Issue Mounting fiscal burden of welfare and pensions

Summary

Korea is experiencing the world's fastest combination of low fertility and ageing, which the survey sees as a contraction and restructuring of the economy, labour force, welfare finances and local communities rather than simple population decline. With fertility at a world-low 0.72 and super-aged status from 2025, the working-age population is shrinking, and labour shortages, slower growth and weaker consumption are spreading into regional decline, care gaps and generational disconnection. A surge in older people is driving explosive demand for medical, care and welfare services, undermining the financial stability of the National Pension and National Health Insurance, while welfare spending already exceeds 35 percent of the government budget. Contribution income falls as the workforce shrinks while benefit payments rise quickly, older patients account for a large share of health insurance spending and long-term care insurance faces pressure from dementia and chronic disease. As family care weakens, demand grows for integrated medical, care and welfare services, community care, home health visits and more long-term care facilities.