Elderly men sit on benches at Tapgol Park in the Jongro-gu area of Seoul, South Korea, on Wednesday, Oct. 23, 2013. President Park Geun Hye in her 2014 budget released last month scaled back aid she pledged to pensioners and delayed plans to eliminate the deficit as the government forecast the first drop in revenue in four years. Photographer: Woohae Cho/Bloomberg

South Korea is a lot like Japan in many ways despite the rivalry the two nations have. For one, they are both economically developed nations that have high levels of technology and wealth. But this also means that they tend to share some of the same problems. One such issue is a common problem being faced by developed nations all over the world; the issue of declining birth rates and a shrinking workforce.

Just like Japan, South Korea’s birth rates have been showing a downward trend over the past few years. This combined with an ageing population has led the very real issue of a shrinking workforce. Rural communities are slowly disappearing as much of the population has moved to the bustling metropolitan areas.

Saddled with the prospect of a shrinking workforce, the outlook for South Korea’s economy is dismal: Gross domestic product growth will struggle to hit 2 per cent this year. This is made worse as of late as the nation is now caught between two trade wars. As a heavily export reliant country, South Korea desperately needs fresh drivers to stimulate the economy. Replenishing its population by introducing programmes that encourage child-rearing and loosen immigration restrictions would be a start.

According to the Population Policy Research Centre at Seoul National University, South Korea has around 51 million people and is still growing slowly. However, estimates have pegged the population to shrink to 44 million by 2050. From there, the population is expected to shrink by 60,000 per year onwards.

The fertility rate sank to below one child per family last year, the lowest among countries in the Organisation for Economic Cooperation and Development (OECD). In contrast, even Japan’s fertility prospects are far more optimistic, with a relatively hale 1.43 children per family.

The government have been taking steps to encourage family time in an effort to stimulate population growth. This is the total opposite of the 1960’s–1990’s policies of curbing growth to fight poverty. Now, the government is looking at ways to cut down working hours in a week to encourage family rearing. Last year, President Moon Jae-in reduced the maximum working week from 68 hours to 52, though not all firms are covered by these restrictions.

It is also worth noting that the cost of living in urban areas of the country are astronomically high; presenting another barrier to forming large families. Back in Seoul, officials appear more focused on addressing a cyclical slowdown than the broader shift in economic and social life. The Bank of Korea is on its way toward setting zero interest rates and fiscal taps are being opened to buttress slowing activity. Unfortunately, this is no guarantee that it will help to stimulate population growth.

Easing immigration standards might be a potential solution to the issues that South Korea faces. While the foreign population in the country is still relatively small at 3.7 per cent, reports by the OECD have shown that this number is fast growing. Foreign workers could help fill the gap vacated by retiring workers; especially in areas such as manufacturing, construction, and retail. The real risk that stems from this is that foreign workers may risk getting hemmed into low-paying jobs. While the country has attracted many foreign students, only a small portion remain due to the highly competitive market and a lack of prestige from non-corporate jobs.

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