Issue Korean vulnerability: Demographic compression

Summary

KDI lists demographic change as Korea's first structural vulnerability. Ageing is a global phenomenon, but Korea differs in speed and scale: it took France 115 years and Japan 36 years to move from an aged to a super-aged society, while Korea took seven. A fertility rate of 0.75 in 2024 is half the OECD average and 36% of the replacement level, allowing almost no time for institutional adjustment. The shock goes beyond a shrinking labour force, bringing automatic growth in pension, health and long-term care spending, faster concentration in the capital region, decline of other regions and a care workforce crisis. All of these compete for the same resources needed for structural upgrading.