Evaluation of Support Programs for Population-Declining Areas

Published on Nov. 14, 2024
Published by Social Administrative Program Evaluation Division, Budget Analysis Department

   Korea is confronting a range of social and economic challenges due to the rapid population decline. As of 2020, the number of deaths surpassed the number of births, leading to a natural population decline, a trend that is projected to continue in the coming years.
   In particular, non-metropolitan areas are facing a significant social population decline due to the migration of young people to metropolitan areas in search of education, employment, and other opportunities. As young people move to urban centers, the local labor force shrinks, consumption decreases, and the economy and social structure of these regions are further weakened. To address these issues, the government has designated 89 "population decline areas" since 2021 and is implementing a range of policies and programs, including the establishment of a Local Extinction Response Fund, which allocates 1 trillion won annually.
   This report examines the primary causes of population decline and evaluates the appropriateness of designating population decline areas, along with the issues of government support programs. According to the analysis, the main drivers of population decline in these areas are changes in population structure, specifically the "low fertility rate and aging of the baby boomer generation." This issue is particularly acute in rural regions. Additionally, the migration of young people to metropolitan areas is further accelerating the outflow of population, highlighting the need for comprehensive measures to address this trend. The report also finds that the criteria used to designate population decline areas need to be revised. Specifically, the reliance on the fiscal independence rate, without accounting for government transfer resources, should be reconsidered as the sole basis for assessing the financial conditions of these areas. Furthermore, some government support programs are being implemented without adequately considering the specific needs of population decline areas, leading to insufficient prioritization of support for regions that require it most.
   To address the issue of population decline in designated areas, it is essential to clarify the criteria for selecting these regions, ensure the implementation of tailored support programs, and improve policies that promote balanced development across different areas. Specifically, there is a need for differentiated policy responses that take into account the unique characteristics of each population decline area.