The Shadow of Low Birth Rate in North Korea and Its Implications for the Economy
The correlation between a declining population and a country’s economy is that low birth rates negatively affect labor supply and aggregate demand over time. For this reason, North Korea’s population problem and its potential implications for the economy merit closer study.
There are conflicting assessments about North Korea’s population trends. According to UN estimates, North Korea’s population has been in slow decline, suggesting, therefore, that the problem is not as serious as some have feared. However, this author’s own research indicates that the North’s birth rate has fallen much more rapidly than what UN data have shown. Furthermore, various datasets confirm that the continued low birth rate in North Korea has started to take a toll on the country’s labor supply and market activities.
Making matters worse, the low birth rate in North Korea is accelerating the aging of the population. If these two trends continue, the country is highly likely to witness a vicious cycle of a further decline in economic vitality that in turn results in an even greater population problem. To understand the broader trends of the North Korean economy, it is necessary to closely monitor the future trends of the country’s demographics and the Kim government’s response to the population issue.
The Problem
According to the United Nation Population Fund (UNFPA), the sole statistical agency on North Korea’s birth rate, the country’s declining population does not appear to be a serious issue. The UN’s “World Population Prospects 2024” estimates that the country’s birth rate has slowly declined from 2.17 in the 1990s and 1.92 in the 2000s, to 1.86 in the 2010s. In addition, this same dataset shows that the total number of births per year in North Korea already surpassed those of South Korea in 2018. These UN statistics have led several South Korean researchers to publish studies noting that South Korea could enjoy a population bonus in case of Korean unification.[1]
However, several scholars, including Eberstadt , question the reliability of the UN’s North Korean population statistics.[2] Furthermore, Lee and Kim measured North Korea’s total fertility rate based on interviews with North Korean defectors, which tended to contradict the UN statistics.[3] According to our study, North Korea’s total fertility rate fell much faster than the UN estimates, from 1.91 in the 1990s to 1.59 in the 2000s, and 1.38 in the 2010s. Meanwhile, South Korea’s total fertility rate stood at 1.15 in the 2010s. If it is true that both Koreas’ birth rates are low, the possibility of North Korea’s total number of births per year exceeding that of South Korea’s will converge to zero. This means the population bonus for South Korea would not be that great even if North and South were to unify.
Low birth rates affect labor supply and aggregate demand over time. Various datasets confirm that the continued low birth rate in North Korea has started to have a negative impact on labor supply and market activities, such as forcing women to go back to work and diminishing the vitality of the market.
The population trend estimates based on North Korea’s total fertility rate as measured by Lee and Kim are the main source of data for this paper. This paper also draws on North Korean defector testimonials, North Korean laws and regulations, and reports from North Korean-run media outlets.
The 2010s: Low Birth Rates Help to Raise Living Standards
It is assumed that the decline in North Korean married couples’ total fertility rate is mainly due to the Arduous March in the 1990s and the ensuing major changes in the country’s economic structure. Among those born in the 1970s who reached the marriageable age during the Arduous March, those engaged as retailers in the jangmadang markets increased significantly in number. In addition to the poor childbirth conditions of these markets, retailers risked losing customers to competitors when they returned after childbirth due to intensifying competition in the markets. This resulted in a further decline in the fertility rate.
In the 2010s, low birth rates mainly had a positive effect on living standards. Living conditions began to improve as the average number of children per household decreased to one or two. In contrast to the stagnation of GDP in the 2010s, the indicators of living standards for households showed a marked improvement during this decade.
In particular, according to North Korean Social Change 2012-2020, published by the Institute for Peace and Unification Studies (IPUS) at Seoul National University, access to better food increased significantly during those years. That study said the number of households with rice as their staple food increased from 48 percent in 2011-2014 to 79 percent in 2018-2020, and the number of households that consumed meat at least once a week went up from 34 percent in 2011-2014 to 58 percent in 2018-2020.
Clothing consumption also improved significantly in the 2010s, according to this author’s interviews with North Korean defectors in 2024. Defectors who had experience working in clothing retail in North Korean markets testified that overall sales decreased only slightly despite a drop in sales volume, as high-end products sold well. They also said children preferred branded clothes and parents with only one child were generally willing to buy such clothing for their children. A North Korean defector who lived in South Pyongan Province and defected in 2019, for example, testified that adolescents mainly wore Adidas gym clothes, which they called “leaf-shaped gym clothes.” In addition, a significant number of adolescents joining the Socialist Patriotic Youth League since the 2010s purchased expensive red ties as part of their required uniform.
In terms of housing conditions, the residential area per person appears to have increased, particularly for adults. Housing construction in North Korea had been sluggish since the Arduous March, and the average space of residential housing remained the same. However, the space per adult seems to have increased significantly due to a decline in the number of children per household. According to this author’s estimates, the living space of adults aged 20 and older increased by nearly 10 percent in 2017 compared to 2007.[4]
The Mid-2010s: Early Signs of Negative Impact—Decrease in Military Service Manpower
Low birth rates began to have a negative impact only in the latter half of the 2010s. North Korea’s military service recruitment department appears to have been the first to be affected, when those born in the 1990s reached the age of military service. As noted above, North Korea’s birth rate fell during the Arduous March in the 1990s. As a result, the pool of those eligible for military service—generally 17- to 26-year-olds—had shrunk significantly by the mid-2010s. In North Korea, people enlist in the military, continue on to college, or get a job starting at the age of 17, after graduating from high school.
