A Comparative Analysis of the US and Korea
KDI/EWC series on Economic Policy
Edited by John Karl Scholz, Hyungypo Moon and Sang-Hyup Lee
Korea has attracted worldwide attention for its rapid economic growth since the 1960s. Although the country’s economic growth is considered relatively healthy by international standards, the Korean economy still faces considerable challenges. One of the key aspects of the challenges includes socioeconomic problems such as the rising numbers of disadvantaged elderly people, employment instability among young people, the high cost of having children and the widening gap between the rich and the poor. The importance of social policy is highlighted most by the recent rapid change in age structure in Korea, which registered the world’s lowest fertility rate. The speed of population aging in Korea is unprecedented, and the proportion of the elderly in Korea’s population will surpass that of the United States and many European countries in less than two decades. The rapid decrease in fertility is believed to be related to the high cost of children, especially the high cost of private tutoring for teenagers in Korea. Since many public social policies target the old and the young, the changes in age structure have profound and fundamental implications for social policy. The elderly are particularly vulnerable in Korea, because the traditional family support system has been deteriorating rapidly. Public pension programs and public health care are obvious and important examples of the pressing needs of the elderly. These problems call for substantial reform in social policies.