Demographic Change and Korea’s Growth Prospects: The Role of AI and Human Capital

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Speaker: Jong-Wha LEE (Distinguished Professor Emeritus, Economics Department, Korea University)

South Korea's economic growth rate has been declining for some time, coinciding with one of the fastest demographic transitions in the world. The country is entering super-aged society status faster than any other nation, with a sharply rising elderly population share, a dramatically falling fertility rate now hovering at around 0.7–0.8, and a rapidly declining working-age population. The fertility rate has fallen dramatically since the 1970s and has continued to decline in recent years, driven largely by a steep rise in the share of never-married individuals. This suggests that the trend is deeply structural in nature and will be difficult to reverse quickly through policy intervention alone. These demographic shifts are already increasing fiscal pressures through higher pension, healthcare, and social spending. These pressures are set to intensify significantly in the decades to come as the elderly share of the population continues to rise steeply relative to other major economies. While Japan experienced population aging earlier, South Korea's pace of aging is even faster and will surpass that of Japan in the near future, making the challenge particularly acute.

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