in 2024, up from 75.4% in 2019 (Ko et al., 2025[101]).

← 4.  Academic success often shapes a child’s position within the household. Children with higher academic performance are more likely to feel their opinions being respected during family decision making, whereas those with lower achievement may experience less recognition (Shim and Kim, 2025[145]).

← 5.  The Korea Association of Private Institutes is an industry-wide organization that can provide sectoral views on regulatory and legislative issues related to hagwon operations – it primarily represents academy owners (who can also be private teachers), rather than individual tutors.