South Korea: the stock market boom is boosting fertility after years of historic decline

In South Korea, the fertility rate has now reached almost 1 child per woman, whereas a year ago it stood at 0.72. That was the world’s lowest recorded figure – the number that analysts across the globe cited as the inevitable fate of technologically advanced economies. But now things have changed. South Korea is experiencing the fastest turnaround of any developed country. We now know that the number of births has been rising steadily for around eighteen consecutive months and that the rate of increase is accelerating, particularly in recent months. What has happened?

The reason everyone cites is the Korean stock market index, which has tripled in less than eighteen months – with Samsung up 196 per cent – and in twelve months, with SK Hynix up 329 per cent. The KOSPI has exceeded $4.54 trillion in market capitalisation (by way of comparison, in Italia we are below one trillion with a slightly smaller population). Furthermore, bonuses amounting to hundreds of thousands of dollars are now being paid out to employees at Samsung and SK Hynix.

A report by KB Securities from May 2026 explicitly establishes the link: in Korea, historically, when the stock market rises sharply, births follow with a delay of nine to twelve months. Stock market gains become the ‘start-up capital’ for marriage and children, offsetting the astronomical costs of housing – whether buying or renting – in Seoul, a megacity of eight million. Statistics Korea, in its March 2026 report, showed that the rise in births is concentrated among women aged thirty and over – the ‘echo boomer’ generation who had postponed motherhood in the previous decade and are now making up for lost time. In Korea, where an average flat in the Gangnam district costs the equivalent of thirty years’ average salary, some Samsung and SK Hynix employees have seen the value of their share options double, and almost one in three adults holds shares directly. In eighteen months, South Korea has achieved through financial means what we in Italia have been unable to achieve through wages for the past twenty-five years: young South Koreans of childbearing age have found themselves with enough money to think about a home, marriage and children.

To understand the power of the wealth effect, one must look at a figure that is usually cited to argue the opposite: Korean households’ private debt as a proportion of GDP is the highest in the developed world, after Canada and Australia. The Bank of Korea reported this figure at 91.7 per cent in the fourth quarter of 2024 (data from the Institute of International Finance), having peaked at a historic high of 101.9 per cent in 2021. By the end of 2025, it had fallen back to around 89–90 per cent, but remains well above the global average of 60 per cent, and far above the average for advanced economies (68.9 per cent according to the BIS). Almost all of this debt is mortgage debt: the Korean system, based on jeonse (a huge security deposit required of tenants, amounting to 50–80 per cent of the property’s value, refundable at the end of the contract) and on aggressive mortgages in the Seoul area, has inflated the ratio of household debt to disposable income to 186.5% in 2023: on average, every Korean household owes almost double its annual income. It is a burden which, under normal circumstances – such as during the years 2016–2021, when the birth rate fell below 1.0 – stifles any plans for a family. Young Koreans could afford neither a home, nor a jeonse deposit, nor a mortgage, and so they put off marriage and having children indefinitely.

The mortgage debt has not been written off. But the value of households’ financial assets has risen by a staggering amount: a rise in market capitalisation from 2.2 to 4.5 trillion dollars means, in a country of 52 million people, an additional average of over 40,000 dollars in financial wealth per adult over eighteen months. For employees of Samsung or SK Hynix, the multiplier has been even higher. Suddenly, the ratio of mortgage debt to total household wealth has been reversed: the very mortgage that was once a sentence to perpetual singlehood has become sustainable. Almost one in three Korean adults holds shares directly, and the KOSPI has widespread effects on the entire urban population. In eighteen months, South Korea has achieved through financial means what we in Italia have been unable to achieve through wages for the past twenty-five years: young South Koreans of childbearing age have found themselves with sufficient wealth to offset the burden of housing costs, and have begun to think about marriage and children.