A nurse cares for a newborn in the neonatal unit at Ilsan CHA Hospital of CHA University in Goyang, Gyeonggi Province. /Courtesy of Yonhap News

A study found that the "newborn special loan," introduced by the government to raise the birthrate, is failing to meet its policy goal for low-income households. It said there was no change in the birthrate of the bottom 30% income group after the special loan was implemented. ChosunBiz obtained on the 27th a research report commissioned by the Presidential Committee on Ageing Society and Population Policy that contains this conclusion, titled "Key characteristics and cause analysis of the recent rebound in the birthrate."

The newborn special loan is a housing and low birthrate support program introduced in 2024. It targets not only low-income households but also the middle class and higher-income earners. At launch, the combined annual income requirement for couples was "130 million won or less," but starting in Dec. 2024 it was eased to "200 million won or less."

The Presidential Committee on Ageing Society and Population Policy sees the newborn special loan as having produced a rebound in the birthrate. Korea's total fertility rate had been on a downward trend since 1.30 in 2015 and fell to 0.72 in 2023, but rebounded to 0.75 in 2024. In 2025, the upward trend has continued, with the total fertility rate in the third quarter at 0.81.

Graph of total fertility rate trends by income group. The fertility rate is higher in low-income groups, bottoms out in middle-income groups, and rises again in high-income groups, showing a U-shape. Recently, it is decreasing among low-income groups and increasing among high-income groups. /Courtesy of Presidential Committee on Ageing Society and Population Policy

To examine the policy's impact by income group, the report analyzed changes in birthrates by income tier before and after the special loan's introduction. It said the birthrate rose significantly only among higher-income groups. "The total fertility rate of the top 30% income group increased from 0.84 in 2023 to 0.95 in 2025, but a rebound in the birthrate was not observed in the bottom 30%," it said. The Presidential Committee on Ageing Society and Population Policy has a policy of not disclosing the birthrate figure for the bottom 30%, but it is estimated to have remained in the 0.7 range, the overall average, in both 2023 and 2025.

The report attributed this gap to the "income-tier concentration" of the newborn special loan. The reasoning is that people who can mainly use the program are those with the capacity to repay loans and stable jobs.

The report said, "Recently, the birthrate shows a 'U-shaped' pattern, decreasing from low-income to middle-income groups and then rising again among higher-income groups," and added, "Future policy should develop in a direction that strengthens support for low-income groups and non-regular workers."

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