'Child care inflation' burdens parents as Korea struggles with low birthrate

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'Child care inflation' burdens parents as Korea struggles with low birthrate

Published: 20 Aug. 2025, 14:38 Updated: 27 Aug. 2025, 17:51

Audio report: written by reporters, read by AI

Children's clothing are displayed at a large supermarket in downtown Seoul on June 26. [NEWS1]

Korea is grappling with what some call “child care inflation,” as the cost of raising children is rising even while the birthrate plunges. Instead of prices easing with falling demand, the shrinking market is shifting the financial burden onto parents.

A couple in their late 30s, surnamed Kim, 39, and Lee, 37, with a 4-year-old and an 8-month-old, sighed as they compared their household budget with that of three years ago. The price of a can of infant formula has climbed from 23,400 won ($16.80) to 27,600 won. A pack of diapers rose from 25,100 won to 29,500 won. Even after searching online for discounts, buying four cans of formula and four to five packs of diapers each month has added nearly 40,000 won in costs.

“The two-week postpartum care center I used after my first child cost 3.1 million won, but this time it was 3.7 million won,” Lee said. “On top of that, our older child’s football academy fees recently went up, and it feels like child care costs just keep rising.”

The price of infant formula rose 7.47 percent in July from a year earlier, baby food rose 11.12 percent and diapers climbed 4.33 percent — all well above the overall inflation rate of 2.09 percent, according to Statistics Korea on Monday.

Service costs also went up, with postpartum care center fees rising 4.16 percent and kindergarten tuition 4.08 percent.

“The factory price increased due to rising raw material prices such as cotton and crude oil, and the price of some items rose as discounts ended,” a Statistics Korea official said.

Visitors crowd a baby fair at Coex in Gangnam District, southern Seoul on Aug. 17. [YONHAP]

But raw materials are only part of the picture. With fewer children being born, companies are trying to make up lost revenue by raising per-customer profitability.

The Food and Drug Safety Ministry’s processed food market data showed that formula shipments nearly halved, from 14,603 tons in 2019 to 7,464 tons in 2023.

LG Household & Health Care exited the formula and baby food business in 2022, while Namyang Dairy Products and Lotte Wellfood discontinued some formula products. The supply of children’s diapers also dropped 22.9 percent from 249.5 billion won in 2020 to 192.4 billion won last year.

As supply cuts outpaced demand declines, price pressures grew. The impact is especially clear in areas with wider price ranges, such as postpartum care centers and children’s clothing, where consumers are being asked to shoulder the difference.

A report from Hana Institute of Finance found that while the number of postpartum care centers fell an average of 4 percent annually from 2022 to 2024, the average payment per transaction rose 23.6 percent each year. The number of children’s clothing stores declined 4.1 percent, but spending per transaction rose 5.4 percent.

Parents line up to buy learning materials and picture books for children at a kids fair in Coex, Gangnam District, southern Seoul on July 10. [YONHAP]

“Suppliers are raising per-item profits, while parents with fewer children, are willing to bear higher costs,” said Choi Seul-ki, a professor of demography at the KDI School of Public Policy and Management.

Private education costs are also rising as the school-age population falls. In July, fees for preschoolers’ extracurricular programs increased compared to a year earlier: 4.57 percent for sports academies, 2.45 percent for art academies and 2.41 percent for music academies.

The government currently provides monthly parental benefits of 1 million won for families with children under the age of 1 and 500,000 won for those with 1-year-olds. Yet, the Korea Institute for Health and Social Affairs found last year that average monthly child care costs were 1.44 million won for infants under 1 year old and 1.46 million won for 1-year-olds.

“If child care costs continue to rise, it could entrench feelings of inequality and deprivation depending on household income,” said Hong Sok-chul, a professor of economics at Seoul National University. “Expanding public services such as government-run postpartum care centers and public education would help stabilize prices in the market.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM SEON-MI [[email protected]]