South Korea's in-kind welfare shifts: medical up, education/childcare down amid demographic changes

The South Korean government's provision of in-kind welfare benefits is shifting, with medical services expanding while education and childcare shrink. The National Data Office attributes this trend to the nation's declining birth rate and aging population.

In-kind welfare, encompassing non-cash benefits like free school meals, childcare, and medical support, averaged 9.26 million won per household in 2024, a 0.4% increase from the previous year. This represents 12.5% of the average household income, effectively meaning the government covers this portion of expenses.

The medical sector's share grew by 1.6 percentage points to 52.8% (4.88 million won) of the total in-kind benefits. Conversely, education's share decreased by 1.6 percentage points to 40.7% (3.77 million won), and childcare fell by 0.3 percentage points to 3.5% (320,000 won).

"As the population ages, the proportion of medical expenses, such as nursing care for the elderly, continues to rise," explained Ryu Chang-jin, head of the Welfare Statistics Division at the Data Office. "Meanwhile, due to the low birth rate, the number of infants and school-aged children is decreasing, leading to a decline in the education and childcare sectors."

For low-income households (the bottom 20%), in-kind welfare accounted for nearly half of their annual income, reaching 7.27 million won. Medical benefits constituted a significant 88.0% of this for the lowest income bracket. In contrast, the highest income group (top 20%) received the largest absolute amount of in-kind benefits at 12.53 million won, with education services making up a larger portion (57.0%) of their benefits.

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As the population ages, the proportion of medical expenses, such as nursing care for the elderly, continues to rise. Meanwhile, due to the low birth rate, the number of infants and school-aged children is decreasing, leading to a decline in the education and childcare sectors.