South Korea Confronts Demographic Decline as Aging Workforce, Shrinking Military, and Rising Health Costs Reshape the Nation

South Korea is entering a new demographic reality where population decline and rapid aging are no longer looming threats, but are reshaping the nation. Recent data across sectors reveals the scale and immediacy of the challenge, touching everything from the military to the job market and public health.

The country’s working-age population is shrinking rapidly, with employees under 30 now making up a smaller proportion of the workforce at major firms than those aged 50 and above for the first time. The military also has seen a 20% reduction in troops in just six years, driven by a steep decline in enlistment-age men. In parallel, automation and a shift in corporate hiring toward experienced candidates are limiting opportunities for young graduates, further accelerating the workforce’s aging.

South Korea’s social systems are also feeling the strain. Health care costs for people over 65 have surged nearly 40% in four years, consuming almost half of total insured spending and threatening to push the national health insurance fund into deficit by 2026.

While the country recorded rare increases in births in 2024 and early 2025, buoyed by a jump in marriages, the fertility rate remains at 0.75, far below the 2.1 needed to maintain the population. Projections suggest the population could nearly halve by 2100.

Against this backdrop, experts at the APEC 2025 Korea Public-Private Dialogue argued that reversing the demographic curve is unrealistic. Instead, they called for policies that adapt to the new age structure, which would extend working lives, mobilize underused talent such as women and older workers, and deploy AI and automation to sustain productivity.

For South Korea, the shift from combating population decline to building resilience in an aging society is not optional; it is the only viable path forward.

This article was written for The Sejong Society of Washington, D.C. and published on August 18, 2025, in the Sejong Society’s newsletter, Sejong Digest 2.0. You can subscribe to the newsletter here: https://thesejongsociety.org/