Korean Child Incentives Not Working

Economics teaches that people respond to incentives. So if you want people to have more kids, just give them suitable incentives, and you will get more kids.

Except that S. Korea and other countries have tried this, and it has failed.

Reuters:

As South Korea scrambles to halt the sharp decline in its birth rate, policymakers are having a hard time convincing many in their 20s and 30s that parenthood is a better investment than stylish clothes or fancy restaurants.

Asia's fourth-largest economy plans to launch a new government ministry dedicated to demographic challenges after years of incentives failed to ease the baby crisis.

But for Park Yeon, a 28-year-old fashion Instagrammer and aspiring singer, spending choices are guided mostly by her appetites for clothing and travel, leaving little budget for marriage and babies.

"I'm all about YOLO (you only live once)," said Park as she sells her Supreme T-shirts at a thrift fashion festival in Seoul's high-fashion enclave of Seongsu-dong.

"There isn't enough left to save each month after I do things to reward myself. Getting married might happen at some point but being happy right now - that's more important, right?"

South Korea continues to break its own record for having the world's lowest birth rate, which hit a fresh low last year.

Sociologists say the lifestyle priorities of Koreans in their 20s and 30s - considered Generations Y and Z - mean they spend more and save less on average than the wider population or their peers in other countries, neither of which are conducive to nest building.

"They are status hunting. Their high spending habits show young people are working on their own emblems of success online rather than focusing on the impossible goals of settling down and have children," said Jung Jae-hoon, a sociology professor at Seoul Women's University.

So give the Korean girls more money, and they just acquire luxuries that futher remove them from childbearing.

To be sure, financial hardship is by far the biggest reason South Koreans cited for not having children, according to a survey by research firm PMI Co. in May.

About 46% of 1,800 respondents blamed either job uncertainty or education costs for this decision.

Maybe they are not telling us their real reasons.