Since the 1950s, OECD countries, including Korea, have experienced three important demographic trends. The first has been a steady increase in the share of the total population living in urban areas, reflecting both internal migration from rural areas, and inflows of migrants from other countries. This has led to the rural share of national populations declining even in those countries where rural populations grew in absolute numbers. A second trend has been the growing sprawl of urban economies to absorb neighbouring rural regions, as part of their functional urban areas. The third trend is an absolute decline in the number of rural people present in a number of OECD countries, reflecting a combination of falling fertility rates and ongoing outmigration and ageing. Until recently, in most OECD countries fertility rates in rural areas exceeded those in urban areas, allowing the rural population to stabilise or increase, despite the high rates of outmigration. More recently, rural fertility rates have shrunk to the same level as in urban areas, and in many OECD countries this level was below the natural replacement rate.

As in many OECD countries, because of longer life expectancy and low fertility rates, Korea is experiencing population ageing, which is estimated to continue in the long-term. However, demographic change in Korea is so rapid that its population is expected to go from the fourth youngest in the OECD in 2012 to the third oldest by 2050. The elderly dependency ratio is expected to rise from 18% to 120% over the period 2014-2067, the highest growth rate among all OECD countries, with the o population decreasing by 12 million, and the working-age population by 19 million. Population concentration, ageing and decline on such a scale bring significant challenges for Korea, which requires well-designed policy action on several fronts to safeguard the country’s economy and ensure social cohesion.

Over the last 60 years, Korea has experienced rapid growth, but benefits have not been spread across the entire territory. Although Korea has recorded one of the fastest GDP growth rates in the OECD and a significant increase in income per capita, areas and territories far away from large metropolitan areas are shrinking, ageing and in turn lagging behind. The national government has pursued development opportunities and well-being outside large cities in its recent national development plan to address these challenges as well as mitigating overconcentration of people and economic activity in Seoul.

This chapter provides a discussion of the main demographic changes, characteristics and causes in the OECD and in Korea. Comparisons and benchmarking are undertaken across OECD member countries using OECD standard indicators and the OECD Regional Database.

This chapter examines a range of policies that can address socio-economic changes associated to demographic trends in the OECD and Korea and offers an overview of Korea’s responses in terms of policies and strategies to manage demographic pressures in regions and rural places.

This chapter presents relevant policies and practices adopted by selected OECD countries and defines a policy framework with development priorities and measures to tackle socio-economic challenges caused by demographic changes in Korea.