Daegu City and North Gyeongsang Province (Gyeongsangbuk-do) in South Korea have experienced significant population decline in recent years, with both regions facing the challenges of an aging society, lower birth rates, and economic struggles.
Daegu City’s registered population has decreased by approximately 22,000, while North Gyeongsang Province has seen a reduction of around 26,000. These declines are attributed to a combination of social factors, such as migration and natural factors like lower birth rates and an increase in the number of elderly citizens. In Daegu City, the population of people aged 65 and above has risen to 440,000, indicating that the city is on the brink of becoming a super-aged society.
As of December 31, 2022, the registered population of Daegu City stood at 2.36 million, a decrease of 21,721 compared to the end of 2021. Similarly, North Gyeongsang Province’s registered population dropped to 2.6 million, a decrease of 26,117 compared to the previous year.
The elderly population (aged 65 and above) accounts for 18.43% of Daegu City’s total population. In North Gyeongsang Province, the proportion of elderly people is the second-highest in the country at 23.8%, just after South Jeolla Province’s 25.17%. Both regions are confronting the challenges of an aging population and a diminishing workforce, which could have severe socioeconomic implications if not addressed effectively.
Economic struggles have also been felt by the youth in these regions. More than 90% of the young people in North Gyeongsang Province felt the economic recession even before the COVID-19 outbreak in February 2020. A mobile survey conducted in 2021 by the Gyeongbuk Development Institute (GDI) showed that young people in North Gyeongsang Province expressed their economic difficulties, with 75.9% stating that the perceived inflation was higher than actual inflation.
According to analysis by the GDI, the economic hardship index for North Gyeongsang Province reached 9.6, and Daegu recorded 10.6 in January 2023. These figures have increased compared to the previous month, with Daegu’s index being the second-highest after Gangwon Province (13.9). The rise in the cost of heating and public service fees contributed to the increase in consumer prices.
The Economic Hardship Index, developed by American economist Arthur Okun in 1975, is an indicator that measures the level of economic difficulties experienced by a population. It is based on two primary factors: the unemployment rate and the inflation rate. Unemployment rate represents the percentage of the labor force that is currently unemployed and actively seeking employment. High unemployment rates are generally associated with a weaker economy, job losses, and difficulties in finding work. Inflation rate is the rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is eroding. Central banks attempt to control inflation through monetary policy. High inflation rates can lead to a decline in the purchasing power of money, making it more challenging for people to maintain their standard of living.By combining the unemployment rate and the inflation rate, the Economic Hardship Index captures the overall economic burden experienced by a population. A higher index value indicates increased economic difficulties, while a lower value suggests a more favorable economic environment.
The index is useful for policymakers, economists, and other stakeholders to assess the impact of economic policies and identify areas that require intervention. By tracking the Economic Hardship Index, decision-makers can better understand the challenges faced by the population and work towards implementing policies that alleviate economic difficulties and improve overall well-being.
The index aims to provide a comprehensive understanding of the economic challenges people face by combining these two key economic indicators. The youth economic hardship index, calculated quarterly based on the unemployment rate and living cost increase rate for those aged 20-39, also showed higher levels in Daegu (10.5) and North Gyeongsang Province (9.8) compared to other regions in the country.
The Consumer Confidence Index (CCI) is a comprehensive measure of consumer sentiment calculated using six major indices from the Consumer Survey Index (CSI). The long-term average value (from January 2003 to December 2022) is set to 100, with values greater than 100 indicating optimism and values below 100 indicating pessimism.
The South Korean government must implement policies and initiatives to support the aging population, including better healthcare services, adequate pensions, and the promotion of active aging. Additionally, efforts to boost the birth rate and attract young families to these regions will be essential in ensuring long-term stability and growth.
The population decline, rapid aging, and economic challenges in Daegu City and North Gyeongsang Province pose significant obstacles for the regions’ development and sustainability. It is crucial for both local and national governments to work together to create comprehensive strategies that address these issues. By providing support for the elderly and promoting a favorable environment for young families, the government can help foster a more balanced demographic composition.
Enhancing job opportunities and improving the overall economic climate in these regions will also be vital to retaining young talent and attracting new residents. Investing in education, technology, and infrastructure can boost the regional economies and provide an incentive for young people to remain in their hometowns. Additionally, revitalizing the local communities through cultural, social, and environmental initiatives can help improve the quality of life for all residents, making Daegu City and North Gyeongsang Province more attractive places to live and work.
Ultimately, overcoming the challenges of population decline, rapid aging, and economic struggles will require a multifaceted approach, with collaboration between various stakeholders and a long-term vision for the future. By addressing these issues, Daegu City and North Gyeongsang Province can work toward a more prosperous and sustainable future, benefiting the citizens of both regions for generations to come.