In response to the manpower shortages in the military, the North Korean authorities in the late 2010s reportedly lowered the eligibility criteria for military service, including height, and changed the military recruitment system from a volunteer system to a de facto conscription system. Reflecting this, Article 12 of the Youth Education Guarantee Act enacted in 2021 stipulates that “youths must actively volunteer for the People’s Army.” Article 41 of the same law also prescribes that early marriage or unfair physical examinations for the purpose of avoiding military service are prohibited. The author surveyed North Korean defectors about their relatives and acquaintances and found that approximately 5 percent of women born in the 1970s served in the military. However, more than 10 percent of women born in the 1990s are estimated to have served in the military. The number of women joining the military is reportedly increasing over time.
The 2020s: Low Birth Rate Starts Having a Visible Impact
Neither North Korea’s total population nor its working-age population declined throughout the 2010s. There was, however, a change only in the population structure by age group: the youth segment decreased. It appears, therefore, that neither the negative impact of the low birth rate nor the North Korean authorities’ positive measures to combat this problem manifested themselves. However, it is estimated that the North’s total population and the working-age population have begun to decline in earnest since 2020. In particular, according to Lee and Kim , North Korea’s working-age population is estimated to have been in decline by nearly 1 percent annually since 2020.
Labor Shortages in Production Sites
The negative ramifications of the low birth rate most clearly showed in the form of labor shortages in production sites such as farms and mines. In response, the North Korean authorities began to force young adults to apply for jobs in agriculture and mining, which are labor-intensive industries. For example, according to a 2021 report by the North Korea-specialty website Daily NK, thousands of young adults across the country were forced to “volunteer” to work in cooperative farms and mines.
In addition to mobilizing large numbers of youth to farms, mines, and other labor-intensive industries, the North has attempted to address labor shortages by stepping up married women’s labor participation. North Korean Party instructions and ministries’ regulations on labor stipulate that women are exempt from labor obligations after marriage. However, since the emphasis of women’s labor at the Fifth National Conference of Mothers in December 2023, married women have begun to volunteer to work at production sites. The North Korean Party daily Rodong Sinmun in November 2024 reported that more than 79,000 women had entered the workforce since the beginning of the year. In the past, married women were mobilized only to construction sites, but now they are mobilized to production sites such as factories and mines as well. The widened scope of mobilization may be related to the first appointment of a woman as the director of the Workers’ Organizations Department of the Workers Party of Korea in July 2024.
Stagnation in Jangmadang Markets
North Korea’s increased crackdown on jangmadang and foreign currency shortages are often attributed to the decline in market activity, but these are short-term factors. According to this author’s interviews with defectors, the long-term cause is population decline.
Aggregate demand across the North Korean economy appears to have fallen since the 2020s due to a decline in the total population, leading to stagnation in markets. A North Korean economic research firm, NKID, estimated that North Korea’s market sales in 2024 had not bounced back to pre-COVID levels.[5] According to this author’s interviews with North Korean defectors, some merchants are said to be finding other jobs such as herb picking or gold digging in addition to their normal sales activities in markets.
In particular, North Korean markets are losing their vitality as the number of people in their 20s and 30s is shrinking. This age group’s role in markets is quite important for two reasons. First, wholesalers and retailers in their 20s and 30s have physical stamina, which means they can actively interact with producers in distant areas to develop new items and also supply products to remote areas. Second, people in their 20s and 30s tend to be innovative, and thus they can provide creative services. For example, in the case of electronic product sales, repair services are often provided; in the case of heavy products, delivery services are often offered once products have been sold. A decline in the number of people in their 20s and 30s, who play a pivotal role in keeping up the diversity and creativity of products in the markets, appears to be a key factor causing the markets to stagnate.
Conclusion
The negative impact of the rapidly declining birth rate in North Korea since the Arduous March is already visible in labor supply and markets. Accordingly, the North Korean authorities took issue with the declining birth rate at the Fifth National Conference of Mothers in December 2023 and have since introduced various policies to address this issue. The Childcare Act, enacted in February 2022, obliges the state to provide free dairy products to children.[6] The Housing Act, revised in January 2023, requires municipal and county administrative committees to give priority to housing for families with multiple children.[7] According to a North Korean defector who lived in Pyongyang and defected in 2019, the authorities had already rolled out a policy in the late 2010s that required people to have at least two children to become administrative officials.
In addition, the low birth rate in North Korea, which has continued for a long time, is now accelerating the aging of the population. According to this author’s estimate, North Korea is expected to enter into an aging society, with more than 14 percent of its population being 65 or older by 2025. If these trends continue, North Korea will likely face a vicious cycle in which the low birth rate and an aging population will cause a further decline in economic vitality, which in turn, will further aggravate the low birth rate and aging population problems. Monitoring these demographic trends and North Korea’s responses will be critical to understanding the country’s economic potential.
- [1]
Jiyoung Choi, “Demographic Structural Change in North Korea and Its Implications,” BOK [Bank of Korea] Working Paper 2015-18 (in Korean), pp. 16-17; and Jea Hwan Hong et al., Demographic Change in North Korea: Trends, Determinants, and Prospects (Seoul: Korea Institute for National Unification, 2020), pp. 211-241.
- [2]
Nicholas Eberstadt, The North Korean Economy: Between Crisis and Catastrophe (New Brunswick, NJ: Routledge, 2007), pp. 17-59.
- [3]
Jooyung Lee and Sunjung Kim, “North Korea’s Declining Fertility Rate Seen Through a Survey of North Korean Defectors and Its Implications for Inter-Korean Population Integration,” BOK Working Paper 2023-29 (in Korean), pp. 7-12.
- [4]
Jooyung Lee, “Estimation of Long-term Housing Demand and Related Housing Construction Investment in North Korea,” BOK Working Paper 2018-32 (in Korean), pp. 13-15.
- [5]
The NKID conducted a survey in January 2025 per this author’s request.
- [6]
National Intelligence Service, 2024 North Korean Statutes Vol.2, (in Korean), pp.1022-1031. https://www.nis.go.kr/AF/1_2_1.do.